Obligation of collecting bank to protest

Simple is Beautiful; the only thing came in my mind when thought of documentary collection. And I think more and more people are thinking the same in these days. Documentary Collection offers us far greater security than selling on open account; but not as much as a documentary credit. We should therefore be more cautious before starting selling using this method of payment. Documentary Collection Forum is an effort to help you on this way – admin; besttradesolution.com
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Obligation of collecting bank to protest

Post by MarMur » Wed May 24, 2017 1:09 pm

Dear experts,

I would be grateful if you could answer the following questions regarding documentary collection:

1.In collection instruction it is stated "protest non-payment". If the collecting bank presents the documentս to the drawee and the drawee refuses the documents, is the collecting bank obliged to protest??
2.The instruction says "charges are for the drawee and cannot be refused". If the drawee refuses the documents what shall the collecting bank do with its charges?

Many thanks in advance

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URC 522

Post by picant » Sat Jun 03, 2017 1:38 pm

Hi Pal,

the condition is clear, you have to protest following your domestic law. On receipt of documents
you may ack them and ask for the amount necessary to afford protest fee.
Same with charges for drawee, if the collecting bank has no way to be reimbursed by the drawee, it will ask refund from the remitting bank.
Art 21 e 24 URC 522.

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Re: Obligation of collecting bank to protest

Post by dv01001 » Wed Oct 04, 2017 8:47 pm

i just to add one more comment: No matter how the relationship between the collecting bank and the drawee are, the collecting bank's duty and responsibility to the remitting bank overrides any duty to its customer. Therefore, the collecting bank should chase the payment and at least protect fee as wells

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