Define Documents against acceptance (D/A).

Documents against Acceptance (D/A)

 

Documents against Acceptance are another term of payment in international payment.

The Documents against Acceptance (D/A), depend on an instrument broadly used in international trade called a bill of exchange or draft. Under this, transaction utilizes a time draft or Usance (It is the allowable timeframe, allowed by custom, between the date of the bill and its payment) i.e, the Exporter allows credit to Importer. The importer is required to accept the bill to make a signed promise to pay the bill at a set date later on. When he has signed the bill in acceptance, he can take the documents and clear his goods.

Simply, D/A is an arrangement in which an exporter instructs a bank to discharge shipping and title documents to an importer only if the importer accepts the accompanying bill of exchange or draft by signing it. In this case, the documents required to take possession of the goods are released by the clearing bank only after the buyer accepts a time draft drawn upon him.


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