Study On The Legal Issues Of Import Bill Advance In International Trade Finance

With the rapid development of import and export business, trade finance by means of import bill advance has been rendered as one of the financial services by commercial banks. However there are disputes over import bill advance and its application, legal relations, and rights and obligations of parties involved among researchers, financial institutions and legal practioners . By studying the cases from commercial banks and judicial decisions and analyzing different views over the truth of import bill advance, such as mortgage, pledge, trust, ownership's retention, this essay portraits the present situation of import bill advance in China. The legal characteristics of and guarantee mechanism for import bill advance adopted by commercial banks are summarized after listing the definitions and operation requirements of import bill advance in Bank of China, China Construction Bank, Industrial Bank, and Shenzhen Development Bank. Import bill advance is a kind of short-term finance offered by the bank to the importer according to his demand upon receiving the bills under the letter of credit and the import collection items. This essay puts forward advices for the establishment of import bill advance in China after making comparative analysis of trust in English law, chattel mortgage in American law, alienation guarantee in German law in continental law system and chattel mortgage in Taiwan, China. Suggestions are provided to commercial banks for risk prevention and control . This essay also studies the impacts on chattel guarantee by the newly promulgated Property Law in China and the breakthrough and limitations of chattel guarantee in China. Suggestions are rendered for the establishment of import bill advance with chattel guarantee as the foundation. By studying the legal issues and application of import bill advance, this essay intends to explore diversified approaches of building a sound import bill advance system with legal researchers, legal practioners, commercial banks and trade financers.