| Factoring is an integrated financial service in international business between two parties from different countries or regions that combines loans and advance payments, maintenance of accounts (ledger keeping) relating to the A/R, collection of receivables, protection against default in payment by the buyers. It has become a new method of international settlement following L/C, D/P and so on. In the past three decades, the competition in international trade has become fiercer and fiercer, which form the international buyer's market. In order to expand their sales, exporters have to offer more "buyer friendly" terms that means open account or at least D/A terms. International factoring is an essentially comprehensive financial tool designed for sales based on such terms. It can relieve exporters much of the time-consuming administrative burden of approving credit and collecting export sales, which lets exporters safely offer their foreign customers competitive open account terms. Under such circumstance, International factoring has become more and more popular all of world, and has expanded rapidly over the past thirty years. Factoring is rapidly becoming the modern business tool for growing companies.Meanwhile, we can fine many relevant problems, such as the imbalance among different countries and the imbalance between the inside and outside factoring, especially the legal problems. International factoring involves several parties such as exporters, importers and factors, among who exist complex relationships involving each party's rights and duties. The core of international factoring is account receivables assignment, which is easy to bring many legal issues. The resolution of these problems needs to deal with different country's regulations on law of obligation, guarantee law, bankruptcy law, etc. All of these show the complexity of the legal issues in international factoring and the significance of its study.However, in China, it only has about fifteen years' history and experienced a slow development. Many people in international trade and finance don't familiar with it. This kind of situation shows China lags far behind in international factoring, which makes us can't keep up with the world trade developing pace. Therefore, it's urgent for China to quicken the establishment and employment of international factoring.This paper is composed of four chapters. After detailed introduce of international factoring, the paper mainly deals with the legal issues on it, and out forward some suggestions about our country. The first chapter is to introduce the basic knowledge of international factoring such as its concept, characteristics and the different operating systems. In the same time, international factoring is compared the other trade settlement methods. Second part mainly discusses international factoring law, and studies the legal relationship among parties involved, and the resolution of these problems which need to deal with different country's regulations on law. So this chapter introduces something about UNIDROIT CONVENTION ON INTERNATIONAL FACTORTNG and FCI. And it mainly deals with the legal issues on account receivables assignment that is the core of the whole international factoring. And other problems around this core are discussed. At the same time, it analyses complex relationships involving each party's rights and duties. The third chapter discusses the risk existing in international factoring and risk control. The fourth chapter, that is the last chapter, is some suggestions. On the basic of the theory, some suggestions on our future development of international factoring are given in the last chapter. |
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