Documents against Payments - D.A.P or D/P

What do you mean by Documents against Payments in International Trade?

 

Documents against Payment – DP/DAP is a term of payment in international trade. It relies on an instrument generally used in international trade called a bill of exchange or draft.

In this term, the documents under consignment are delivered to buyer/importer only after collecting payment of goods by buyer’s bank. The exporter ships the goods and submits Shipping documents to importers Bank with their instructions to discharge documents to the importer against payment, where the importer needs to pay the exporter when the documents being released from the Bank. The collecting bank hands over the shipping documents including the document of title only when the importer has paid the bill.

Simply, D/P is an arrangement in which a seller directs the presenting bank to release shipping and title documents to the buyer only if the importer completely pays the accompanying bill of exchange or draft.


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