国际结算双语chapter9bankguarantee重点.pptVIP

* * * * * * * * * * * * * * * * * * Letter of Guarantee Chapter 9 In bank guarantee transaction, importers and exporters enter into deal with the help of bank credit. Its difference from bank L/C is as follows; Its documents requirement is simpler than L/C and banks assume more risks in LG(=letter of guarantee). So, it is normally applied in the countries with comparatively complete credit system. 2. The applicant of L/C must be importer while the applicant of L/G can be buyer and seller, in which banks can offer guarantee for the payment of buyer and also for the performance of seller. 3. All the L/Gs are on demand while L/C can be either at sight or at tenor. In the past, American Bank Law prohibitde bankers from offering bank guarantee, taking it as unfair to use saver’s money in providing guarantee for third party. As bank guarantee is off-balance sheet transaction with relatively high margin, American bankers innovate “ standby LC”, which is LC in its forms and bank guarantee in its nature. Thus, standby LC can be either sight and at tenor, be negotiated, etc. just as in the case of L/C. But its document requirements is simple just as in the case of L/G. Definition: A bank guarantee is a written promise issued by a bank at the request of its customer, Buyer or Seller Request = apply to Banker Buyer Seller or Issue a written promise Beneficiaries undertaking to make payment to the beneficiary within the limits of a stated sum of money in the event of default by principal. Difference between L/C and L/G Letter of Guarantee Letter of Credit 1. Documents are to evidence the performance of beneficiary 1. Documents are to evidence non- performance (default) of applicant 4. Applicant is always the buyer 4. Applicants can be buyer or seller 5. Beneficiary is always the seller 5. Beneficiary can be seller or buyer 2. Document requirement is complex 2. Document requirement simple 3. Title document – transport document is important 3