Collection is an instruction from the seller (exporter) to the bank to deliver the documents to the buyer (importer) against payment and/or acceptance of payment. The bank does not assume any payment obligation, but acts as an agent/transmitter of documents.
The Bank acts as a reliable transmitter of documents
Collection ensures the security of the transaction: the seller receives payment against the documents, while the buyer receives the documents only after making the payment or accepting the bill.
Simpler and more affordable than other payment instruments
By the nature of the commercial transaction, the following types are distinguished.
Export Collection
You ship the goods to the buyer and submit the shipping documents to the Bank with appropriate instructions to collect payment from the buyer for the goods. The shipping documents may be delivered to the buyer either against full payment or against acceptance of a document (bill) containing the buyer’s written deferred payment obligation.
Import Collection
The exporter ships the goods to you and instructs its bank to send the shipping documents to Acba bank with appropriate instructions to collect the payment. The shipping documents may be delivered to you either against full payment or against your acceptance of a document (bill) containing a written deferred payment obligation. Under pre-agreed terms, the Bank may guarantee payment of the bill accepted by you through an aval.
Forms of Payment under Collection:
documents against payment (D/P) - under the collection, the Bank delivers the documents received from the Issuing Bank to the debtor against payment. Under this form of collection, the seller’s bank authorizes the buyer’s bank to provide the documents evidencing ownership of the goods only after the buyer has made payment for the goods,
documents against acceptance (D/A) - under the collection, the Bank delivers the documents received from the Issuing Bank to the debtor against the latter’s acceptance of the bill. This form of collection is used when the buyer and seller have agreed on deferred payment terms. The buyer receives the documents evidencing ownership of the goods against a written obligation, subject to making payment for the goods at a later date.
The collection service is provided at the Bank’s Head Office.
The fee for services provided by the Bank and intermediary bank(s) in connection with collection settlements is charged to the party specified in the instructions of the collection order.
The performing bank has the right to withhold from the collected amount the fees due for collection settlements and the reimbursable expenses.
The Bank has the right, in the event of fluctuations in the interest rates on funds raised and placed by the Bank in the financial market and/or changes in the financing rate and/or the existence of such prerequisites, to unilaterally change the interest rates and fees stipulated by the Agreement by notifying the Customer and/or Debtor at least 30 calendar days in advance. The changes will apply from the date specified in the notice.
In the event of termination of the services, fees already paid are not subject to recalculation or refund.
The procedure for conducting collection settlements is governed by law, banking rules established in accordance with the law, and business practices applied in banking activities.
If the Customer’s instruction is not fulfilled or is improperly fulfilled, the Issuing Bank is liable to the Customer on the grounds and to the extent established by the general rules on liability for breach of obligations under the Civil Code of the Republic of Armenia.
If the non-fulfillment or improper fulfillment of the Customer’s instruction is a result of the performing bank’s violation of the rules for carrying out settlement transactions, liability toward the Customer may be imposed on that bank.
Depending on various circumstances, the Bank may require additional documents and information. For the purpose of proper customer due diligence as defined by the RA Law “On Combating Money Laundering and Terrorist Financing,” the Bank may, based on the “Know Your Customer” principle, require the Customer to provide additional documents or other information, as well as ask additional questions during verbal communication. If proper identification of the Customer is impossible or account servicing is impossible, access to the service provided by the Bank may be restricted. In addition, in accordance with the agreement signed with the United States under the Foreign Account Tax Compliance Act (FATCA), the Bank may collect additional information to determine whether you are a U.S. taxpayer.
During the term of the Agreement, the loan account statement and other information required to be provided under the legislation of the Republic of Armenia are provided free of charge. A statement not required to be provided under the legislation of the Republic of Armenia and a duplicate statement are provided as follows:
for a period of up to 6 months (inclusive) - free of charge,
for a period of more than 6 months and up to 12 months (inclusive) - AMD 2,000 (including VAT),
for a period exceeding 1 year - AMD 3,000 (including VAT),
Information on the loan may be provided in the form of a statement as required:
within the business day following submission of the application - AMD 5,000; when applying through the acba digital system - AMD 3,000 (including VAT),
on the same business day, within 1 hour - AMD 7,000; when applying through the acba digital system - AMD 5,000 (including VAT),
within one to four business days - through the delivery service - AMD 6,000; when applying through the acba digital system - AMD 4,000 (including VAT).
