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Foreign
Collection Documents
Drafts/Transmittal Letters
A negotiable instrument, the Draft must
contain all the following elements: It must be signed by the
drawer, it must be payable
on demand (Sight) or at a specific time (Time), it must contain
an unconditional order to pay a certain sum of money, and it
must be properly endorsed either to the drawer or to the drawer's
bank.
The Transmittal/Remittance Letter contains the shipper's complete
and precise instructions on how the documents are to be handled
and how payment is to be made.
Sight Draft
When a drawer creates a draft drawn on
sight, any shipping documents accompanying the draft may not
be released until the amount stated on the draft has been paid
to the drawer by the drawee.
Time Draft
With a Time Draft, the drawer releases the shipping papers to the drawee who, in turn, agrees to pay the amount stated on the draft within a specified period of time. 
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