What is the primary feature of documentary collections in international trade?

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The primary feature of documentary collections in international trade is that the seller ships documents to the buyer's bank, requiring payment before the product is released. In this arrangement, the seller provides shipping documents—such as the bill of lading—through their bank to the buyer's bank. The buyer's bank will then hold these documents until the buyer makes the necessary payment or accepts a promissory note for later payment.

This process is instrumental in ensuring that the seller has some assurance of payment before the goods are fully transferred to the buyer. It creates a level of security for the seller, as the documents serve as evidence of ownership and the conditions required for the release of goods. This differs from other options where payment and document release criteria are less securely linked, making option A the distinctive feature of documentary collections in international trade.

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