kind of payment for products that the related documents of the transferring title to the products won’t be accessible for the customer until he/she pays the price of the exchange or draft issued against him.
An agreement under which an exporter directs the presenting bank to hand over shipping and title documents (see the document of title ) to the importer only as long as the importer completely pays the corresponding bill of exchange or draft. It is also called cash against documents.
After the products are shipped, the exporter sends the sight draft to the clearing bank, along with documents necessary for the importer/buyer to take the products from customs. The purchaser has to settle the payment with the bank before the documents are published and he can take delivery of the merchandise. If the customer fails or refuses to cover the exporter has the right to recover the products and resell them.