I. International Guarantee
International guarantee service offered by China Eximbank refers to the letter of guarantee (including stand-by L/C) issued to overseas creditors or beneficiaries that commits 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).
Business Coverage
The international guarantee service covers the following activities:
■export of Chinese-made mechanical and electronic products, complete sets of equipment, and high- and new-tech products;
■overseas projects conducted by Chinese companies including overseas construction contracts, offshore processing trade and overseas investment projects;
■international tendering projects located in China that are financed by international financial institutions or foreign government loans.
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 in line with 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.
Operating Body
China Eximbank Head Office started its international guarantee service in 1996.
Since 2003, the Head Office has handed over completely this service to its business
branches. Those regions where the Bank has so far no business branch are covered
by its Beijing Branch. The Bank's International Business Department takes charge of
management on this line of service for the whole bank.
Services Available
Letter of Guarantee opened at clients’ request
Non-Financing Guarantee
Non-Financing Letter of Guarantee includes 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 the like under trade and contracting projects.
Financing Guarantees
Financing Letter of Guarantee includes loan guarantee, capital leasing guarantee,
compensation trade guarantee, guarantee for payment deferring 12 months or more,
and other guarantee for clients’ financing activities.
Issuance of Letter of Intent for Guarantee
Advising and Transfer of Guarantee Letters as entrusted by other banks
Handling Damage Claims for Clients
Tender Guarantee
In an international tendering, the offering tender usually requires from the bidder
a bank guarantee that serves as a security against any of the following default
possibility. When there is a breach of promise, the guarantor bank shall redeem the
offering tender with payment for the amount covered in the Letter of Guarantee:
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 tender after his successful bidding;
3)The bidder fails to submit a Letter of Performance Guarantee within the stipulated period of time.
Performance Guarantee
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 tender 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 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 owner, 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 provide the importer/project owner with a bank
guarantee to safeguard any default possibility. When 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/project owner with repayment of the
advancement payment plus interest as stipulated in the Letter of Guarantee.
Quality Guarantee
In a contract of goods supply, 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 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 project
owner as a security against any loss 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 money from the project owner, he would approach a bank for providing a Maintenance & Repair Guarantee Letter, which will ensure that the guarantor bank shall redeem the project owner 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 assurance
from a bank for a Deferred Payment Guarantee, which will ensure that the bank will
make the due payment when the importer fails to pay the balance as previously
agreed./3CBR>Operation Procedures
1. Application. A customer who applies for a Letter of Guarantee shall present to
the Bank the following documents:
■Application Form (China Eximbank format);
■Duplicate copy of the commercial contract or the tender application and other
related documents;
■Required format of the Letter of Guarantee;
■Supporting information on the project in question;
■Audited financial statements of the recent three years, and the latest of the current
year;
■Counter-guarantee measures and evidentiary documents including caution
money, credit line exclusive for guarantee, credit counter- guarantee, mortgage,
pledge, and etc. When credit counter-guarantee is applied, the guarantor's
audited financial statements of the recent three years should be provided;
■Other documents required by the Bank.
For first-time customers applying for the guarantee service, the following
documents need to be submitted in addition:
■Copy of business license;
■Copy of the authorized license for export and import;
■Loan account card already annually examined by People's Bank of China with
verified valid password;
■Statement documents verifying the business administration relationship of the
applicant (if there is any);
■A statement of the official Chinese and English name of the applicant;
■Letter of Authorization from the legal representative; and
■Other documents required by the Bank.
2. China Eximbank shall review and verify the credit standing, performance ability,
feasibility of the stated project and guarantee clauses.
3. Counter-guarantee measures shall be in place.
4. Service charges and commission shall be paid.
5. Letter of Guarantee is issued and submitted.
Attention
1. Companies that suffer business losses for three consecutive years are not
qualified for such service.
2. Applicants featuring big clients and big projects can apply for Exclusive Credit
Line of Guarantee at the Bank.
II. International Settlement
With the opening of its business branches, China Eximbank has started to offer
international settlement services and sales and purchases of foreign exchange for
loan clients. At present, the Bank has set up correspondent relationship with over
500 foreign banks and their branches covering 151 countries and regions, which
assures a strong international settlement network.
With its fast and convenient settlement instruments and widespread correspondent
network, the Bank expects to provide customers with secured, high-quality and
highly proficient financial services.
Services Available
1. Letter of Credit
Letter of credit (L/C) is a commitment for conditional payment by a bank. It is a
written document issued by a bank upon the request and instruction of the L/
C applicant, committing that the issuing bank would make payment to a named beneficiary for a stated amount of money within a specified period of time against the presentation of documents which comply precisely with the terms of L/C.
