Guarantee not advised

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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Finance
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Guarantee not advised

Post by Finance » Wed Jan 21, 2015 8:02 pm

A guarantee is issued by a guarantor - subject to URDG 758

The guarantee is sent via MT 760 to the advising bank.

Advising bank refuses to advise to beneficiary.

Is the guarantee still valid? Or is it null and void?

Finance
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picant
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Depending on

Post by picant » Thu Jan 22, 2015 3:27 am

Hi Pal,

art 4 is clear :a guarantee is issued when it leaves the control of the guarantor.
If the beneficiary has not been informed about thiis guarantee, IMHO, the guarantee is not valid as the guarantor has not lost he control over it.
Frankly I dont understand the advising bank, but there are a lot of difficulties in respecting embargoes, KYC AML CT rules and
the bank risk.
Other comments appreciated
Ciao
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IJTUDU
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Valid

Post by IJTUDU » Sat Jan 31, 2015 5:03 pm

Guarantee will be valid because the moment guarantor transmits MT 760, guarantee leaves the control of the guarantor and it is issued. Further, URDG 754, point 4c states that- The beneficiary may present a demand from the time of issue of the guarantee or such later time or event as the guarantee provides, therefore, there is no question of guarantee is null and void.

Regards,

Isaac Tudu
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