International guarantee service offered at China Eximbank refers to the letter of guarantee (including Stand-by Letter of Credit) that the Bank issues to the overseas creditors or beneficiaries committing itself to fulfill the obligations stated in the letter of guarantee when the debtor or the guaranteed fails to service a debt or fulfill their obligations as required by the relevant contract(s).

Target Sectors

The international guarantee business provided by the Bank is outward service that supports the export of chinese-made mechanical and electronic products, complete sets of equipment, and high- and new-tech products as well as the ¨°going global?projects by Chinese companies including overseas construction contracts, offshore processing trade and overseas investment projects. Besides, those international tender projects based in China as financed by international financial institutions and foreign government loans are also within the coverage of this service.

Prospective Clients

Prospective clients seeking international guarantee service at the Bank include companies and/or organizations that are accredited with independent legal person status, authorized to handle import-export lines, and compliant to the terms and requirements promulgated by the People?s Bank of China in the Procedures on the Administration of External Guarantees Provided by Institutions within Chinese Territory.

Handling Divisions

China Eximbank Head Office started its international guarantee service in 1996. Since 2003, the Head Office handed over this service to its business branches. Those regions where so far have no business branches are covered by the Banking Department (H.O.) in Beijing. The Bank?s International Business Department takes the management responsibility of the international guarantee services for the whole bank.

Services Available

1. Letter of Guarantee drawn at the request of clients

Non-Financing Guarantee
Non-Financing Letters of Guarantee include tender guarantee, performance guarantee, advance payment guarantee, quality guarantee, customs duty payment guarantee, maintenance and repair guarantee, guarantee for payment deferring 12 months or less, and other deeds of similar nature.

Financing Guarantees
Financing Letters of Guarantee include loan guarantee, capital leasing guarantee, compensation trade guarantee, guarantee for payment deferring 12 months or more, and other deeds that undertake guarantee obligations for bank clients seeking financing support.

2. Issuance of Letter of Intent for Guarantee

3. Advising and transferring of Guarantee Letters as entrusted by other banks

4. Handling damage claims for clients who so apply

Tender Guarantee
In an international tendering, the offering tenderer shall require a bank guarantee from the bidder which serves as a security against any of the following default possibilities. In case there is a breach of promise the guarantor bank shall redeem the offering tenderer with payment as stipulated in the Letter of Guarantee.Such as:
1.Within the agreed period of validity the bidder revokes his bidding or amends his quotation;
2.The bidder fails to sign a contract with the offering tenderer after his successful bidding;
3.The bidder fails to present a Letter of Performance Guarantee within the stipulated period of time.

Performance Guarantee
A Performance Guarantee refers to the bank guarantee presented by the exporter or the contractor when they, through successful tendering, sign a contract with the offering tenderer for undertaking the construction project or for supplying goods. This assures the importer or project owner (the tenderer) that the guarantor bank shall redeem the importer or project owner with payment as stipulated in the Letter of Guarantee in case that the exporter or the contractor (the invited bidder) fails to perform or fulfill his share of obligations and responsibilities.

Advance Payment Guarantee
When dealing with import and export transactions, the importer, before the signing of the contract, shall pay the exporter a certain sum of prepayment for the latter?s supplying of goods. Similarly, when contracting an international engineering project, the project proprietor, before the signing of the contract, shall pay the contractor a certain sum of prepayment for undertaking the project. On the other hand, the exporter or the contractor shall prepare a bank guarantee with which to safeguard any default possibilities. In case there is a breach of promise on the part of the exporter or contractor in the performance of the contract, the guarantor bank shall redeem the importer or project proprietor with repayment of the advancement payment plus interest as stipulated in the Letter of Guarantee.

Quality Guarantee
In a goods supply contract, the buyer often requires the seller to provide a bank guarantee to ensure that the guarantor bank shall compensate the buyer with the sum stated in the Letter of Guarantee when the quality of the goods supplied proves not agreeable with the contract terms and the seller proves unable to provide replacement or furnish repair service.

Customs Duty Payment Guarantee
When contracting an international construction project or participating in an international exhibition or fair, a contractor or exhibitor shall deposit a certain amount of customs duty to the customs house of the host country as a security for the transportation of construction machinery or exhibits from their home country to the site of the construction or exhibition premises in the host country. The customs shall refund the earnest money when the machinery or exhibits are transported out of the host country upon the completion of the construction contract or the end of the exhibition or fair. The contractor or exhibitor often approach a bank for providing a Letter of Guarantee in lieu of the deposit at the custom house of the host country, which serves as a security ensuring that the guarantor bank shall pay the customs duty when the contractor or exhibitor fails to transport the machinery or exhibits out of the host country.

Maintenance & Repair Guarantee
A construction contract often grants a part of the project payment to the proprietor as a security against any losses resulting from defects due to quality problems of construction in case that the contractor fails to repair or replace. When the contractor seeks the refund of this sum of deposit from the proprietor, he would approach a bank for providing a Maintenance & Repair Guarantee Letter, which will ensure that the guarantor bank shall redeem the proprietor with the sum stipulated in the Letter of Guarantee if the contractor fails to repair or replace when the construction quality does not agree with the contract clauses.

Deferred Payment Guarantee
When importing by means of deferred payment, the importer may ask for assianstance from a bank for a Deferred Payment Guarantee, which will ensue that the bank will make the due payment when the importer fails to pay the balance as per previous agreement.

Operation Procedures

1. Application. A customer who applies for a Letter of Guarantee shall present to China Eximbank the following documents:

For those first-time customers applying for the guarantee service at China Eximbank, they shall be required to submit the following documents

2. China Eximbank shall review and verify the credit standing, performance ability, feasibility of the stated project, and clauses of the guarantee in question.

3. Counter-guarantee measures shall be arranged in order.

4. Service charges and commission shall be paid.

5. The Letter of Guarantee is prepared and presented.

Precautions on Handling International Guarantee

1.Those companies that have suffered business losses for three consecutive years are not acceptable at the Bank for international guarantee services.

2.Applicants could approach the Bank for providing Exclusive Credit Line of Guarantee for big clients and big projects.