Advance payment Guarantee (reducing)

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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WARLORD9609
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Advance payment Guarantee (reducing)

Post by WARLORD9609 »

I have a very good case happening to me.

We issued advance payment guarantee amounting USD 1,000,000/-, the amount will reduce each time until it reaches zero.

Now the contractor called me saying that the amount of the guaranatee must reduce by USD 200,000, he requested to reduce the liability from our side.

I said ok no problem, but I need a letter from the beneficiary signed and stamped confirming that part of the project has finished which is amounting usd 200,000.

My question is, the beneficiary is not our client and I cant verify their signature on the reduction letter, contractor may make-up a forged letter which is easy nowadays, what are the best practices in banks nowadays to verify signature under the above scenario?

Thanks.
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picant
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Joined: Wed Aug 20, 2008 1:49 pm

legal binding

Post by picant »

Hi Pal,

assuming that beneficiary is in your Country, you may opt for an authentication by a bank or public notary, if beneficiary is located abroad you may further use Diplomatic Services or a so called Apostille, if available.
Other comments appreciated
Ciao
WARLORD9609
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Apostile

Post by WARLORD9609 »

Thanks for the reply,

1. What is apostile?
2. Beneficiary is outside my country, Beneficiary's bank not dealing with our bank whatsoever, so its hard for me to verify signature, what shall we do?

Thanks
leekaiyin55
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Advance payment Guarantee (reducing)

Post by leekaiyin55 »

Dear Pals,

Is there any disclaimer or provision nder the said BG? We'd better go through the whole BG before we can make comments and access the risks.
Nevertheless, it is good to have beneficiary's instruction through their banker by authenticated swift.

Thank you.
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picant
Posts: 1962
Joined: Wed Aug 20, 2008 1:49 pm

Apostille

Post by picant »

Hi Pals,

Visit Apostilleinfo.com for further details.

Ciao
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