Why Sight Draft is Necessary in DP?

[mesumshah]

If documents are being sent on collection basis wherein Term of Payment is DP (Delivery against Payment), Documents has to be delivered to the Importer against Payment, Why Sight Draft is required & sent with Document Package?

Is Sight Draft a legal requirement to be included in documents package being sent for collection on DP Basis. Secondly If documents are being sent (on DP) without Sight Draft, what is the risk associated with the parties to collection (Importer, Exporter, Importers Bank & Exporters Bank).

[picant]

Hi Pal,

Draft is not necessary in d/p, but if you request a protest in case of no payment it is better to send a draft too. In my Country there are two type of protest, on draft, bill of exchange, cheque but on documents too, public notary or authorized officier will demand you, if you want to pay a supply and if not they lift a protest, this process has some commercial, legal effects...offerta reale delle merci).
But usually we speak about protest of bill of exchange(protesto cambiario) that has legal effect and inscription of the bad debtor in a special List (bollettino protesti).
However, IMHO, draft must be presented in a D/P at sight, only if protest will be required.
Other comments appreciated.
Ciao
.
P.S. Draft are normally affected by stamp duties, very expensive.

[Virendra]

Absolute agreement with Ciao..every aspect covered (in my view).

[JohnYoung]

Got cleared many issues regarding draft policies. Why these document procedures are not still digitized?