Introduction
The Export Bill Purchase is a kind of short-term financing where customers sell the full set of export documents to BANK OF KUNLUN which will in turn pay customers the face value minus the interest as well as any charges incurred during the date of purchase to the predicted date of receiving payment. The Export Bills Purchase can be L/C, export collection D/P, and export collection D/A.
BANK OF KUNLUN will collect payment per L/Cs or contracts, and will repay the principal and interest. If the collection amount cannot be used to pay back all the principal and interest, BANK OF KUNLUN has the right to collect payment for principal and the overdue interest.
Function
Exporters can obtain payment under L/C, export collection D/P, and export collection D/A so they can get money before the importer makes payment, gaining faster turnover of funds and avoiding foreign exchange risks.
Target Clients
Premium corporate customers with import and export rights and with credit line in bank of Kunlun.
Business Process
1) The customer completes the Application for Export Bill Purchase and submits:
a. export contract executed with the foreign importer
b. permit/license for export
c. the original L/C issued by a foreign bank and the full set of export documents,
d. other documents required by ABC.
2) International Business Department reviews the application and signs the Contract for Export Bill Purchase before releasing the proceeds.
The review covers concerns as follows：
a. whether the issuing bank or the collecting bank is BANK OF KUNLUN’s agent bank and whether it has credit line at BANK OF KUNLUN
b. whether the exported goods are in the export control catalog
c. whether the term is compatible with international practice and if there is a chance that the second beneficiary under transferable L/Cs will be denied by the negotiating bank; whether L/Cs and bills, bills and bills can match
d. whether the full set of export documents are sent by BANK OF KUNLUN
3) The handling bank will review and approve exporters’ application within their credit line limit.
4) After authorized persons review and approve, the customer department will sign Export Bill Purchase Contract with the applicant and make the payment. The amount will be calculated by deducting interest, estimated foreign chargeback, surcharges and postage etc.
The interest amount= Bill Amount*Estimated Negotiation Days*Interest Rate/360
The export collection amount cannot exceed 80% the amount of invoice and the amount under export collection D/A cannot exceed 90% the compensation amount of the insurance policy. The collection cannot last for more than 90 days.
5) International Business Department has the responsibility to process documents.
6) The collection amount will be used to pay the export bill purchase, if the payment is not made on time, exporters will be expected to pay according to the Contract.