Study Of The Legal Issues Of Trust Receipt

The trust receipt is generally adopted and made use of by English and American banks as a method of business financing tool. The trust receipt in the case law of the Great Britain decided that the applicant under the letters of credit held the document of title and the represented goods as the trustee of the bank, and kept the proceeds after the selling of the goods; and the bank as the consigner maintained its equity right for the goods and the proceeds thereof and at the same as the beneficiary. In the case of the applicant falls into bankruptcy, the banks have priority over others in the claim for the goods or the proceeds thereof. The system of the trust receipt has the functions of ensuring the safety of the financing credit owned by the bank consigner as well as realizing the purpose of possessing and selling the goods by the purchaser as the trustee. Therefore, it was absorbed and adopted by the banks in Mainland China as a'practice of the same trade'. However, as there has been not much understanding on the internal mechanism of the trust receipt system, many problems arises in the course of putting it into operation in the practice of importing trade financing business. Those problems remain unsettled until now. In consideration of the scarceness of the books or essays on the study of the trust receipt in our country, and seeing that the banks are keen to have some explicit guidelines, the study on the legal system of trust receipt has not only theoretical value but also important practical significance. Besides the preface and the conclusion, this article consists of four parts.Part one focuses on how the trust receipt came into being and its modern development.Part two talks about the practice of the trust receipt in Britain, America and in our country. It analyzes the problems and the deep reason involved in the financing.Part three defines the character of the trust receipt and also summaries the general feature of the trust receipt.Part four constructs the frame of the trust receipt system, and analyzes thepossibility of the frame. The trust receipt should be integrated with the legal system of our country. The part suggests that the provisions of the relevant laws should perfect the registration, banking financing practice should be reformed, and proposes the concrete construction of the trust receipt in our country.