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A document executed by a buyer in favour of a bank financing an important transaction, whereby the bank receives a security interest in the goods in exchange for releasing the documents required by the carrier for delivery. The buyer is obligated to maintain the goods or to proceeds from their resale at the disposal of the bank. Trust receipts are used under letters of credit or collections so that the buyer may receive the goods before paying the issuing bank or collecting bank. See documentary collection; letter of credit.
