The legal document governing collection methods is The Uniform Rules for Collection (URC) compiled by the International Chamber of Commerce (ICC) and first published in 1956. This rule was revised in 1967 and 1978 respectively. In 1995, the rule was again revised to bear number 522 (The Uniform Rules for Collection No 522 Revision 1995 – URC 522 1995 ICC), effective 1.1. .1996. URC 522 1995 ICC is an international custom, so it is not binding on the parties. If URC 522 1995 ICC is to be applied, the parties must refer to the underlying contract and Collection Directive.

The process of collecting smooth collection in international commercial contracts usually takes place as follows:

• The Exporter or the Service Provider delivers the goods or provides the service and sends the shipping documents directly to the Importer.
• The exporter or service provider draws drafts or invoices for payment from the importer and writes a Collection instruction entrusting his country’s bank to collect money from the Importer.
• The Remitting Bank entrusts its Collecting bank in the importing country with a Collection instruction and accompanied by a bill of exchange, promissory note, check or invoice. ask this bank to collect money from the Importer.
• Collecting bank presents a bill of exchange, promissory note, check or invoice for payment by the Importer.
• The Collecting bank transfers the proceeds to the beneficiary (Principal).
• The Collecting bank reports the money transfer to the Remitting Bank’s account.
• The Remitting Bank transfers money to the Beneficiary’s account.

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