Bank guarantees for government contracts

Course Objectives:

At the end of the course, participants will be able to:

• Determining the nature and characteristics of bank guarantees provided to the government sector, and the importance of this letter to its customers.
• Definition of types of letters of guarantee.
• Acquiring the specific rules for the obligations of the parties to the bank guarantee letter.
• Acquisition of the skill of how to letter of guarantee.

Course outline:

Types of letters of guarantee

• - Letter of guarantee in terms of format?
• - Warranty at the first request.
• Documentary guarantee.
• - Warranty at the first justified request.
• - Letter of guarantee in terms of purpose.
• Letter of guarantee of bids and tenders.
• Primary or temporary letters of guarantee.
• A letter of final guarantee or a guarantee of good performance.
• Advance payment guarantee letter.
• Shipping guarantee letters.
• Customs letters of guarantee.
• - Letters of guarantee in terms of cover.
• - Letters of guarantee in terms of the issuing bank.

The relationship of the guarantor bank to the client matter

• What is the relationship between the customer and the bank?
• Obligations arising from the contract of opening credit by guarantee.
• Bank's obligations towards the customer.
• The bank's obligation to provide advice to the customer.
• Obligation to issue the bank pledge.
• Obligation to notify the customer before payment.
• Obligation to pay the value of the letter of guarantee.
• Obligation to return the cover in case of non-fulfillment.
• Customer obligations towards the bank.
• Obligation to cover the letter of guarantee.
• Commitment to pay commissions and interest.
• - The customer's commitment not to object to the payment.
• Obligation to pay the value of the letter of guarantee.

The bank's relationship with the beneficiary

• Adapting the relationship between the bank and the beneficiary.
• Execution request.
• - The effect of the principle of independence on the relationship of the guarantor bank with the beneficiary.
• The impermissibility of adhering to the defenses derived from the original relationship.
• - Failure to adhere to the defenses derived from the customer's relationship with the bank.
• - The bank's adherence to the defenses arising from its relationship with the same beneficiary.
• - Customer-beneficiary relationship.
• What is the relationship between the client and the beneficiary?
• - Extent of the impact of the difficulty of implementing the base contract on the letter of guarantee.

Execution of the letter of guarantee

• - The expiry of the letter of guarantee for fulfillment.
• - Procedures for submitting a claim for fulfillment.
• - The parties that have the capacity to submit the claim for fulfillment.
• The formality of the claim.
• Simple claim.
• Restricted claim.
• Claims restricted to submitting documents.
• Expiration of the letter of guarantee without fulfillment.
• - Expiration of the term of the letter of guarantee.
• The expiration date of the letter of guarantee.
• - The impossibility of the customer fulfilling his obligations.
• - Exoneration.

Terms of the letter of guarantee

• What are letters of guarantee and their importance?
• What are letters of guarantee?
• Definition of letter of guarantee.
• Characteristics of the letter of guarantee.
• - The independence of the bank's commitment.
• - The letter of guarantee is based on personal consideration.
• - The bank's commitment to fulfill within the specified period.
• - Immediate undertaking of the guarantee.
• The importance of a letter of guarantee.
• The importance of the letter of guarantee for the customer (the order).
• The importance of the letter of guarantee for the beneficiary.
• The importance of the letter of guarantee for the bank.
• Distinguishing the letter of guarantee from some similar systems.
• Letter of guarantee and guarantee.
• Letter of guarantee and documentary credit.
• Letter of guarantee and deputation (agency).