国际结算(双语)第七章：银行保函 chapter7 Guarantee.pptx

INTERNATIONAL SETTLEMENT Chapter 7 Letter of Guarantee Chapter 7 Letter of Guarantee 7.1 Definition of Letter of Guarantee 7.2 Characteristics and function of Guarantee 7.3 Parties of Letter of Guarantee 7.4 Contents of Letter of Guarantee 7.5 Basic Procedures of Letter of Guarantee 7.6 Types of Letter of Guarantee 7.7 Differences between Bank Guarantee and Documentary Letter of Credit 7.8 international customs and practice of L/G 7.1 Definition of Letter of Guarantee Definition：Letter of guarantee( L/G) is a written undertaking made by the guarantor at the request of the applicant to the beneficiary, guaranteeing that the applicant will perform obligations under the contract signed between the applicant and the beneficiary. 7.2 Characteristics and function of Guarantee 1 Characteristics of Letter of Guarantee 1）Assurable The issuing bank will assure to the beneficiary that applicant will fulfill the responsibility and obligation of the contract with its own reputation, only when the applicant breach of the contract can the beneficiary claim reimbursement on issuing bank. When the contract has been fulfilled, the guarantee will be a standby documents and will ceased to be valid at maturity date automatically. 2）Independent Letter of guarantee is issued on the ground of the basis transaction contract between the applicant and the beneficiary. Once it is issued, it will not be bound to the basic contract and constitute a independent documents, bears the independent legal effect. 3）Documentary Payment under letter of guarantee is based on the documents presented by beneficiary according to the guarantee regulation clause. It includes beneficiary’s certificate, applicant’s default declaration and other relative documents. 2 Function of Letter of Guarantee Assist the bidder to award tender Facilitate the conclusion of contract Promote the start of project Besides ，L/G can also be used to promise the quality of the project, payment of the contract, the repayment