Legal Research Of Protection For Financing Banks'Interests Under Export Credit Insurance

This paper illustrates that more trade opportunities have been introduced by China's entry into The World Trade Organization, as well as challenges it poses to China's exporters. The author depicts political and commercial risks faced by exporters, especially those commercial risks from overseas buyers when non-L/C payment terms are used.Through comparison among three modes of credit guarantee and trade financing facilities: export factoring, forfaiting and export credit insurance, the author concludes that export credit insurance is the most applicable method to enhance banks competitive edge through providing export finance to exporters covered. When a exporter has get covered under a export credit insurance policy, his export receivables will be protected against risks. Then the arrangement of "Claim Payment Transfer Agreement" by the three parties will secure the financing bank's position of being paid when a claim is payable.However, in the "Claim Payment Transfer Agreement" by the three parties: the exporter, the insurer and the financing bank, the financing bank plays a very passive role. The author illustrates the two main aspects of the constraint of the financing bank's right for claim payment and giving corresponding risk control suggestions. For the constraint from the policy terms and conditions, namely, the exclusions, the buyer's credit limit and the aggregate indemnity limit of the policy, the insured's obligations and the indemnity percentage, the author gives her opinion of risk control for the financing bank; for the constraint from the absence of financing bank's claiming right while the insured under the policy is unable to lodge the claim, even the claim is justified, the author suggests that the financing bank should be given right in substitute for the insured for lodging claims against insurer for more protection.The author's opinions might have some degree of practical significance for better protection for financing bank's interests and enhancing healthy circulation of insurance and trade finance.