Research On The Legal Issues Of The Domestic Factoirng Service Of Banks

Owing to the keen competitions among domestic commercial banks and an influx offoreign financial corporations, the domestic financial pattern has a dramatic change sothat traditional loan transaction service can’t satisfy clients’ financing demands. As alate-model comprehensive banking service, factoring business is bound to receivefrequent usage eventually according to the domestic economic development and theactual demands arise from China’s participation in international trade activities.Bank factoring service is still in its infant stage of development in China today.Therefore various aspects should continue to be researched. We should exert successfulexperiences and draw lessons from foreign countries and establish our factoring systemwith Chinese characteristics while streamline it through integrating with Chinese featuresfor the sake of bringing our domestic financial business and international trade businessinto line with international practices and even getting further development. The thesisaims to offer some suggestions for the legal issues concerning launching bank factoringservice through research in China’s bank factoring service.The thesis was divided into four sections to probe into the legal issues arise fromChina’s bank factoring service.The initial section focuses on the domestic factoring business profile, which brieflyintroduces the basic framework respectively from the aspects of the concept of factoring,classifications, legal characteristics, legal nature, the legal relationship between theparties in the factoring business and the main function of factoring. The second sectionmainly presents and evaluates some international convention and practices as well asforeign legislations related to bank factoring business which takes Germany and the U.Sas representatives. The third section brings in legislative status of factoring businessunder China’s current legal system and analyses the shortcomings existing in our bankfactoring legal system, mainly including legal blanks lied in transfer provisions onaccounts receivable in bank factoring，lack of clear definitions of bank factoringnotification principal and validity，jus contradiction between bank and the third partycaused by bank factoring business，and insufficient pointed governance on bank factoring ect. Integrated with foreign advanced relative legislative experience mentioned in thesecond section，the fourth section offers some recommendations on Chinese institution oflaw in the field of factoring from the perspectives of improving our banking factoringlegislation，clarifying the validity of future accounts receivable and prohibiting transferagreed power，figuring down bank factoring notification principal and validity，settlingjus contradiction in the bank factoring business and improving governance in bankfactoring for the purpose of promoting the development of domestic factoring business.