Letter of Credit
Letter of Credit is a written commitment for payment of a definite amount of money on spot or on a certain date in future. In such arrangement, the bank (issuing bank) issues the letter of credit to the exporter (beneficiary) according to the importer's (applicant) request and instruction; the bank makes the prior mentioned payment in a certain period of time based on the bills and documents stipulated in accordance with the terms and conditions of credit. Hua Xia Bank's L/C service includes export L/C and import L/C. Import Letter of Credit Definition According to the customer's (L/C applicant) request, Hua Xia Bank issues the assurance document to the beneficiary promising payment, acceptance, or draft negotiation for the stipulated amount and within the deadline. Applicable Clients Importer with import/export license and opened RMB or foreign currency settlement account at Hua Xia Bank. Functions and Advantages 1. Import L/C is an international settlement tool for importers in China. 2. Hua Xia Bank as the issuing bank is charged for primary payment responsibility. 3. The exporter's collection is ensured by the bank, which reduces the settlement risk in trade where the parties to the trade are not familiar to each other. 4. Customers having overall (master) credit line at Hua Xia Bank are not required to pay the full L/C issuance security deposit upon application, which reduces the occupation of working capital. In the event of fund shortage upon payment, the customer is also eligible for inward documentary bill. Service Flows 1. Application: Customer presents the L/C application and the relevant documents. In case the writing of L/C requires credit approval, the customer is also expected to complete procedures for credit approval. The customer shall also specify if it needs inward documentary bill. 2. L/C approval: Hua Xia Bank examines and approves L/C according to the relevant procedures. The approval process normally requires 1 ~ 2 banking days for customers already granted with the credit lines. 3.Issurance of L/C: Hua Xia Bank sends L/C through SWIFT after selection of advising bank according to the L/C application. 4. L/C amendment: In case the customer needs to amend the issued L/C, the customer shall present to Hua Xia Bank the L/C revision application. Hua Xia Bank sends the amendment information through cable accordingly. When the amendment increases the amount on L/C, the customer is expected to complete re-approval procedures similar to L/C application. 5. L/C document receipt: Upon receipt of overseas documents, Hua Xia Bank launches through examination and verification on the documents according to the principle of "the documents presented in accordance with the stipulations of credit ,and the documents in accordance with each other" 6. Document receipt advice: Hua Xia Bank will advise the customer of the document receipt in the same day and state if there are discrepancies on the documents. 7. Customer confirmation: The customer shall make written confirmation within the stipulated time as to its approval for payment/acceptance. In case the customer fails to reply within the stipulated deadline, the silence is deemed as payment approval. 8. Customer payment: The customer shall reserve adequate fund within the stipulated time for payment. Upon payment, the customer shall file for international balance of payment according to the regulations. In case the customer needs financing, it shall apply for inward documentary bill in advance. 9. Overseas payment/acceptance/protest (1) Payment: Hua Xia Bank makes overseas payment within the deadline and according to the overseas bank's instructions. (2) Acceptance: For Usance L/C, Hua Xia Bank issues acceptance or payment advice to the overseas bank within the deadline and makes overseas payment on due date. 10. L/C revocation In case the customer intends to revoke L/C before expiration, the customer must seek permission by the importer/exporter and the relevant banks. The bank may revoke the unused line in the L/C three months after the expiration without need for applying for revocation. Sight Credit
Sight Credit is letter of credit enabling payment collection by the beneficiary only based on sight documentary bills or documents according to the stipulations in the L/C. Its characteristics are safe and speedy fund collection for the beneficiary. Usance Credit
