Advance Payment Guarantee

A written  warranty  issued by Bank of China at the request of a Customer  in favour of the owner of a contracted construction or the buyer of a sales deal, guaranteeing the applicant will fulfill the contractual obligations after the construction owner or the buyer makes advance payment.

Warrant the repayment of the advance payment paid by the construction owner or the buyer to the applicant in the event of non-fulfilment of the contract, so that can facilitate the receipt of advance payment   as well as to speed up capital turnover during project construction and preparation-of-goods period.

1. Mediate the issue of mutual mistrust between both parties of a transaction. Bank of China who has good reputation acts as a guarantor to warranty the repayment of the advance payment paid by the construction owner or the buyer in the event of non-fulfilment of the contract.
2. Guarantee fulfillment of contractual obligations.
3. Indemnify the damaged party and penalize the defaulting party in case of breach of contract to avoid and reduce contract breaching activities, thus saving trouble and expenses arising from litigation or arbitration.

1. Contractors  involved in constructed projects;
2. Suppliers involved in material and services procurement projects;

I. Application for letter of guarantee

1. The applicant fills out an application form for issuance of a letter of guarantee;

2. The applicant provides  margin deposit or submit other counter-guarantee;

3. The applicant submits copy of contract agreement or any supporting documents related to the contract;

4. The applicant submits other documents necessary for issuance of a letter of guarantee as required by Bank of China.
 

II. Examination and issuance of letter of guarantee

1. Bank of China examines the customer qualification, underlying transaction and relevant documents;

2. Bank of China confirms the customer's margin deposit or credit line and other mortgages;

3. Bank of China examines the written application and form of letter of guarantee;

4. Bank of China issues the letter of guarantee accordingly.