International Trade Financing

Import Bill Advance

  1.1 Introduction:

  The Import Bill Advance is a kind of short-term financing granted by BANK OF KUNLUN to the importer for payment under the import L/C, import bill under collection or remittance provided that customers have submitted the relevant documents. Importers have to repay the principal and interest after they make the sales.

  1.2 Function

  Customers may also apply for RMB financing in the case of fluctuation of exchange rate to purchase foreign exchange before the sales of imported goods to mitigate the exchange rate risks.

  1.3 Target Clients

  Corporate customers who are Bank of Kunlun’s public unified credit customers or whose credit standing is AA+ are eligible for this service.

  1.4 Business Process

  1)  An applicant customer has to fill out ‘Application Form for Import Bill Advance’ and provide the import contracts and the original copy of Ocean Bill of Lading and other documents BANK OF KUNLUN considers as necessary.

  2) The International Business Department deals with the application for import bill advance and will investigate the applicants to check whether they are eligible. The International Business Department will also audit the documents and the Credit Department will also help. The payment under the import L/C will not be made until the L/C is issued.

  3) BANK OF KUNLUN reviews the application and signs the Contract for Import Bill Advance with the applicant. The applicant is required to issue a trust receipt. If the applicant is not eligible for credit condition or cannot be approved by the head office, some guarantee should be made.

  a. The payment under the import L/C or remittance should not exceed 90% of the amount of the bill/invoice.

  b. The term of Import Bill Advance under the import L/C, import bill under collection or remittance should not exceed 90 days and cannot be extended upon its maturity. If any extension is needed, a review meeting would be held by first-level branches. The negotiating bank will collect advance interest since the advance begins.

  c. For usance credit whose credit term is less than 90 days, its advance term and usance term cannot exceed 90 days. And for BANK OF KUNLUN’s public unified credit customers and AA+ customers, their term can be extended to not more than 180 days. For usance credit whose credit term is more than 90 days, no advance is allowed to be made.

  d. After signing the import bill advance contract, the international business department will record the contract and will notice the related department to make the advance on the payment day.

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