The Legal Risks And Precautionary Measures Of Shipping Financial Leasing For Banks

The shipping industry as capital-intensive industry, the mainly investment reflected is in ships investments. Currently, most of the world shipping enterprise companies are use ship finance investment to achieve the purpose. Among the means of shipping financial, the common use is shipping financial leasing form. Shipping financial leasing contains a ship trading and the credit funds, the surface is a leasing assets, the essence of the financing, it will mix the seller, lessor and charterers together transaction. In China, the main investment in the ship building industry is Export-Import Bank of China, and bank of credit for China’s ship building industry, "adjusting structure, promoting transformation" played a unique role. Thus, the banks, as the main provider of funds is an important shipping financial leasing for the ship be well afoot. But the bank is deficient in the shipping financial leasing expertise and credit audit manner that banks consider based on lending risk will be reduced for shipping finance loans, or at the time of the borrower cannot pay, the bank will face a huge financial crisis. To ensure that banks in the shipping financial leasing interest and therefore should be clear the bank’s risk and propose effective solutions. This article will analysis the shipping finance risks for banks, combined with the new relevant provisions of the 2015 introduction of the new "Supreme People’s Court on the seizure and auction of the ship of Laws applicable provisions", propose the risk that in the ship finance lease bank possible faced, while against the cases occurred in recent years was about the Banks suit the charterers or related subjects, even in the proceedings the banks win the lawsuit, but because of the opposite party assets is insufficient to satisfy the bank, and it also hard to recover the full amount of the loss. Thus banks need to be familiar with the relevant laws and regulations on the basis of the shipping market and sign the feasible contract with the effective preventive measures can be implemented. The content will be explicit discussion in four chapters.The first chapter start from the concept of shipping financial leasing and its legal characteristics, analysis of the legal relationship between the shipping financial leasing of the three parties of different identities and analysis the relationship between contracts. Analysis the bank identity of the shipping financial leasing, and outlined the theory of bank risk prevention.The second chapter discusses the bank due to the shipping financial leasing contract and the parties initiated the risk, from the bank to buy a new build a ship in risk, the risk of buying a used boat, and analyzed charterer credit risk in these three areas, combined with recent years related cases and the "Supreme Court of the People’s Court on the trial of a finance lease contract dispute interpret" the relevant provisions be analyzed, the bank exist main risks in different situations.The third chapter discusses the bank due to the risk of the ship itself cause in shipping financial leasing, combined with the 2015 introduction of the new "Supreme People’s Court on the seizure and auction of the ship of Laws applicable provisions" analyzes the bank was seized and the ship auction under the existence of risk situations. The risks cause by shipping financial leasing registration system is imperfect, the liability and risk caused by ship oil pollution damage, and the risks caused when wreck removal, combined with "Nairobi International Convention on the Removal of Wrecks," which entered into force in April 2015 in the relevant clause. In the fourth chapter related prevent risks systems will be pointed. The possessory lien on vessel bring the risks to banks, and due to court decisions in the exercise of the possessory lien on vessel, banks are required to take responsibilities.The fourth chapter focuses on precautionary measures of bank risk, due to the second and third chapters, from three aspects to propose viable precautionary measures. First, to avoid the risk by complete contract. Second, through the improvement of relevant laws system, against the specific risk reference Convention enters into force in international regulations or provisions of the relevant countries, and improve the relevant provision, to target the preventive measures with have feasibility. Third is to reference the relevant provisions "Convention on International Financial Leasing" to guide the bank to improve contract provisions.