Usance Credit refers to arrangement where the issuing bank or its designated drawee bank does not make immediate payment upon receipt of the Usance bill presented by the beneficiary, rather, the bank makes the early acceptance or confirms its payment approval before payment upon maturity of the bill. Usance Credit Payable at Sight Usance Credit Payable at Sight refers to L/C arrangement where the bank grants financing for the importer; the importer makes forward payment whereas the exporter makes sight collection. In other words, the trade contract by and between the buyer and the seller originally stipulated sight payment, however, L/C requires the exporter to write Usance bill with the note on the L/C that the Usance bill is capable for sight negotiation, the drawee bank is responsible for discounting, and the applicant affords the discounting expenses and interest for overdue payment. Export Letter of Credit Definition Export Letter of Credit is an export financial service arrangement where Hua Xia Bank advises the customer for L/C pickup upon receipt of letter of credit, the customer is the beneficiary; the bank negotiates the L/C through verification of the documents against L/C terms and conditions. Applicable Clients Export companies with import/export license and opened settlement account in RMB or foreign currencies at Hua Xia Bank. Functions and Advantages 1. Export L/C is an international settlement tool for exporters in China. 2. The issuing bank or confirming bank (if any) is held for primary payment responsibility. The issuing bank or the confirming bank must make the payment as soon as the exporter presents documents stipulated on the letter of credit. It is backed by bank credit that effectively ensures the safe collection. It also promotes trade where the parties to the trade are not familiar to each other. 3. When the collection is certain, the exporter finds easy loans from Hua Xia Bank (such as packing loan, Outward Documentary Bill), which contributes to fund utilization. 4. Under the circumstances of the administration and control of importing nation's trade and foreign exchange, the exporter may avoid risks of import bans or foreign currency transfer limit. This is because, in these nations, imports and letter of credit is permissible only through approval by the trade and foreign exchange administration authorities. Service Flows 1. Export letter of credit notification: Upon receipt of official copy of L/C from the issuing bank, Hua Xia Bank examines the truthfulness and validity of L/C; when the L/C is acceptable, the bank compiles export L/C notification and advises the exporter of the L/C receipt. 2. Exporter delivers the documents: After the exporter shipped the goods, the exporter prepares all the relevant documents according to L/C stipulations and fills out document delivery letter of authorization under L/C. The exporter delivers the documents to Hua Xia Bank. In case the exporter needs to file for Outward Documentary Bill, it may also submit credit application at the same time. 3. Document examination and reimbursement claim: After Hua Xia Bank examines and verifies the documents, it compiles the relevant bills to claim reimbursement from the reimbursement bank. 4. Fund receipt: After receipt of payment, Hua Xia Bank deducts all the dues for the bank and credits the balance to the customer's foreign currency account or credits the customer's RMB account after foreign exchange. For trade financing, the customer needs to firstly repay Hua Xia Bank loan principal and interest. Letter of Credit/Revision Advice As the advising bank, Hua Xia Bank accepts appointment by the foreign issuing bank and takes the responsibility to advise the L/C beneficiary of the L/C issuance and L/C revision, which is done through means of cable/correspondence by the issuing bank. Negotiation Upon receipt of the entire documents under L/C presented by the exporter, Hua Xia Bank examines the documents and processes the documents for reimbursement claim. Upon fund receipt, Hua Xia Bank books the relevant fund into the customer's designated account. Electronic Advice of Discrepancy Definition In case there is discrepancy of the customer's documents, Hua Xia Bank may contact the issuing bank and advise discrepancy in the documents according to the customer request before delivering the documents. Hua Xia Bank also advises the issuing bank to contact with the importer (applicant) and verify if the importer accepts the discrepancy. The issuing bank then confirms with Hua Xia Bank. Applicable Clients Discrepancy in the documents when file for reimbursement claim on export document at Hua Xia Bank. Functions and Advantages Broad correspondent bank network for prompt contacts and responses Hua Xia Bank confirms with the overseas importer for its opinion on discrepancy, effectively avoids losses of the exporter, and facilitates exporter financing. Correspondent Reimbursement Definition This product is a special type of document delivery and reimbursement claim under export credit. Under the situation where the L/C is not capable for reimbursement claim through TT, Hua Xia Bank cables the overseas correspondent bank and provides the necessary reimbursement claim information. The overseas correspondent bank fills out draft, prints cover letter, and presents the claim letter to the reimbursement bank according to L/C stipulations. Applicable Clients It is applicable for situation where Hua Xia Bank processes export document deliver and reimbursement claim, yet the reimbursement bank is overseas and L/C does not permit reimbursement claim through TT. Functions and Advantages It accelerates the customers export bill collection and avoids errors/omissions and delay due to postal delivery in correspondent reimbursement claim.
Note: This page is for reference only, part of the business to local outlets announcement with specific provisions prevail.
