Product Name

Payment Guarantee

Product Description

Payment Guarantee is a written undertaking issued by Bank of China at the request of the buyer in favor of the seller under the contract, guaranteeing that the buyer will fulfill the payment obligations under the contract for the purchase of goods, technology, patent or labor.

Functions

Ensure the contract payment.

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.Guarantee the fulfillment of contractual obligations, as well as the quality of the subject matter under the contract. Guarantee the performance of the contract.

3.Ensure the payment for the contract. Timely payment for goods is guaranteed with the effect similar to L/C in the commodity trade.

4.It is widely applied, not only to the commodity trade, but also to the construction projects.

Eligible Applicants

Buyers involved in the sales contracts, owners involved in engineering contracts (the tenderee) and so on.

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 prove its legal operation and scope of business.

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

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