• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.59
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• pp.159-178
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• 2013

International factoring is very useful to transfer credit risk, to promote cash flow, to collect debt and to reduce cost and expenses. However, International factoring system in china shows imperfection especially in gap of legal vacuum and its limit to be developed. Here I suggest a practical alternative for development of International factoring system in china as follow. First, legal environment in China for factoring system should be rearranged. Even law and contract law have relative clauses for factoring system there are many difficulty to be applied. It is necessary to prepare legal ground for factoring system. Second, without recourse for International factoring system should be fixed. Without recourse is the essential point for factoring system in international trade. In fact chinese factors are partially applied only for those big global companies. However International factoring system is especially useful for small-medium companies lacked of a good credit rating. It is necessary to promote special factors by combining financial organizations as it does in developed countries. Third, they need to make legal ground to prohibit unlicensed factoring companies. Forth, they need to educate usefulness of factoring system. The settlement system in China is to be developed by systematic researches and promotion for International factoring system.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.33
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• pp.29-62
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• 2007

The object of this paper is to increase in domestic use of export factoring for small and medium trading companies. Factoring involves a process where a specialized firm assumes the responsibility for the administration and collection of account receivable for its clients. It can be considered a form of short term commercial financing based on selling of trade credit at a discount, or for a prescribed fee plus interest. The youngest and smallest businesses cannot receive working capital for account receivable for export from financial companies, while larger businesses tend to have less need for factoring services. Using export factoring provide a valuable improvement to cash flow and working capital position and can possibly contribute to small business growth and development. There are several suggestions for export factoring to activate in Korea. First, the number of factoring companies need to be enlarge to activate export factoring in trade and financial policies. Second, factoring companies have to perform public relations for trading companies to inform the export factoring system and its advantages. Third, government need to support the system of export factoring with legislation and financial instruments. Forth, trading companies need to be reformed credit inquiry system in terms of expenses and methods by government This paper has attempted to emphasize on export factoring for small and medium size exporting companies and deserves more research by academics, practitioners and trade policy makers.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.43
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• pp.143-168
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• 2009

International Factoring transaction in Korea is different from that of financially advanced countries in terms of legal system and commercial and financial practices. As for the domestic factoring, Korean factors are only involved in advances often on a with recourse basis. With regard to the international factoring, Korean factors do not accommodate whole account receivables from clients (suppliers) but handle on a selective basis. Among Korean banks, KEXIM (Export and Import Bank of Korea) is sole factor for international transactions. Currently KEXIM and several foreign banks handle factoring provide factoring services with limitation to invoice discounting which is largely extended to large corporate names. Therefore this is far different from factoring in Europe and Americas designed for small exporters with non recourse advances. In respect of legal environment, receivable assignment is subject to debtor' acknowledge or approval of such assignment according to Civil Law Act. To remove the legal obstacles, Korean government have prepared new law which allows factor's own notification of assignment (and thereby reimbursement right) to debtor with some evidences.

• International Commerce and Information Review
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• v.14 no.1
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• pp.345-366
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• 2012

The country using factoring actively today is England. The history of factoring could throw back to the Middle Ages, but modern factoring was developed in colonial age of the United States and it was known throughout England in 1960s. At the beginning, it performed mercantile agent who works in local area in order to get rid of uncertainty and inconvenience of a distant trade, but it was getting developed into a today's factoring system which focusing more on financial function. The factoring is called 'account receivable financing' in the United States and it is started out as sales agent and getting developed to 'del credere agent' who guarantee the payment. The activities of factors have been expanded to not only consignment sale and payment guarantees but also advance financing service. However, at the end of the 19th century, the direct sales(direct marketing) was expanded by the development of telecommunication and transportation technology, and then the marketing service by factor was degraded, but the collection of payment and advance finance had been maintained until now and developed into today's factoring system. Especially, the establishment of Uniform Commercial Code in 1931 had formed the basis for activating factoring in the United States through preparing a legal basis of factoring. Due to changes of international trade environment, most of commercial bank in Korea have to deal with export factoring as a trade finance service and it is desirable to specialize as a financing for small and medium company.

• Korea Trade Review
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• v.41 no.3
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• pp.199-215
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• 2016

International factoring is necessary for small & medium export companies because using documentary credit has been declined and credit transaction has increased. In Korea, however, only EXIM bank supports the factoring service, apart from foreign banks. Even though the amount of international factoring has increased in Korea, factoring service is at a standstill, compared to its trade volume. Perhaps there are a few reasons but the biggest reason for the indifference to the factoring service is a lack of understanding and inadequate legal system in Korea. This paper aims to compare factoring service in Korea with that of China and Japan. And it also suggests the improvement of problems to the factoring service by analysing the examples of business practice.

