Introduction

The international letter of guarantee is divided into financing cross-border letter of guarantee and non-financing cross-border letter of guarantee. It is the written promise made by the Bank to the beneficiary upon requirements of the applicant to guarantee that the applicant or the guaranteed person fulfills obligations in the contract signed with the beneficiary.

The financing cross-border letter of guarantee refers to the written promise made by the Bank, as the guarantor, to the beneficiary upon the application of the guaranteed person or counter guarantor in form of letter of guarantee or standby letters of credit. When the guaranteed person fails to fulfill the obligation under financing transaction in line with the contract, the Bank will fulfill the responsibilities for compensation or payment. The guarantee upon application of the counter guarantor is only applicable to business of financing cross-border letter of guarantee (standby letters of credit) under the overseas loan under domestic guarantee.

The non-financing cross-border letter of guarantee refers to the written promise made by the Bank, as the guarantor, to the beneficiary upon the application of the guaranteed person in form of letter of guarantee or standby letters of credit. When the guaranteed person fails to fulfill the obligation under non-financing transaction in line with the contract, the Bank will fulfill the responsibilities for compensation or payment.