The Perfection Of Trust Receipt Financing System Under Documentary Credits In China

Many foreign banks have entered into China as the opening of Chinese banking industry. In order to occupy more markets in such a competitive environment, most of domestic banks have developed the financial business for importation, such as Inward Documentary Bill and Trust Receipt. My primary purpose is to clarify the long-argued issue, namely, what kind of rights bank has to the imported documents and related goods. My view is the relationship of Documentary Credits and the Trust Receipt should be clearly divided. In the Credits stage, bank has the right of pledge to the documents and related goods; In the T/R stage, bank has the ownership to the documents and related goods,which is the requirements of legality in trust property. The ownership comes from the assignment of importers. Then I further discuss the legal relationship of T/R and its features and the possible risks the parties may face, so that the thesis may have some practical implications to the related parties. In the Introduction of this thesis, I put forward two points. Firstly, it's not necessary to establish a separate regime of Inward Documentary Bill because the operation of Inward Documentary Bill is identical to that of Trust Receipt which is subject to an existing regime of Trust Receipt. Secondly, in the event of the Trust Receipt operation, there are different acknowledgements concerning the nature of Trust Receipt among Bankers, Traders, Courts and Scholars. Therefore, the Perfection of Trust Receipt is very urgent for the needs of import financing. In Chapter One I mainly focus two things under a comparative study: one thing is the Concept of Trust Receipt, which includes three key elements, namely, under the Trust Receipt, Bank's obtaining of the ownership of the goods referred to the Trust Receipt, for the purpose of sales and the Trust relationship instead of Guarantee Relationship; The other thing is the legal characters of Trust Receipt, which stays at three points, namely, under the Trust Receipt, the legal relationship is trust, the trust relationship is special and the right of Banks to the goods referred to Trust Receipt is Ownership. In Chapter Two I review the legal relationship of Trust Receipt. Section One is talking about the internal relationship of Trust Receipt, under which the banks take the position of Principal and Beneficiary, the Traders get the position of Trustees. Section Two is analyzing the external relationship of Trust Receipt, which show the related parties referred to Trust Receipt some possible risks. In Chapter Three I choose typical cases as my discussion concerning the operating risks of Trust Receipt, so that all the related parties will pay attention to the risks and take necessary measures to avoid the risks. Furthermore I seriously make the analysis and comments on my own. In Chapter Four I give my opinion that the Perfection of Trust Receipt has become urgent and the lawmakers should clarify some arguable points and the arrangement of the specific Trust Receipt between the banks and the traders should be clear and integrated. Then I give four suggestions in how to perfect the Trust Receipt system, namely, the opinion that the legal relationship under T/R is Trust relationship need be further recognized; The legality of Trust Property under T/R need be re-recognized; The specific legal relationship Under T/R should be mastered completely according to the Trust Law and other laws. The related Parties need keep their clear eyes on the risks of T/R transaction.