16.11.2007
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Guarantees
Guarantee – being the obligation of the Bank to the beneficiary, is an agreement to make a payment of the specified amount of money to the beneficiary in case of the failure of the counter-party to perform its obligations. Otherwise, it can be said that the guarantee is a written undertaking by the guaranteeing bank to make the payment upon written request and submission of other documents indicated in the guarantee.

Bank guarantees are regulated by the laws of the country at the place of location of the issuing Bank. Occasionally, Uniform Rules for Demand Guarantees (URDG) ICC Publication 458) will apply.

Bank guarantee, being independent from the main sale and purchase agreement, is designated to ensure the performance of obligations undertaken by the applicable party. Payment under guarantee is made by the guaranteeing bank upon the first written demand of the beneficiary, without any investigation (except for review of accuracy of documents submitted by the beneficiary.
Benefits of using guarantees in trade transactions:
  • Assurance as to high quality and perfect performance of conditions of the sale and purchase transaction
  • Absence of risk of the seller for non-payment for delivered goods or provided services
  • Cooperation with a reliable partner – bank and boosting of international reputation
  • Opportunity to have various problems arising in course of trade transactions or implementation of projects faster and with fewer losses when acting through the partner – bank
  • increase of number of potential partners
« Bank of Baku » is pleased to offer its customers the most popular categories of guarantees used in the international trade:
  • Bid Bond (undertaking for the performance of obligations taken by the company in course of the tender process)
  • Performance Bond (undertaking for the performance of contractual obligations)
  • Advance Payment Guarantee (undertaking for the repayment of contractual advance payment in case of failure to ship the product)
  • Payment Guarantee (undertaking for timely payment of the price of delivered goods or provided services and is, primarily, used when dealing with “open accounts”
  • Customs Guarantee (undertaking for ensuring fast customs clearance of the goods )
Please take a note of our charges related to guarantee services:
Rates related to guarantees are also applicable upon Stand-By LCs.

Type of the service

Rate of charge

(Note: rate is fixed irrespective of the currency of the transaction)

For outgoing guarantees

Opening of the guarantee

0 , 2%

min. AZN 50

Chance or cancellation of the guarantee (except for increase of the amount)

AZN 50

Increase of the amount (from the amount of increase)

0 , 2%

min AZN 50

Transfer of funds under guarantee (per transfer)

0 , 3 %

min AZN 20

min AZN 300

For incoming guarantee

Availing of the guarantee (without approval of the Bank)

0 . 1%,

min AZN 50

Availing of the guarantee (with approval of the Bank)

1.5 % per annum

min AZN 50

(for full or incomplete quarter)

Chance or cancellation of the guarantee (except for increase of the amount)

AZN 50

Increase of the amount (from the amount of increase)

0 .1 %

min AZN 50

Increase of the guarantee amount (with approval of the Bank)

1.5 % per annum

min AZN 50

( for full or incomplete quarter )

 
 

Additional information:



Please send us your queries related to this service. Approach any branch or office of the Bank or call Information center 145.

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