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In the process of handling factoring business, commercial banks have not substantially reviewed the basic legal relationship of the factoring contract. Can the guarantor claim exemption based on this? -- Answers to Several Difficult Issues Concerning Foreign-related Commercial Trials (Part Two) (9)

by Ningbo Intermediate Court

September 12, 2023

Answer: According to Article 14 of theInterim Measures for the Management of Factoring Business of Commercial Banks, when accepting factoring financing business, commercial banks should strictly
review the credit, business and financial status of the seller and/or buyer, analyze the accounts receivable situation of the proposed factoring financing, including whether it is pledged, transferred, and aging structure, and reasonably judge the buyer's willingness to pay, payment ability, and the seller's repurchase ability, Review the authenticity and legality of sales contracts and other materials; For accounts receivable arising from providing services, undertaking projects, or other non-sales of goods, or accounts receivable where the buyer and seller are affiliated enterprises, the
authenticity of the transaction background and pricing rationality should be strictly reviewed. Therefore, commercial banks have a substantive review obligation, and failure to fulfill corresponding obligations is a clear fault, but this fault does not necessarily lead to the guarantor's exemption from liability. If it can be determined based on the specific circumstances of the case that the creditor has fraudulent intent to obtain security, the guarantor may handle it in accordance with Article 30 of the Guarantee Law of the Republic of China or Article 40 of the Interpretation of the Supreme Court on Several Issues Concerning the Application of the Guarantee Law of the Republic of China.