Knowledge Of Import Advance Guarantee Letter

In large complete sets of equipment

The contents of the advance guarantee letter mainly include the trustor, the beneficiary and the name and address of the guaranty bank, the commitment of the bank, the effective conditions, the amount of the guarantee, the validity period, and the law of the jurisdiction.

Where to check the guarantee?

Opening a bank

A. because the guarantor of the advance payment guarantee, the bank that opens the letter of guarantee, is responsible for the first and direct payment. Therefore, we require that the bank issuing the guarantee should be the first class and reputable bank in the world. Only in this way can the buyer's interests be guaranteed.

B. the bank issuing the guarantee must have an agent relationship with the buyer's forwarding bank or correspondent bank, so that the buyer's bank can check the seal or mortgage to confirm the authenticity of the letter of guarantee.

Effective conditions

In general, letter of guarantee should be effective as soon as it is opened, but in actual business, we often receive letter of guarantee which has the conditions to become effective. For example, some letters of guarantee come into effect only when the bank has received the advance payment from the buyer or the seller has received the written confirmation from the buyer's advance payment, which is not acceptable to us.

If the guarantee fails to take effect due to various reasons (such as seller's unwritten confirmation), and if the seller fails to fulfill the obligation of delivery according to the contract, the buyer can not guarantee his interests by letter of guarantee.

The letter of guarantee loses its sense of "responsibility".

Commitment to open a bank

In a letter of guarantee, the content of a bank's undertaking is the most important. The bank's promise must be "unconditional" and "irrevocable".

"Unconditional" means that when the buyer has written the letter of guarantee in writing that the seller fails to fulfill his obligation to deliver the goods, it is required that the guarantee bank pay the amount of the guarantee letter without any other proof, and no matter what the actual reason is, the bank must immediately and unconditionally pay the amount of the guarantee.

"Irrevocable" means that a letter of guarantee can not be revoked within the prescribed period of validity after its opening.

Amount of money

The sum of general guarantee is the amount of advance payment.

However, in the case of the payment of advance payment and the longer delivery time and the larger amount of the contract, we can ask for the amount of the letter of guarantee in advance in the business negotiation, plus the interest from the advance payment to the buyer's claim, and the buyers and sellers agree in advance.

Unless otherwise stipulated in the letter of guarantee, the amount guaranteed is not reduced due to partial performance of the contract.

Term of validity

In theory, the purpose of the letter of guarantee is to prevent the seller from paying the advance payment in advance of the contract, and when the seller fulfills the obligation of delivery, the function of the guarantee is completed.

Therefore, the validity period of most Guarantee Letters from the date of opening to the date of shipment, but not exceeding the date of shipment at the latest, is in principle correct.

However, in the actual business, the author found that there are loopholes in such clauses.

The actual failure time of the A. guarantee is prior to the seller's deadline for delivery.

For a letter of guarantee for failure in China, due to the time difference, there will be more than ten hours for the American seller to ship the ship at the latest.

B. the buyer has no time to process claims.

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For a letter of guarantee at the place where the seller is at the place of failure, when the buyer is informed that the seller fails to fulfill the obligation of delivery within the latest shipping date, the time limit for the guarantee has also arrived. Due to the difference in geographical location, the buyer has no time to process the claim procedure.

Therefore, we should ask the letter of guarantee to be valid until several days after the date of shipment.

We emphasize that "working days" mainly consider holidays and holidays.

Other

If a A. guarantee is to be modified for any reason, it must first be agreed by the beneficiary and the client.

B. as a rule, a letter of guarantee is governed by the law of the place where the letter of guarantee is opened.

Since there is no uniform format for bank guarantee, we must carefully examine the receipt of the letter of guarantee. Once these problems arise, we shall immediately ask the seller to notify the bank to make changes.

Of course, in order to avoid wasting time, it is best to negotiate the basic contents, conditions and formats of the letter in advance at the stage of negotiation.