Under The Credit Import Bill Advance The Legal Issues,

Import bill discount is a type of short term financing frequently used in international trade. Most domestic commercial banks carry out such business due to its expediency and efficiency. But because of its novelty, little research has been put on it and there is even less law and regulations. So it contains much risks in practice. The author tries to give some advices on preventing risks of import bill discount though analysis on the theory of trust receipt and the causes of risks arising on the basis of the concepts, the features, business procedure and the theory of operation of the import bill discount.The first chapter of this article is the overview of important bill discount system. The author give brief introduction on the concept, background and procedure of important bill discount and analyze the kind and legal character. The second chapter explains the concept of trust receipt, one of the most important concepts in the important bill system, and concludes that trust receipt is key instrument when releasing all sets of the documents to the importer against the trust receipt. By completing the above procedure, on the one hand, the importer may obtain all sets of the documents from the bank for collection and sale of the goods in its need of cash flow; on the other hand, the issuing bank may protect its own interest by virtue of the trust relationship. Obviously, the trust receipt procedure is the core of the operation of the import bill discount. However, the risks of the business of the import bill discount generally occur in such regard. The third chapter discloses the risks in the practice, including the main risk of unfulfilling of the importer and the import goods getting by third party under goodwill. The forth analyzes the reasons of the risks. Some scholars think the reasons lies in the imperfect guarantee system and wish to perfect the way of guarantee to avoid risks. But the author do not think they get the points. In fact, there are two legal acts consequently. The first act is the paying behavior, which means the bank buy the goods. The second act is the trust behavior, which means the bank trust the document as well as the ownership of the goods to importer. In brief, the important bill discount bank has the ownership and beneficiary rights instead of mortgage or pledge rights. In fact, the essential cause is that the right allocation of trust receipt is too flexible to meet the requirement of Continent Law System. So the independency of trust propertycannot be supported effectively in Continent Law System. In our practice, there is no interrelated law the regulate trust receipt in our law system, which refer much to the Continent Law System. So we have to reform the trust receipt system to keep balance between this system and other regulations. The fifth chapter gives some adviser on the protection of risk for the bank in the practice of important bill discount. First, the relationship between the bank and importer is a kind of trust relationship concerning the ownership of the import goods. Second, the bank can protect itself by mechanism of trust law. Third, the band should improve the clauses of its contract. Last, the bank should control its risks by regulating it business procedure and other means.