• Journal of Korean Institute of Industrial Engineers
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• v.20 no.3
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• pp.3-14
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• 1994

In this study, two reliability computational algorithms which respectively utilize a factoring method are proposed for a system represented by reliability block diagram. First, vertex factoring algorithm is proposed. In this algorithm, a reliability block diagram is considered as a network graph with vertex reliabilities. Second algorithm is mainly concerned with conversion of a reliabilities block diagram into a network graph with edge reliabilities. In this algorithm, the independence of edges is preserved by eliminating replicated edges, and in computing the reliability of a converted network graph, existing edge factoring algorithm is applied. The efficiency of two algorithms are compared for example systems with respect to computing times. The results shows that the second algorithm is shown to be more efficient than the first algorithm.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.70
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• pp.21-38
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• 2016

The trend of payment terms of an international trade has been changed from letter of credit to open account. In this regard factoring has come out to support SMEs in terms of financing on a without recourse basis. However, factoring is in Korea is not workable softly due mainly to legal system affecting smooth assignment of receivables. Therefore this study suggest the following solutions : Korean Civil Law shall be modified to protect factor's position as a right creditor to debtor and protect factor's position when perfection among several creditors are incurred. However, formal modification to this end would not be easy in short run and it is suggested that a special law be established in case a commercial receivable assignment both domestic and internationally happens between seller and factor.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.12 no.20
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• pp.47-53
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• 1989

This paper presents an algorithm CAPFACT to evaluate the reliability of a capacitated two terminal network such as a communication network, a power distribution network, and a pipeline network. The network is good(working) if and only if it is possible to transmit successfully the required system capacity from one specified terminal to the other. This paper defines new Capacitated series-parallel reduction to be applied to a series-parallel structure of the network. New Capacitated factoring method is applied to a non-series-parallel structure. The method is based on the factoring theorem given by Agrawal and Barlow. According to the existing studies on the reliability evaluation of the network that the capacity is not considered, the factoring method using reduction is efficient. The CAPFACT is more efficient than Aggarwal algorithm which enumerated and combined the paths. The efficiency is proved by the result of testing the number of operations and cpu time on FORTRAN compiler of VAX-11/780 at Hanyang University.

• The Journal of Information Technology
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• v.8 no.3
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• pp.159-176
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• 2005

The Purpose of this Article is to analyze the special settlement and electronic settlement system in the international trade. First, Factoring is a fast, easy and flexible way to improve a company's cash flow and generate working capital for the company. Factoring can be short-term or part of an ongoing financing program. New companies can benefit as well, since there is no requirement for a long-term credit history. Second, Forfaiting is a method of trade financing that allows exporters to obtain cash and be free of all risks by selling their medium term receivables on a 'without recourse' basis. Forfaiting can be an alternative to export credit or insurance cover, especially for those transactions in which the export credit agency is not open to a particular country and/or bank. Third, The Bolero System is jointly financed by SWIFT(Society for World International Financial Telecommunications) which handles most of the electronic funds transfer for banks, and the Through Transport Mutual Assurance Association(the TT Club), a mutual insurance association most of whose members are drawn from the Multimodal transport industry or transport intermediaries. Fourth, TradeCard is a payment and settlement system that is an alternative to letters of crdeit. That is, TradeCard is a business-to-business e-commerce infrastructure that enables buyers and sellers to conduct and settle international trade transactions securely over the Internet.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.44
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• pp.85-107
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• 2009

L/C allows the exporter to have a bank's payment undertaking against shipping documents required by L/C. This means that the exporter can take export proceeds from a L/C issuing bank regardless of importer's payments and therefore the L/C better mitigate importer's credit risk compared to remittance and collections. Recently the use of L/C has been on down trend in line with increasing use of T/T, causing a big change of payment system. This tells that the payment method change in Korea is positive as the change also happens same in developed countries. This however gives more buyer's credit risk to exporters and therefore a systematic solution to this negative effect is required. In Korea, export credit insurance has been widely used to cover the buyer's credit risk. But the export credit insurance is limited because of lack of government's financial support and strict evaluation of buyer and exporter. Now Korea is ranked 10the largest trading country and therefore the exporters shall find another source for credit risk protection elsewhere. And as such this paper suggest International Factoring as a tool for the credit risk protection. The International Factoring gives advantages to the exporter in terms of credit protection and advances by purchasing account receivables on a without recourse basis.