Bank guarantees are widely used in international trade as a means of guaranteeing payment.
A guarantee is a written commitment issued by one of the parties (principal) in favor of the other party of the contract (beneficiary). By means of a guarantee we undertake a commitment to pay a certain amount to the beneficiary in case of failure of the principal to duly honour its obligations to the beneficiary.
When issuing guarantees and executing transactions for servicing foreign trade we are governed by the rules designed by the International Chamber of Commerce (terms of issuance/service and types of guarantees, payment terms, etc.).
Major Terms of Issuing Guarantees:
- The main precondition is the coverage of the guarantee to be opened in your name, the coverage amount will be deposited in your special coverage account.
- The scheme of your special coverage account, interest rate accrued on the account balance and other terms will be set in a relevant agreement.
- In the event of partial availability or absence of your own funds, we will consider the issue of providing you with a line of credit.
|Issuance and/or confirmation (yearly)
|According to contract
|Amendment of terms (also, extension)
|Notification on amendment of terms
|Payment under the guarantee issued and/or confirmed by the bank
|0.15%, min. AMD 50,000
|Revocation of guarantee
Note: Apart from the chargeable amounts set by the bank's tariff rates, we will charge the amount of our actual costs.
For additional information and advice on issuance of guarantees, please turn to the bank's Head Office, Division of International and Exchange Operations.