1. Guarantees issued by order of buyers
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.
Sub-types of payment Guarantee:
- Loan repayment guarantee
- Guarantees in favour of the Authorities bodies of the Russian Federation (customs, tax and etc.)
2. Guarantees issued on the Seller’s Instructions
2.1. Bid Bond (Tender Bond)
The bid bond is a guarantee ensuring that participants in tenders fulfill their tender obligations to purchasers or contractors, namely that tender participants:
- shall not recall their bids within the bid validity;
- shall, having won the tender, sign a contract with the purchaser/contractor and provide the latter with appropriate performance security.
The amount of bond ranges from 1% to 5% оf the total value of the prospective contract.
2.2. Advance Payment Guarantee
This is a guarantee for the refund of an advance payment made under the terms of the contract in the event that the seller fails to deliver goods or perform works. 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.
2.3. Performance Bond (Performance Guarantee)
The performance bond is a guarantee securing the proper performance of the seller’s contractual obligations. It is usually up to 10% оf the total contractual value and may be decreased as obligations are performed. Such guarantee can also secure seller’s obligations within the warranty period, stated by the contract.
Stand-by Letter of Credit
The stand-by Letter of Credit is by nature an analogue of a guarantee. Payment under a stand-by Letter of Credit takes place only in case of default in performing underlying transaction.
It may be used only in cross-border deals (but not in domestic ones, on the Russian territory).
3. Guarantees in favour of the state bodies of the Russian Federation
The amount of the Bank limit for guarantees issuance is 8.5 bln RUR.
Guarantees in favour of tax authorities
UniCredit is an authorized guarantor by Ministry of Finance of the Russian Federation http://www.minfin.ru/ru/perfomance/tax_relations/policy/bankwarranty/
Guarantees in favour of Federal service for regulation of the alcohol market (Rosalcoholregulirovanie)
The amount of the Bank limit for guarantees issuance is 25.2 bln RUR.
Guarantees under Federal Law 44-FZ
UniCredit is an authorized guarantor by Ministry of Finance of the Russian Federation.