The L/C settlement at China Eximbank is strictly aligned with the Uniform Customs and Practice for Documentary Credits (UCP 500) of the International Chamber of Commerce (ICC).
Import Letter of Credit
Service Varieties:
1)Issuance of L/C;
2)Amendment of L/C;
3)Receipt and verification of the documents under the L/C from abroad;
4)Making payment, acceptance or dishonor;
5)Issuance of Bill of Lading Guarantee.
Export Letter of Credit
Service Varieties:
1)Advising L/C;
2)L/C transfer and transmit between different areas;
3)Examination of documents submitted by the exporter;
4)Presentation of documents and claiming for payment or reimbursement;
5)Collection, settlement of payment, and crediting account of payment
2. Collection
Collection refers to the settlement that the creditor entrusts a bank to inform and
demand the debtor for payment to the creditor's account via the associate bank or
the correspondent bank on the basis of presenting the financial documentary for
payment and / or commercial invoice to the bank.
Based on the document types presented by the principal, collection could be
divided into clean bill collection and documentary collection. In the case of clean
bill collection, the principal presents only financial documentary to the bank; and in
the case of documentary collection, the principal presents to the bank commercial
documentary or both commercial and financial documentaries.
When handling collection settlement business, China Eximbank strictly follows the
ICC No. 522 Publication of Uniform Rules for Collection (URC 522).
Outward Documentary Collection
Outward documentary collection refers to the international settlement that the
principal (domestic exporter) entrusts China Eximbank to collect payment for goods
from the importer via the importer's bank after the delivery of goods upon the
principal's submission of relevant commercial documents,.
Clean Collection
Clean collection refers to the settlement that the principal (creditor) entrusts
China Eximbank to demand payment to the creditor's account from the debtor
via the collecting bank on the basis of banking documents (not accompanied by
commercial documents), bonds, deposit receipts, deposit books and other value
paper for payment presented by the creditor to the Bank.
Inward Collection
Inward collection service refers to the settlement that the overseas correspondent
bank (the remitting bank), upon the request of the exporter (the creditor), entrusts
China Eximbank to collect payment from a Chinese importer (the debtor) customer,
who is a client of the Bank.
On receipt of the collection documents from the overseas remitting bank, the Bank
presents documents to its customer and demands payment or acceptance from the
latter as requested by the overseas remitting bank.
Remittance
Remittance refers to the transferring of funds from the importer to the exporter via
the bank. It is one of the most simple, convenient and common terms of payment in
international trade.
Generally, there are three types of remittance: Telegraphic Transfer (T/T), Demand
Draft (D/D) and Mail Transfer (M/T), of which the telegraphic transfer is the most
common one. Telegraphic transfer, often shortcut to "T/T", refers to the fast, simple
and low-cost process in which the importer entrusts a bank to transfer funds to the
payee by means of encrypted telex or SWIFT instruction.
Inward Remittance from Abroad
Inward Remittance from abroad refers to the settlement of funds that the remitter of
a foreign country or of Hong Kong, Macao, and Taiwan areas transfers to the Bank
via an overseas bank, and the Bank shall credit the designated payee's account
according to the instructions of the remitting bank.
Outward Remittance to Abroad
Outward Remittance Service refers to the settlement of transferring, at the request
of the remitter, foreign exchange funds to the designated overseas account of the
payee. It includes trade and non-trade remittance of foreign exchanges under
current account and remittance of foreign exchanges under capital account.
3. Entrusted Loans
Entrusted loans refer to a the service in which China Eximbank (the lender, or the
trustee), entrusted by the client to serve on his behalf, provides loans to the target
borrower for certain uses, in certain amounts, over certain maturity periods and
at a certain interest rate as specified by the client. The funds of the loan come
from the trustor, and China Eximbank is responsible for disbursing, supervising
and collecting the loan. In this case, the lender (the trustee, China Eximbank) only
charges commission fees and does not should loan risks.
Prospective Clients and Application Requirements
Prospective clients include large and medium-sized Chinese enterprises that
have colse business cooperation with the Bank.
Application Documents
Documents to be provided by the trustor:
1)Letter of Attorney for entrusted loan;
2)Profile statement of the trustor, duplicate copy of the business license
that has passed the annual examination and other documents that
demonstrate the credit standing and the operation of the trustor;
3)Commercial contract, Articles of Association, relevant resolutions of the
Board of Directors, and Letter of Authorization;
4)Other documents required by the Bank.
Documents to be provided by the borrower:
1)Borrowing application;
2)Profile statement of the borrower, duplicate copy of the business license
that has passed the annual examination and other documents that
demonstrate the credit standing and the operation of the borrower;
3)Commercial contract of the borrower, company charter, relevant
resolutions of the Board of Directors, and Letter of Authorization; and
4)Other documents required by the Bank.