A trade finance mechanism in which banks facilitate the collection of payments for goods in international trade. The exporter's bank forwards shipping and title documents to the importer's bank, which releases them only upon payment or acceptance of a draft, ensuring a structured and secure settlement process.
Main/
Documentary Collection
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Code
PS0003
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Name
Documentary Collection
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Version
1.0
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Category
Trade Finance & Commerce Enablement
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Created
2025-03-14
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Modified
2025-04-02
Related Techniques
- Falsified invoices and shipping documents prompt banks to release payment upon presentation, despite goods being misrepresented.
- Criminals collude with counterparties to exploit minimal verification of underlying trade details.
- Criminals reuse duplicate or nearly identical shipping and invoice documents for the same goods, presenting them to different banks for collection.
- Each bank processes what appears to be a legitimate trade transaction, resulting in multiple payments for one actual shipment.
- Offenders submit shipping documents reflecting inflated costs through documentary collection procedures.
- Payments to the exporter exceed true market values, with the surplus laundered as routine trade expenses.
- Fraudulently inflated or undervalued documents presented for collection mislead banks about the real worth of goods, enabling disguised movement of illegal funds.
- The limited scope of physical verification in documentary collection processes makes it easier to employ falsified trade documentation.
- Falsified bills of lading and other shipment documents allow criminals to claim payment for goods that do not exist or are overstated in value.
- The reliance on documentary checks rather than physical inspections fosters opportunities to disguise illicit proceeds as legitimate trade settlements.
- Criminals submit falsified documentation through the banking system to claim payment for diamond shipments at inflated values.
- Recurrent manipulation of shipping and customs records complicates due diligence, allowing them to mask illicit transactions behind ostensibly legitimate trade paperwork.
- By presenting counterfeit or altered shipping documents, criminals trigger the release of funds from the importer's bank.
- The reliance on documentary evidence—often unchecked in detail—allows misrepresented shipments to remain undetected.
- Criminals present falsified shipping documents to the importer's bank, triggering payment without any genuine goods being shipped.
- They exploit reliance on supposedly authentic paperwork to transfer illicit funds internationally.
- The exporter’s bank forwards nonexistent or falsified shipping documents to the importer’s bank, releasing payments under the assumption that goods are en route.
- This allows layering of illicit funds by fabricating trade activity with no corresponding physical cargo.
- Criminals present falsified documents under documentary collection arrangements to secure payments for phantom or misrepresented goods.
- This method facilitates illicit fund transfers disguised as legitimate trade settlements.
- Criminals use forged or inflated bills of exchange and supporting shipping documents in the collection process, prompting banks to release or collect payments on fake trade deals.
- Collusive repayment with illicit funds further obscures the criminal source, appearing as genuine trade settlements.
- Criminals submit falsified or incomplete bills of lading under D/P or D/A arrangements, concealing the true nature or value of goods.
- Because banks rely heavily on these documents when releasing funds, forged paperwork passes as legitimate trade documentation, enabling illicit proceeds to be transferred with minimal scrutiny.
- Launderers present incomplete or falsified documents alongside partial or repeatedly shipped goods.
- Multiple bank intermediaries and jurisdictional layers make it difficult to detect inconsistencies, permitting illicit funds to flow under the guise of legitimate trade settlements.
- Manipulated bills of exchange and shipping documents misrepresent goods, enabling payment releases that do not correspond to real cargo.
- Forged or inconsistent documentation hides the legitimate value or quantity of shipments, facilitating the flow of illicit funds.
- Criminals provide doctored documents to banks, concealing the true value or origin of shipments.
- Discrepancies in shipping or trade documents across multiple collections hinder detection of suspicious patterns.
- Used in trade-based moves where shipping and title documents can be altered to hide sanctioned beneficiaries.
- Complex documentary chains and multiple intermediaries make attributing final ownership or payees challenging.
- Criminals can manipulate trade documents to misrepresent the shipped goods, hiding the contraband nature.
- Payment release under documentary terms makes the funds appear connected to a legitimate commercial transaction.
- By submitting misleading or incomplete shipping and title documents, traffickers can collect funds for weapon sales under the guise of regular trade.
- Limited oversight and reliance on provided documentation can facilitate payment without revealing the actual cargo.
- Banks handle collection of payments for perceived commodities shipments, relying on documents that may be forged or inflated.
- This structure makes it harder to detect that goods are illegally sourced or misrepresented to launder funds.
- By controlling the release of shipping documents until payment, traffickers mitigate the risk of early detection for illicit wildlife cargo.
- Collusion with or exploitation of counterparties allows the real merchandise to remain hidden behind routine trade settlement processes.
- Criminals submit shipping and payment documents containing inflated values, prompting the importer’s bank to settle an artificially high amount.
- Limited scrutiny of actual goods or real pricing under documentary collection allows overvalued exports to slip through as routine trade transactions.