Cash Against Documents (CAD) sits between first-time L/C (Letter of Credit terms) and trusted T/T (T/T payment terms) on the Egypt-to-Uzbekistan trade. Useful for mid-size wholesale (P3) and regional chain (P5) engagements where the L/C-confirmation cost is disproportionate to the contract size, but the buyer hasn't yet earned T/T standing.
How CAD works
The Egyptian exporter ships the goods and routes the original documents — Bill of Lading, commercial invoice, packing list, phyto certificate, Certificate of Origin — through the Egyptian exporter's bank to the Uzbek buyer's bank. The Uzbek buyer's bank holds the documents until the buyer pays cash on presentation. Only then does the bank release the documents — without which the buyer cannot clear customs and take possession of the goods.
The flow:
- Egyptian exporter ships and obtains BL set
- Exporter's bank sends original documents to Uzbek buyer's bank
- Uzbek buyer pays cash on presentation
- Uzbek buyer's bank releases documents to buyer
- Buyer clears customs and takes possession
If the buyer does not pay, the documents stay with the bank, the goods cannot be cleared at Uzbek customs, and the exporter retains the right to reconsign or resell the cargo.
When CAD applies
CAD is the right structure for:
- Mid-size repeat buyers at P3 wholesale or P5 regional retail who don't yet have T/T standing
- Reference buyers on first engagement where the contract size doesn't justify L/C confirmation costs
- Bank-network-verified buyers with a clean payment history at their Uzbek commercial bank
CAD is not used for first-engagement unverified buyers — those move on L/C — and is not used for established trusted volume buyers, who move on T/T 30/70 or 20/80.
Risk profile
CAD sits between L/C and T/T on exporter risk:
- Lower risk than T/T with no pre-payment — exporter retains control of documents until paid
- Higher risk than confirmed L/C — no bank guarantee of payment; if buyer refuses to pay, exporter must reconsign or resell
- Lower buyer cost than L/C — no L/C opening or confirmation fees
- Higher buyer cost than T/T — bank-collection fee applies
The trade-off makes CAD the right fit for the middle band of trade engagements.
Buyer fit
- P3 — wholesale bazaar : 18 kg orange carton mid-volume on CAD-payment, sea-Aktau or Mersin TIR routes
- P5 — regional Samarkand / Bukhara / Fergana : mid-volume mixed-cultivar pallet on CAD, with bank reference confirmed at engagement
Common questions
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Is CAD safe for the exporter? Lower risk than T/T with no pre-payment — documents remain with the exporter's bank until cash is paid by the Uzbek buyer. If the buyer refuses to pay, the goods cannot be cleared at Uzbek customs, and the exporter retains the right to reconsign or resell. The risk floor is the cost of reconsignment, not the full shipment value.
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When does our export desk accept CAD? For mid-size repeat-buyer or bank-network-verified engagements at P3 wholesale or P5 regional retail. First-engagement unverified buyers move on L/C; trusted volume buyers move on T/T.
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What's the cost difference vs L/C? CAD avoids L/C opening and confirmation fees but incurs bank-collection fees. For mid-size contracts the all-in cost is typically 30–60 % below confirmed L/C, which is what makes the structure useful for the middle band of engagements.
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Can CAD become T/T over time? Yes — once a CAD relationship has cleared multiple cycles cleanly, our export desk typically opens T/T 30/70 — see T/T payment terms.