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Product Name
Advance Payment Guarantee
Product Description
A written document issued by Bank of China at the request of a customer to the owner of a contracted construction or the buyer of a sales deal, guaranteeing the applicant will fulfill the contractual obligations after the owner or the buyer makes advance payment.
Product Functions
Facilitate timely receipt of advance payment, as well as speed up capital turnover during project construction and preparation-of-goods period.
Product Features
1. Solve the problem of mutual mistrust between both parties of a transaction. With good reputation, Bank of China involves in the transaction and acts as a guarantor to promote smooth transaction by providing guarantee for the parties.
2. Guarantee fulfillment of contractual obligations.
3. Guarantee payment of contract price.
4. Indemnify the damaged party and penalize the defaulting party in case of breach of contract to avoid and reduce contract breaching activities, thus saving trouble and expenses arising from litigation or arbitration.
Eligible Applicants
1. Contractors involved in constructed projects;
2. Suppliers involved in material procurement projects;
3. Sellers involved in shipbuilding contracts.
Application Requirements
1. The applicant shall hold a business license of legal person that has passed the annual inspection or other valid certificates which fully prove its legal operation and scope of business;
2. The applicant shall have the qualification to engage in relevant business (such as qualification of contracting foreign projects, construction qualification of building enterprise, 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.
Application Procedures
I. Application for letter of guarantee
1. The applicant fills out an application form or a contract for issuance of a letter of guarantee;
2. The applicant pays margin or submit other counter-guarantee;
3. The applicant submits primary documents related to the contract;
4. The applicant submits other documents necessary for issuance of a letter of guarantee as required by Bank of China.
II. Examination and issuance of letter of guarantee
1. Bank of China examines the customer qualification, underlying transaction and relevant documents;
2. Bank of China confirms the customer's margin or credit line and other mortgages;
3. Bank of China examines the written application and form of letter of guarantee;
4. Bank of China issues the letter of guarantee.
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