In terms of risk, D/Cs are much safer than an open account but have fewer safeguards than a letter of credit, since the banks neither guarantee payment nor verify document accuracy and authenticity. These features can be exploited by fraudsters posing as either the exporter or importer. As a result, D/Cs are not recommended for exports to nations that are politically or economically unstable. Overall, because of their lower cost and simple process, D/Cs are best suited for established trade relationships in sound export markets, and for transactions involving ocean shipments rather than air or land shipments which are more difficult to control.
Read more: Documentary Collection Definition | Investopedia http://www.investopedia.com/terms/d/documentary-collection.asp#ixzz4OEKVNJQP
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