Depending on various circumstances, the Bank may require additional documents and information. For the purpose of proper customer due diligence as defined by the RA Law “On Combating Money Laundering and Terrorist Financing,” the Bank may, based on the “Know Your Customer” principle, require the Customer to provide additional documents or other information, as well as ask additional questions during verbal communication. If proper identification of the Customer is impossible or account servicing is impossible, access to the service provided by the Bank may be restricted. In addition, in accordance with the agreement signed with the United States under the Foreign Account Tax Compliance Act (FATCA), the Bank may collect additional information to determine whether you are a U.S. taxpayer.
Civil Code of the Republic of Armenia, Article 943.
1. If any document is missing or the external characteristics of the documents do not correspond to the collection instruction, the performing bank is obliged to immediately notify the person from whom the collection instruction was received. If the specified deficiencies are not remedied, the bank has the right to return the documents without processing them.
2. The documents are presented to the payer in the form in which they were received, except for the bank’s notes and endorsements necessary for processing the collection transactions.
3. If the documents are payable upon presentation, the performing bank must pay them immediately after receiving the collection instruction.
If the documents are payable at another time, the performing bank must immediately present the documents for acceptance after receiving the collection instruction in order to obtain the payer’s acceptance, and the payment demand must be made no later than the payment due date specified in the document.
4. Partial payments may be accepted in cases established by banking rules or where specifically authorized in the collection instruction.
5. The performing bank must immediately make the received (collected) funds available to the Issuing Bank, which is obliged to credit those funds to the Customer’s account. The performing bank has the right to withhold from the collected funds the fees due to it and reimbursement of expenses.
| Export Collection | |
|---|---|
| Issuance of a Collection Instruction | 0.2% of the collection amount, minimum: AMD 15,000 |
| Amendment to the terms of a Collection Instruction | AMD 15,000 (in case of an increase in the collection amount, an additional 0.2% will be charged on the increased portion of the amount) |
| Discounting of a bill guaranteed through an aval | AMD 25,000 (application of the agreed annual interest rate) |
| Import Collection | |
|---|---|
| Advising of a Collection Instruction | 0.2% of the collection amount, minimum: AMD 15,000 (including VAT) |
| Advising of an amendment to the terms of a Collection Instruction | AMD 15,000 (in case of an increase in the collection amount, an additional 0.2% will be charged on the increased portion of the amount) (including VAT) |
| Guarantee of an accepted bill | 3-6% per year, calculated on the bill amount, minimum: AMD 35,000 |
| Return of documents presented for collection but not paid | AMD 35,000 |
| Payment/acceptance of a Collection Instruction | According to the transfer tariffs currently applicable at the Bank |
ATTENTION
YOU HAVE THE RIGHT TO COMMUNICATE WITH THE FINANCIAL ORGANIZATION IN YOUR PREFERRED WAY, BY POSTAL OR ELECTRONIC MEANS. RECEIVING INFORMATION ELECTRONICALLY IS THE MOST CONVENIENT. IT IS AVAILABLE 24/7, FREE FROM THE RISKS OF LOSING PAPER INFORMATION AND ENSURES CONFIDENTIALITY.
For more details:
Detailed information on the amount of possible additional payments and all the points presented is available in the Trade Financing Instruments tariffs.
Previous terms of the Trade Financing Instruments
List of excluded and subject-to-approval activities
Benefits of Export Collection:
a more secure option for receiving payments, particularly in sea transportation, when the original bills of lading are not handed over to the buyer until the buyer makes the payment or accepts the bill,
it is possible to require a payment guarantee for a bill accepted by the buyer’s bank,
it is often used as an alternative to a letter of credit when the relationship between the buyer and supplier is based on sufficient mutual trust.
Benefits of Import Collection:
You can make payment for the goods or accept the bill after reviewing the shipping documents,
the complexity of the transaction and the documentation are reduced, which often results in relatively lower bank tariffs,
provided that the relevant requirements are met, the Bank is ready to finance your transactions.
1. When is it more appropriate to use collection rather than a documentary letter of credit?
A documentary letter of credit is appropriate when the buyer and seller do not know each other and the seller is not confident in the buyer’s solvency, while the buyer, in turn, is not confident that the seller will ship the goods. In the case of collection, the buyer and seller know each other, and the seller is confident that the buyer will pay against the documents sent.
2. Is it possible to obtain financing when carrying out a collection transaction?
During a collection transaction, financing may be obtained through bill discounting. By discounting a bill with deferred payment terms, the Bank pays the customer/buyer the nominal value of the bill, less the applicable discount interest.
