Relief Measures On Legal Risks In Financing Pledged By Account Receivable

Since the Real Right Law of PRC promulgated in 2007, the pledge of Account Receivable ("AR") could have been one method of guarantee for financing. As a regulatory guideline, the Rule on Registration of the Pledge of AR was issued by the People's Bank of China. Since then, financing activities pledged by AR are booming in banking industries. However, some legal risks still exist on such activities because of some uncertain factors, such as the unclear legal definition of AR, the implementation of the pledge right of AR, and other risk raised by the nature of AR itself. One hand, most of the studies on such risk are mainly focusing on academic analysis, so that the recommended resolutions to the risk are so far away from resolving current problems. On the other hand, although other studies could recommend some practical measures on eliminating the legal risk, the recommendations on practices are not so sufficient as they failed to analyze the different legal specifications in detail and link to real works tightly. For example, some studies just focus on the process of register and public announcement, but they ignore the legal validity of pledge of varies kind of AR. Some studies fail to analyze the differentiated AR based on their specifications laid down in related regulations. Although some studies could identify these risks raised from the sales contracts and the vicious behaviors conducted by the pledger and the payer of AR, they yet fail to give a detail introduction on the key points of such risks. For the problem that we are unable to access the web site of the AR Pledge Register System for enquiry, no studies have pointed out it so far.The meaning and objectives of this thesis are to secure the bank's assets and maintain the stability of financial market through recommending and adopting practical relief measures based on thorough studies on the legal risk on financing activities pledged by AR.