On Leagal Issue Of Intenational Factoring

International Factoring as a kind of comprehensive financial service, which can effectively solve the problems of the debt risk and the trade credit fund occupation brought from the current buyer’s market environment, has great prospects for development. However, on the one hand, our international factoring business starts late, and we don’t have specific legal regime to regulate it; on the other hand, its financing, account management, collect accounts receivable, credit risk and bad aspects of the security services may bring the parties legal risks. Therefore, It is necessary to perfect our country’s legal system of international factoring. And this paper is trying to make a in-depth discussion on the legal issues of international factoring, and analyze the international factoring legal risk, in order to the improve the system of international factoring.This paper is divided into five parts:The first part is the analysis of international factoring. Through the introduction of the international factoring’s origin and characteristics, the paper shows the necessary of international factoring business. Its presence is not only to meet the current needs of the international market but also to adapt to the needs of international trade development. Then, the discussions of the international factoring financing, account management, accounts receivable collection, credit risk and bad debt guarantee have shown the operation of the entire process of international factoring business. Finally, after having summarized the current international factoring business types, this paper explores the relevant issues of international factoring from an view of the characteristics of the most widely used international factoring in the international trade.The second part is to define the legal basis of international factoring. At present, there is no unified understanding of the legal basis of international factoring. There are three kinds of views, which are the principal agency theory, the said of creditor’s pledge rights and the said of creditor’s transfer rights. Whether it is the principal agent or the said of creditor’s pledge rights, its existence has certain rationality, but throughout the entire operation of the international factoring business process, can only summarize a certain aspect of a service. In contrast, although the said of creditor’s transfer rights also can’t cover the whole function of international factoring, but it could include international factoring accounts receivable collection, credit risks, bad debt guarantees and the function of financial management. Hence, we define the legal basis of international factoring as the said of the creditor’s transfer rights.The third part is the research of the legal relationship among all international factoring parties. This part mainly discusses the rights and duties of four parties: the international factoring suppliers, the debtor, export factoring business, and import factoring business. The relationship between the supplier in international factoring and export factor is the most important in international factoring, This part will focus on the rights and obligations of the two, which is established on the basis of export factoring agreement relations, in order to provide the theoretical foundation for the thesis of the international factoring parties’ legal risks.The forth part is to discuss the legal risk of international factoring, mainly from two aspects: the regime and the parties’ risks. From article 79, article 80 in the Contract Law and the multiple transfer of accounts receivable in practice, this paper discusses the international factoring legal effect of creditor’s transfer rights in the future, the validity of the creditor’s transfer rights and the notice of assignment, and the legal risks of the multiple transfer accounts receivable. The risk is based on international factoring parties’ legal relationship which discussed in the third part. Each party to perform its obligations in the process has some possible risks, they include: reduction or withdrawal of the supplier’s credit limit, the line of credit default risk and the performance of risk; The debtor notice can’t exercising, the exercise of the right of set off and the risk of the performance defects after payment; export factoring business off-take illegal, the limit of the contract creditor’s transfer rights and the risk of the Law of Conflict; the legal risk of import factor’ malicious debts and false business disputes, etc.The last part is the improvement of the system of international factoring, which is the core of this article. At first, this part is to perfect our country’s factoring laws and regulations, from the perspective of the improvement of the system of creditor’s transfer rights and the notice of assignment, the determine of creditor’s transfer rights in the future, and the legal effect of creditor’s rights. Secondly, the part permits that the development of the content of the contract, the improvement of the factoring business qualification admittance system, and the cooperation of the factor and the credit insurance company can be used to regulate the behavior of the principal part of the factoring business. The last but not the least, this article wants to strengthen the supervision on the parties and thus improve the international factoring legal regulation, through the establishment of the international factoring legal system and its supervision system. In a word, it is earnestly hoped that this paper can make a contribution to the perfection of the legal system of the international factoring in China.