International guarantees

Definition of International Guarantees

A financial institution issues a payment pledge on behalf of an ordering party, and this pledge may be exercised by the beneficiary via the receiving bank of the guarantee, provided the requirements established in terms of form and term are fulfilled.

Like all foreign trade transactions, international guarantees are issued through the SWIFT system, and the text of the guarantee should state that it is subject to the UNIFORM RULES FOR DEMAND GUARANTEES URDG758 issued by the International Chamber of Commerce.