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Export Bill Discounting

Name

Export Bill Discounting

Introduction

Export bill discounting means that Bank of China Brussels Branch buys from the exporter the undue time draft accepted by banks or the undue debt claim honored by banks under the export L/C, or the undue debt claim guaranteed by banks under the documentary collection. If the accepting/honoring/guaranteeing bank fails to pay at maturity, Bank of China Brussels Branch shall have the right of recourse.

Functions

The product aims to meet the short-term financing requirement of exporters under the usance L/C.

Features

1. Acceleration of capital turnover. The exporter can recover the forward debt right immediately, so that capital turnover can be accelerated and financial pressure can be eased.

2. Simplification of financing process. Financing procedures are more convenient compared with those for working capital loans.

3. Less financial expenses. The customer can choose the funding currency in accordance with the interest rates of different currencies, so as to minimize the financial expenses.

Charges

The interest rate for financing will be determined by Bank of China Brussels Branch based on Bank of China's rules on trade financing interest rate and charges and negotiation with the customer.

Target Customers

1. Exporters who have limited working capital and have to develop business by rapid capital turnover;

2. Exporters who encounter temporary difficulty in capital turnover between receipt of acceptance/ honoring/guarantee of payment from foreign banks and collection;

3. Exporters who discover investment opportunities with higher yield than discount rate after acceptance/honoring/guarantee by foreign banks and before collection.

Application Qualifications

1. Basic qualifications

(1) The applicant shall have a corporate account in Bank of China Brussels Branch;

(2) Customers who have no corporate account in Bank of China Brussels Branch shall provide CCIAA, identity document of legal representative, signature sample and authorization letter of authorized signatory.

2. The customer shall have the undue draft accepted by banks or the undue debt claim honored by banks, or undue debt claim guaranteed by banks under the documentary collection.

3. The credit line of the accepting /honoring/guarantee bank at Bank of China Brussels Branch will be accordingly deducted.

Procedure

1. The exporter presents the export documents to Bank of China Brussels Branch;

2. After examining the documents, Bank of China Brussels Branch mails the documents to the foreign issuing bank or the nominated bank to claim reimbursement;

3. Upon receipt of the documents, the foreign bank will make acceptance/honoring to Bank of China Brussels Branch;

4. After Bank of China Brussels Branch receives the acceptance/honoring, customers shall submit the application for discount, and confirmation for discount.

5. Bank of China Brussels Branch transfers the discount money to the account of exporter or any designated account of exporter in other banks (in case that the customers do not have account in Bank of China);

6. The foreign bank makes due payment to Bank of China and Bank of China will repay the discount money.

Tips

1. Exporters should agree with the importer to take the usance acceptance L/C as the settlement instrument in the trade contract;

2. Customers should submit the discount application to Bank of China Brussels Branch after the issuing bank accepts usance draft or issues acceptance advice;

3. After the usance draft is accepted by issuing bank, customers may choose export bill discounting when encountering temporary difficulty in capital turnover and having demand for short-term financing; After the usance draft is accepted by issuing bank, customers may choose export bill discounting when discovering new investment opportunities with higher expected yield than the discount rate;

4. Bank of China Brussels Branch usually does not provide bill discount for investment purpose without real and legal trade background.

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