Collection
Collection is a collection and payment service where the bank handles financial documents and/or commercial bills according to entrustment. Import Collection
Definition Import Collection can be classified into import documentary collection and import clean collection depending on the attached commercial bills. In practice, most of such transactions are import documentary collection. Import documentary collection refers to a means of settlement where the domestic and overseas remitting bank presents the exporter's export documents and appoints Hua Xia Bank to collect trade money from the importer, and then forward the fund to the remitting bank. From perspective of the exporter's depository bank, the service is generally called export collection; from perspective of the importer's depository bank, the service is generally called import collection. Applicable Clients Importer with import/export license and opened settlement account in RMB or foreign currency at Hua Xia Bank Functions and Advantages 1. Import collection is trade credit. 2. Easy application. 3. Low bank service fee pegged between remittance and L/C. Service Flows 1. Customer instruction: The customer instructs the exporter to appoint Hua Xia Bank as the collection bank. The customer provides the exporter the name and address of Hua Xia Bank's local branch. 2. Document receipt and verification: Upon receipt of document mailed from the overseas bank (remitting bank), Hua Xia Bank signs and registers the receipt and examines if the remitting bank instruction is clear and clean and if the documents are complete. 3. Document presentation: Hua Xia Bank compiles import collection document notification and payment authorization letter before advising the customer for payment/acceptance along with the photocopies of the documents. 4. Customer confirmation: The customer shall sign and seal on the payment authorization letter, confirm payment, acceptance, or protest, and then return the paper to Hua Xia Bank before the deadline. 5. Documents against payment (D/P): After the customer makes the payment, Hua Xia Bank delivers the original documents to the customer. Documents against acceptance (D/A): The customer shall write text of "Acceptance" on the face or back of draft and stamp the specimen signature and seal on the draft; Hua Xia Bank delivers the original documents to the customer. Free of payment: Hua Xia Bank delivers the documents directly to the payer. 6. Overseas acceptance/payment: Hua Xia Bank makes overseas acceptance or payment according to remitting bank instruction. 7. Bill return: In case the customer protests or refuses acceptance, and through negotiation, in case the remitting bank permits return or fails to reply within one month, Hua Xia Bank may return the documents to the remitting bank. Export Collection
Definition Export Collection can be classified into export documentary collection and export clean collection depending on the attached commercial bills. In practice, it generally refers to export documentary collection. Export documentary collection is service where Hua Xia Bank appoints the domestic and overseas bank to collect bill payment from the importer according to export documents presented by the exporter. Applicable Clients
Exporter with import/export license and opened settlement account in RMB or foreign currency at Hua Xia Bank Functions and Advantages 1. Export collection is trade credit. 2. Easy application. 3. Low bank service fee pegged between remittance and L/C. 4. Lower risk than credit collection. Service Flows 1. After the exporter ships the products, the exporter prepares all documents stipulated in the contract, and then presents documents with the document delivery authorization under collection to Hua Xia Bank for collection processing. 2. Hua Xia Bank exercises strict examination of content in document delivery authorization letter under collection. 3. Export document examination: Hua Xia Bank makes document-by-document examination and logic examination against the documents. In case the document is flawed, Hua Xia Bank shall cause timely consulting with the trustor for correction and supplementation on the relevant issue. In case the trustor insists the document correspondence according to original status, Hua Xia Bank shall seek written confirmation from the trustor. 4. Compile cover letter/Document processing for reimbursement claim: Hua Xia Bank logs record in international settlement system according to the document delivery authorization and compiles the export collection cover letter. The export document is mailed to the collecting bank along with cover letter. For collection through document against acceptance (D/A), and upon receipt of acceptance advice from the colleting bank, Hua Xia Bank shall advise the trustor within one banking day as of the acceptance amount and payment due date stated in the collection authorization letter. Hua Xia Bank sends payment advice to collecting bank three days before the acceptance due date as reminder to collecting bank for due payment. 5. Receipt of payment: Upon receipt of payment, Hua Xia Bank deducts all the dues for the bank and credits the balance to the customer's foreign currency account or credits the customer's RMB account after foreign exchange. Risks Involved and Preventions1. The exporter relies only on the importer's credit. Because the relationship between the exporter and the remitting bank, and between the remitting bank and collecting bank are agency relationship, the bank takes no responsibility for the collection of payment. The payment depends on trade credit. 2. Importing nation's forex and foreign trade control risk. 3. Risk attached to the goods such as price reduction, obsolescence, or violation against the regulations of the customs or the health authority. 4. Risk of importer protest. Clean Collection Definition
Clean Collection is also known as foreign currency bill collection. It is arrangement where Hua Xia Bank collects from the relevant overseas payment institution and, according to the customer's entrustment, releases the received fund on personal check, postal money order, treasury check, draft, corporate check, bank cashier's check, and other instruments denominated in foreign currency. Applicable Clients Companies and institutions, government departments, non-government organizations, and individuals Functions and Advantages Convenience, promptness, and safety Service Flows
1. The customer presents bill collection application and collection documents. 2. The administering officer examines the authorization letter and documents. 3. Endorsement, compiling collection cover letter, double checking, and mailing the documents 4. Fund receipt and booking. Risks Involved and Preventions The customers are advised to pay close attention to unfamiliar and irregular large-sum documents and large-sum documents under items of "investment", "loan", or "pledge" to prevent from defraud. Hua Xia Bank's principle is "Booking upon Receipt, No Advance Payment".
