Product Name

Advance Payment Guarantee

Product Description

Advance Payment Guarantee is a written undertaking issued by Bank of China at the request of a customer in favor of the owner of a contracted construction project or the buyer of a sales deal, guaranteeing that the applicant will fulfill the contractual obligations after the owner or the buyer makes the advance payment.

Functions

Ensure that the advance payment is received in time, and speed up the capital turnover during the project construction period and the goods preparation period.

Features

1.Solve the problem of mutual mistrust between both parties of a transaction.With good reputation, Bank of China acts as a guarantor to ensure the smooth transaction by providing guarantee for the parties.

2.Ensure the fulfillment of the contractual obligations, and the quality of the subject matter under the contract.

3.Provide contract payment protection.

Indemnify the damaged party and penalize the defaulting party in case of breach of contract to avoid and reduce the contract breaching activities, thus saving the time and expenses arising from litigation or arbitration.

Eligible Applicants

1.Contractors in the engineering projects.

2.Suppliers under the material procurement Contracts.

3.Sellers in the shipbuilding projects.

Application Requirements

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

2.The applicant shall have the qualification to engage in the relevant business (such as the qualification of contracting international projects, construction qualification of building enterprises, etc.).

3.The applicant shall have a credit line at Bank of China, or pay full margin, or full guarantee acceptable to Bank of China.

Procedure

I.Application for letter of guarantee

1.The applicant fills out an application form.

2.The applicant pays the margin or has the relevant credit line.

3.The applicant submits primary documents related to the contract.

4.The applicant submits other documents necessary for the issuance of a letter of guarantee as required by Bank of China.

II.Verification and issuance of letter of guarantee

1.Bank of China verifies the customer's qualification, underlying transaction and relevant documents.

2.Bank of China confirms the customer's margin or credit line.

3.Bank of China verifies the written application and the form of letter of guarantee.

4.Bank of China issues the letter of guarantee.

Gentle Reminders

1.Amendment to letter of guarantee: On 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 against 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 the guarantee issuing bank verifies the claim documents and confirms that they are in compliance with the claim clauses under the guarantee.