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Advance Payment Guarantee

Name

Advance Payment Guarantee

Introduction

Advance payment guarantee is a written document issued by Bank of China Brussels Branch at the request of the customer to the owner of a contracted project or the buyer of a sales deal, guaranteeing that the applicant will strictly perform the duties under contract after the owner or buyer pays the advance payment.

Functions

The product ensures that the advance payment is received in time by customers, speeding up the capital turnover during the project construction and the goods preparation period.

Features

1. It solves the problem of mutual mistrust between both parties of a contract. With its good reputation, Bank of China Brussels Branch acts as the guarantor of the contractor or buyer to promote the performance of the contract.

2. The product provides contract performance protection and payment protection.

3. When the contractor of a project or supplier breaches the contract, the owner or buyer can receive economic indemnity and the default party can be economically punished by implementing the guarantee, therefore effectively reducing the possibility of breach, and avoiding the cost incurred by arbitration or proceeding to solve disputes related to the contract.

Charges

The charges are subject to the charging principle and rate applied in the relevant rules of Bank of China Brussels Branch.

Target Customers

1. Contractors in the engineering projects;

2. Suppliers in the material procurement projects;

3. Contractors in the shipbuilding projects;

Applicant Qualifications

1. The applicant shall have an corporate account in Bank of China Brussels Branch;

2. The applicant shall hold a business license of a legal person that has passed the annual inspection or other valid official certificates which fully prove its operation and scope of business;

3. The applicant shall have the qualification to engage in relevant business (such as qualification of contracting foreign projects, construction qualification of building enterprises);

4. The applicant shall have a credit line in Bank of China, or pay full counter guarantee acceptable to Bank of China or full margin.

Procedure

1. Application for letter of guarantee

(1) The applicant fills out an application form;

(2) The applicant pays margin or submits other counter guarantee;

(3) The applicant submits primary documents related to the business background (such as preliminary contracts);

(4) The applicant submits other documents necessary for issuance of a letter of guarantee as required by Bank of China Brussels Branch.

2. Verification and issuance of letter of guarantee

(1) Bank of China Brussels Branch examines the customers' credit standing, qualification, underlying transaction background and relevant documents;

(2) Bank of China Brussels Branch examines the application and form of letter of guarantee for irregularities;

(3) Bank of China Brussels Branch checks and confirms the customer's credit line, margin or other counter guarantee;

(4) Bank of China Brussels Branch issues the letter of guarantee.

Tips

1. Amendment to letter of guarantee: At the request of the guaranteed party and the beneficiary, the clauses under the letter of guarantee can be amended, for example, the validity period can be extended;

2. Payment/compensation of letter of guarantee: If the beneficiary claims compensation within the validity period of the guarantee, the applicant shall be notified in time. The payment shall be made after Bank of China Brussels Branch verifies the claim documents and confirms that they are in compliance with the claim clauses under the guarantee.

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