Hi,
Can someone pls explain the difference between Transfer and Assignment of a Guarantee under URDG 758 i.e their purpose, how they are processed, what are the prerequisites and general documentation required etc?
Regards...
Gtees
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abrar
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Transfer and Assignment under URDG
The transfer and assignment provisions under URDG is an attempt to align it with ISP98 practices. The assignment would allow the procceds of the guarantee as it becomes due, to be assigned by the beneficiary to a third party. This supposes the beneficiary remains an interested party under the guarantee, and the assignee is only entitled to receive the assignment proceeds provided there has been a breach by the guarantee applicant, and provided the beneficiary is able to submit a compliant demand. Therefore, the underlying contractual rights and obligations between the guarantee beneficiary (assignor) and the assignee may not be related to the contract between the beneficiary and the guarantee appplicant, and the assignee gains no contractual right of recourse (through the assignment) to the applicant.
With the guarantee being transferred (in full, and potentially, more than once), the transferee is allowed atual drawing rights (rather than the proceeds) citing breach by the applicant. However, unlike UCP 600 or ISP98, the transferor must provide a signed statement that the transferee has acquired the transferor’s rights and obligations in the underlying relationship.
With the guarantee being transferred (in full, and potentially, more than once), the transferee is allowed atual drawing rights (rather than the proceeds) citing breach by the applicant. However, unlike UCP 600 or ISP98, the transferor must provide a signed statement that the transferee has acquired the transferor’s rights and obligations in the underlying relationship.