Note: This page is for reference only, part of the business to local outlets announcement with specific provisions prevail.
Remittance (Instant FX)
Definition Instant FX is the master name given to Hua Xia Bank's remittance products. The foreign currency remittance includes outward foreign currency remittance and inward foreign currency remittance. In outward foreign currency remittance, Hua Xia Bank accepts the customer's appointment and uses the appropriate payment vouchers to pay foreign currency fund to the remittee designated by the remitter through Hua Xia Bank's proprietary remittance network. In inward foreign currency remittance, the customer advises the overseas remitter as of the remittance route to Hua Xia Bank, name, address, and bank account number of the domestic remittee. Hua Xia Bank will release the fund for the customer upon receipt of the foreign currency fund. Applicable Clients
Body corporate, other organizations, or natural persons eligible for remittance Functions and Advantages
1. Promptness: The remittance receipt is completed within shortest 10 minutes and normally 3 hours from the time when Hua Xia Bank receives the fund till the time when Hua Xia Bank advises the customer of fund release. 2. Convenience: Hua Xia Bank Head Office offers 12-hour non-stop clearing and appoints specialized personnel for enquiry and tracking. 3. Flexibility: The service fee is assessed at a percentage of the remittance amount. There are also services such as full money transfer without deduction and prioritized payment service all with easy application and low service charges. 4. Safety: It relieves your concerns over the probable duplicate payment and receipt and probable overdraft, ensuring your fund's safety and legitimacy. 5. Efficiency: The account is timely transferred without occupying your fund in transit. The system automatically selects intermediary bank and carefully picks the depository bank for straight-line route of remittance and to reduce on-remittance cost. Direct Collection
Definition It is Hua Xia Bank's inward remittance product. In "Direct Collection", Hua Xia Bank advances the fund release to customer according to direct remittance from the depository bank through presetting Hua Xia Bank's branch institution codes and depository bank information. Functions and Advantages Promptness: The total time required from point when Hua Xia Bank receives fund from depository bank till point when the counter releases fund to the customer was shortened from the past T+2 to T+0 or even within 10 minutes today. No service charges: Hua Xia Bank waives service charges for Direct Collection. Applicable Clients Body corporate, other organizations, or natural persons with capacity for remittance Instant Payment
Definition
It is Hua Xia Bank's outward remittance product. In Instant Payment, the Head Office of Hua Xia Bank centrally manages the customer remittance and synchronizes clearing with the domestic and overseas depository banks. Functions and Advantages 1. Promptness: The time required for outward remittance from point when the counter of Hua Xia Bank outlet receives the customer's outward remittance fund till point when Head Office sends payment instruction to the depository bank was accelerated from T+2 in the past to T+0 or even within 10 minutes today. 2. Instant Payment enables current-day interest computation in Asia and saves customer's cost for fund in transit. Applicable Clients
Body corporate, other organizations, or natural persons eligible for remittance Multi-currency Remittance Definition It is a new remittance service. When the customer needs to remit non-USD (foreign currency) currencies, the customer may save the time and efforts in foreign exchange on forex market or in opening non-USD account, the customer may use Hua Xia Bank USD account to make payment in the desired foreign currency fund. Functions and Advantages
1. Simple application: The customer is required to present a remittance application only. 2. Simple operation: The customer avoids frustration of foreign exchange before remittance. 3. Broad coverage: Hua Xia Bank provides Multi-currency Remittance for 105 currencies in 138 nations and regions. Applicable Clients
Body corporate, other organizations, and natural persons of full civil capacity and eligible for remittance Cross-the-Strait Money Transfer Definition
