What is International Guarantees?

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A bank guarantee is defined as a binding obligation from where the bank undertakes responsibility to make a payment to the beneficiary if the applicant fails to perform a contractual obligation.
In a world where distance between continents seems to decrease proportionally with the increase in international trading, the need for flexible instruments to handle changing conditions is inevitable. For these purposes, the guarantee is a reliable tool well suited for dynamic interactions in payment and financing. DNB has great expertise and experience in issuing a large specter of guarantees using both DNB standard texts and URDG standard texts, in addition to individual texts made for one particular underlying contract.
 
Guarantees are one of many alternative choices in the broad variety of trade finance instruments and in contrast to a documentary credit or a letter of credit, that is considered a method of payment, the guarantee serves only as a security instrument for the involved parties.

Direct guarantees and indirect guarantees

The most common way to issue a guarantee is by far the direct guarantee and is issued by the bank on behalf of the principal in favor of the beneficiary.

Occasionally an indirect guarantee may be stipulated as a condition in the underlying contract. In this arrangement the bank originally issuing the guarantee (the instructing bank) instructs a local bank to issue the guarantee in favor of the beneficiary in return for a counter-guarantee.  Under these circumstances, the instructing bank is obligated to hold the local bank free from all risks and responsibility in case of claim under the guarantee.

Different types of guarantees

Tender/Bid guarantee
Tender/Bid guarantee
Advance payment guarantee
Advance payment guarantee
Performance guarantee
Performance guarantee
Payment guarantee
Payment guarantee
Warranty guarantee
Warranty guarantee
Loan guarantee/ financial guarantee
Loan guarantee/ financial guarantee
More information

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Contact International Guarantees
Customer service on
+47 95091078

You may also call our Corporate Customer Service on (+47 915) 04800.