Counter Guarantee

With the introduction of Uniform Rules for Documentary Guarantee or URDG 758, the rules for Documentary Guarantee seem to be popular again. It can be imagined from the increasing number of questions that have popped up in recent days. Documentary Guarantee Forum is an effort to develop a platform to discuss these questions.
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ahmed323
Posts: 10
Joined: Mon Oct 31, 2011 11:37 am
First Name: Ahmed
Last Name: S Aziz
Organization: GIB
Filter: Two Plus Two =: 4
Location: Bahrain

Counter Guarantee

Post by ahmed323 »

Dears,

Would anyone of you just confirm in case if bank (A) has given a counter-guarantee to Bank (B) but at time returning the original guarantee by the beneficiary to bank (B) the said bank failed to inform bank about this on time, Consequently after about two weeks
bank (B) inform bank (A) that ...(ORIGINAL LG HAS RECEIVED FOR CANCELLATION ON ....... (ACTUAL TIME OF RECEIVING I.E. TWO WEEKS AGO)

The question is bank (A) consider the cancellation from the date of reciving the notification or the date of returning the original LG to bank |(B). this for uditting and calculate the last commission the the said LG.
ahmed323
Posts: 10
Joined: Mon Oct 31, 2011 11:37 am
First Name: Ahmed
Last Name: S Aziz
Organization: GIB
Filter: Two Plus Two =: 4
Location: Bahrain

Counter Guarantee

Post by ahmed323 »

DEARS

Is there any one of you came cross an issues such as below ,

Kindly advise your comments.

Best regards
Ahmed
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picant
Posts: 1963
Joined: Wed Aug 20, 2008 1:49 pm

In my opinion...

Post by picant »

Hi Pal,

Naturally in the guarantee wording must be included such action by the bank you use. Than if it is only question of commissions and auditing i think that cmmissions are not calculated day by day, so you have to speak with your customer, for the risk I think you have to reduce it only against an official authorization by the correspondent bank. Next time choose another bank:
Other comments appreciated
Ciao
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