Advance Payment 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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Advance Payment Guarantee

Post by LBB » Sat Feb 18, 2012 12:02 am

Dear all, I'm happy to join your professional forum!
I have one question concerning an advance payment gtee. I have read almoast all the samples available but can not find the specific wording I am interested in.
the case is:
the beneficiary requires an advance payment gtee for USD 100.000. but wants to make advance payments partially, by installments. therefore the bnf wants to be secure and requires the following clause incorporated into the guarantee wording: in case of partial advance payments effected into the principal's account held at bank A under the reference to the contract and guarantee, the guarantee will come into force only for those amounts transferred to the principla's account.

for example if bnf advances 80k instead of 100, he wants to have repayment for those 80k. not to lose the advanced amount. he may not transfer the rest 20 at all, or he may make advances partially, not the whole amount at once.

how to formulate this wording in more clear way? :) thanks :ymblushing: :x

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Advacne Payment Guarantee governed by installments

Post by leekaiyin55 » Thu Mar 01, 2012 3:05 pm

Dear LBB

Here is my suggestion if it might suit your needs.

The available amount claim under this guarantee takes effect upon the corresponding amount remitted by the beneficiary into the applicant’s account with you, (the guarantor), quoting advance payment under this guarantee reference, which is conclusive evidence of the said advance payment effected. The maximum available amount claim, however, can in no event be more than the guarantee amount of xxxxx.

(Reason: As the amount remitted is throught he guarantor, the BG issuing bank, it should have the records to do the verification in case of need)

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