Introduction
At the request of processing trade enterprises, Bank of China issues a guarantee in written form to customs house which says that the processing trade enterprises will fulfill product exporting liabilities or pay taxes according to regulations within the valid period of the processing trade contract manual verified by the customs house.
Functions
It's a financial product which helps the processing trade enterprises to implement national regulations on bank's margin ledger for imported processing trade items, which can reduce capital occupation caused by machine account margin payment; significantly reduce enterprises' operation costs; improve the commercial credit of enterprises and promote transactions. At present, Bank of China is the exclusive bank providing this letter of guarantee service.
Features
1. Reduce capital occupation due to ledger margin payment;
2. Improve the commercial credit of enterprises.
Scope of Application
Processing trade enterprises.
Application Qualifications
1. The applicant shall have the qualification to engage in processing trade;
2. The applicant shall maintain good credit standing without any bad record;
3. The applicant shall have sufficient credit line or be able to pay sufficient margin necessary for issuing the letter of guarantee;
4. The applicant shall possess real relationship of transactions that meets Bank of China's requirements on business compliance;
5. The applicant shall provide complete and valid business information.
Process
1. The customer submits application for letter of guarantee and relevant documents;
2. Bank of China reviews the documents and issues the letter of guarantee;
3. Bank of China charges guarantee fees;
4. Bank of China amends the letter of guarantee;
5. Bank of China makes compensation against the letter of guarantee or cancels the letter of guarantee.
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