leasing payments on behalf of the lessee. The trader would rely
on the proceeds of the sale of the goods to reimburse him for the
payments made to the lessor. In many cases the trader could also
be the lessor. Lessors should however be aware of ECGD's attitude
towards counter trade contracts.
(Annex A).
13
Companies are advised to approach their banks and appropriate
counter trade intermediaries at an early stage in their negotiations.
A list of banks and leasing companies who might be interested in
leasing to China is at Annex A.
14 No leasing deals involving counter-trade have yet been
considered so to an extent companies will be breaking new ground.
However Annex B lists existing counter traders who might be
interested in acting as lessors. Companies are also advised to
consult the Department of Trade's Counter Trade Information Note
which gives further details of the factors to be borne in mind
when considering this type of transaction.
HONG KONG INTERMEDIARIES
15
Companies might wish to consider using Hong Kong intermediaries
as counter trade lessors. Hong Kong has become a major gateway into
China and there are a number of organisations based there who command
trust on both sides of the border. They are also experienced in
exercising considerable ingenuity in arranging counter trade deals
and have proved adept at managing complicated transactions between
China and exporting countries. UK goods could be either sold or
leased to Hong Kong companies for on lease to China.
16
However the tax advantage to leasing (quoted in 5(a) above)
would not be available to Hong Kong lessors without UK tax liability.
Moreover, any ECGD support would relate to the UK/Hong Kong "leg"
of the transactions only (ie the sale to the lessor). The only
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