Cross-the-Strait Money Transfer is a featured product of foreign currency remittance developed by Hua Xia Bank tailored for Taiwan businesses. It includes two-way money transfer of outward remittance to and inward remittance from Taiwan. Functions and Advantages 1. The total time required from point when the Head Office of Hua Xia Bank receives remittance from the accounting bank till point when the counter releases fund or from point when the counter accepts application till point when the Head Office of Hua Xia Bank remits fund to the Taiwan remittee's depository bank or the depository bank's accounting bank is only 2 hours. This is a means of rapid funding for Taiwan remittance that reduces costs on fund in transit and improves fund utilization. 2. Hua Xia Bank has established correspondent relationship with 49 banks in Taiwan and formed correspondent bank network covering the entire Taiwan Island to ensure seamless money transfer across the Straight. 3. The customer's fund may be remitted to or from Taiwan banks to ensure the rapid two-way fund transfer needs of the customer (The USD remittance is completed within a maximum of 2 hours in the morning of Beijing Time, which is before the start of value date in the US.). 4. The fund may be cleared in US dollar in regions with USD as the functional currency, or be cleared in US dollar in Hong Kong to ensure the funding before the closing of a value date. Applicable Clients Taiwan companies or individuals U.S. Dollar Full No Deduct Definition U.S. Dollar Full No Deduct (FND) refers to service where Hua Xia Bank ensures the full remittance fund collection by remittee without any deductions on the fund. When the customer files for USD outward remittance at Hua Xia Bank, Hua Xia Bank locks in the intermediary bank's deduction cost. Functions and Advantages When the customer makes overseas outward remittance, and according to the international practice, the customer faces increased remittance cost for increasing number of intermediary banks. This product locks in the cost arising during single international money transfer within USD 25, such as the consignment clearing fee of the remittance bank and depository bank, the consignment clearing fee of the receiving bank, and fund release fee of the receiving bank, to ensure the un-deducted fund received by the remittee. It assists the customer to strengthen trade partnership and reduce the customer's clients' complaints on clearing deductions. Applicable Clients Individuals and companies seeking full remittance fund receipt.
Note: This page is for reference only, part of the business to local outlets announcement with specific provisions prevail.
Hua Xia Instant Euro
Hua Xia Instant Euro
"Hua Xia Instant Euro" is an express remittance service especially for Euro remittance jointly developed by and between Hua Xia Bank and Deutsche Bank, the number one Euro clearing bank in the world. The product is catered to companies, institutional customers, and individual customers and mainly serves the business activities such as trade remittance, outbound/inbound travel, international tuition remittance, wage and salary remittance, and foreign currency payment by tourism institutions. "Hua Xia Instant Euro" service covers 74 nations and regions with Euro remittance of safety, promptness, low cost, and easy enquiry. Meanwhile, "Hua Xia Instant Euro" launched for the first time its featured service of full euro remittance with no deductions to ensure full funding for remittee. Hua Xia Instant Euro FunctionsSpeed Two-way real-time remittance, direct fund receipt, instant payment, safe and prompt Low Cost Shortened route of remittance that drives down expenses significantly Full Funding without Deductions Lock in intermediary bank deduction costs to ensure the full and un-deducted fund receipt to remittee. Wide Outlet Coverage Hua Xia Bank has set up outlets in 28 provincial capitals, municipalities directly under the Central Government, and other key cities. As the world's number one Euro settlement bank, Deutsche Bank has over 1,500 branches and outlets among 74 nations and over 2,400 banks Euro accounts to forward the remittance anywhere in the world. Route for inward remittance from overseas Amount: EUR___________________ EUR Intermediary Bank: Deutsche Bank : SWIFT BIC: DEUTDEFF Customer's Bank in China: HUA XIA BANK : SWIFT BIC: HXBKCNBJXXX Customer (beneficiary): Account Number: Name: Address: Telephone Number: Service Area of Hua Xia Instant Euro
Europe Germany, France, United Kingdom, Netherlands, Italy, Spain, Austria, Monaco, Belgium, Sweden, Norway, Finland, Portugal, Switzerland, Ireland, Luxembourg, Croatia, Czech, Poland, Romania, Israel, Russia, Greece, Hungary, Ukraine, Guernsey, Jersey North America USA, Canada South America Brazil, Argentina, Mexico, Peru, Uruguay, Chile, Columbia, Venezuela, Antilles, Cayman Islands Africa South Africa, Egypt, Mauritius, Nigeria Asia China, Hong Kong, Taiwan, Japan, Korea, Thailand, Malaysia, Vietnam, Singapore, Philippines, Indonesia, Pakistan, India, Sri Lanka, Bahrain, Iran, UAE, Turkmenistan, Kazakhstan, Turkey Oceania Australia, New Zealand
Note: This page is for reference only, part of the business to local outlets announcement with specific provisions prevail.
