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Performance Guarantee


A written document issued by Bank of China at the request of the customer to the owner of a contracted project or the buyer of a sales deal, guaranteeing the applicant will strictly perform the contracts.


Guarantee proper fulfillment of contractual obligations and the quality of the subject matter of contract; solve the problem of mutual mistrust between the parties, and reduce capital occupation.


1.Solve the problem of mutual mistrust between both parties of a transaction. With good reputation, Bank of China involves in the transaction and acts as a guarantor to promote smooth transaction by providing guarantee for the parties.

2.Guarantee fulfillment of contractual obligations,as well as quality of the subject matter of contract.

3.Indemnify the damaged party and penalize the defaulting party in case of breach of contract to avoid or reduce contract breaching activities, thus saving trouble and expenses arising from litigation or arbitration.


The performance guarantee fees shall be charged based on the principles and rates determined in accordance with relevant rules of Bank of China; the fees for letter of guarantee in foreign currency shall be charged in the same way as for letter of guarantee in RMB.

Target Customers

1. Contractors involved in contracted projects;

2. Suppliers involved in material procurement projects.

Application Qualifications

1.The applicant shall hold a business license of legal person that has passed the annual inspection or other valid certificates which fully prove its legal operation and scope of business;

2.The applicant shall have a loan card;

3.The applicant shall have an account opening permit and open a settlement account with Bank of China;

4.The applicant shall have the qualification to engage in relevant business (such as qualification of contracting foreign projects, construction qualification of building enterprise, etc.);

5.The applicant shall have a credit line at Bank of China, or pay full margin, or full guarantee acceptable to Bank of China.


I.Application for letter of guarantee

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

2.The applicant pays margin or submits other counter-guarantee;

3.The applicant submits primary 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 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.

Kind Reminder

1.Amendment to letter of guarantee: The clauses of the letter of guarantee can be amended on request of the guaranteed party and the beneficiary, such as extension of the validity period.

2.Payment/compensation against letter of guarantee: In case the beneficiary claims compensation within the validity period of the guarantee, the applicant should be notified in time. The payment should be made after the guaranteeing bank examines the claim documents and confirms the documents are in compliance with the claim clauses of the guarantee.

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