1. Guarantees issued on the Buyer’s Instructions
Payment Guarantee
This guarantee ensures fulfillment of the buyer’s payment
obligations as provided for in the contract. It is based on the
terms of payment under the contract and covers the risk of default
(or delay in payment) on the part of the buyer. When the guarantee
is issued in foreign exchange, legal entities residing in the
Russian Federation must for exchange control purposes make
available to the UniCredit Bank documents confirming the
legality of the foreign currency transaction, such as information
on the contract, the transaction documents, etc.
2. Guarantees issued on the Seller’s
Instructions
Down Payment Guarantee
This is a guarantee for the return of a down payment made under the
terms of the contract in the event that the seller fails to deliver
goods or perform work. The guarantee is normally enforced by
crediting the advance to the seller’s account in the guarantor
bank. The guarantee amount is decreased as the seller performs his
contractual obligations covered by the advance.
Bid Bond(Tender Bonds)
The bid bond is a
guarantee ensuring that participants in tenders fulfill their
tender obligations to clients or contractors, namely that tender
participants:
- should not recall their bids within the period of bid review;
- shall, having won the tender, sign a contract with the client/contractor and provide the latter with appropriate performance security.
The amount of the bid bond ranges from 1% to 5% îf the total value of the prospective contract.
Performance Bond (Performance
Guarantee)
The performance bond is a guarantee
securing the high-quality performance of the seller’s contractual
obligations. It is usually up to 10% îf the total contractual value
and may be decreased as work progresses.
3. Guarantee in favour of the Customs Authorities of the
Russian Federation
These guarantees are issued by UniCredit Bank at the
instruction of its clients to secure the payment of customs
charges, as well as any possible interest incurred through the
deferment (or installment-paying) of customs charges, penalties,
costs charged on goods and means of transport for the infringement
of customs regulations, and fines for delay in the payment of
customs charges.
Stand-By Letter of Credit
The stand-by letter of credit is a means to secure fulfillment of
the obligations outlined in the contract. Payment under a stand-by
letter of credit (should it mature) is by way of compensation for
any default on contractual terms and conditions. Being identical in
form to an ordinary documentary letter of credit, a stand-by letter
of credit is essentially a security to ensure that obligations
(payments, advances etc.) will be met.