Bank guarantees

CJSC ''Zepter Bank'' offers its customers a full range of services in the field of bank guarantees used in commerce.

A bank guarantee is an obligation of a guarantor bank (which it provides at the request of its customer, the Principal) to pay the Beneficiary an amount of money upon presentation of documents defined in the text of the guarantee (documentary guarantees) or a written demand (guarantee on demand) confirming the Principal's failure to fulfil his obligations to the Beneficiary.

A bank guarantee is additional collateral for a payment or other contractual obligations implementation. This means that if the parties to a trade transaction duly fulfil their contractual obligations, the guarantee remains unused and payment is only made when the guarantee case arises.

CJSC ''Zepter Bank'' is prepared to issue various types of guarantees to secure the performance of customers' obligations under trade contracts:

• tender guarantee is a collateral guarantee by the tender's participant for tender obligations to the customer/contractor. Such guarantee is required in public tenders and provides payment of the guaranteed sum of money in case the tender's participant withdraws his tender before the deadline for review of tenders, in case the winning tender's participant refuses to sign a contract with the customer/contractor for the supply of goods/services or provides him with a performance guarantee for the contract. As a rule, the amount of the guarantee amounts to 1-10% of the amount of the tender offer;

• guarantee of performance of contractual obligations - issued by order of the exporter of goods/services to the importer as collateral for the proper performance of the exporter's contractual obligations. The amount of the guarantee is usually 5-10% of the contract amount and is used until the Principal has fully performed the obligations covered by the guarantee;

• advance return guarantee - issued by order of the exporter of goods/services to the importer in the amount of the advance payment provided to the exporter under the contract and ensures the return of the advance payment if the exporter fails to fulfil his obligations to deliver the goods. The amount of the guarantee is automatically reduced as deliveries are made under the contract;

• payment guarantee - issued by order of the importer in favour of the exporter (supplier of goods/services) and ensures that the importer fulfils his payment obligations under the contract;

• loan return guarantee - issued by order of the borrower to the creditor and ensures that the borrower fulfils his obligations to the creditor to repay the principal debt and/or interest on the loan within the timeframe specified in the contract.

If you have any questions about documentary operations, you can contact International Settlement Division by tel. 331 88 57