International guarantees

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Import

As an importer, you can find yourself in different situations when negotiating with your suppliers, which might put you in one of the following positions:

  • Your supplier requires a (Payment Guarantee) before shipping the goods or carrying out the corresponding service. This way if, on the agreed payment date, you fail to meet your payment obligation, your supplier would execute the guarantee, fulfilling the requirements established therein, and would be guaranteed to receive payment from the bank that issued the guarantee.
    You can request a Payment Guarantee to be issued if you have a Foreign Trade Facility.
    If you would like to know more about how International Guarantees work, check out our operational guide.
  • Your supplier requires an advance payment corresponding to a percentage of the invoice amount in order to begin manufacturing or to buy in goods from a third party. In this case, if you want to ensure that you can recover the amount of this advance payment in the event that your supplier does not fulfil your order, you must ask them to issue in your favour an (Advance Payment Guarantee).
    In this case, once you have agreed the terms and conditions with your supplier, the latter will undertake the relevant operation with their bank. Once the guarantee has been received, your branch will contact you and provide you with a copy of the Swift message received. You must check the terms to ensure they are in line with the conditions agreed previously with your supplier.
  • You have made a purchase abroad and you want to guarantee that your supplier meets certain requirements with regard to the goods. In this case, you will have to agree with the exporter to issue a (Performance Bond) in your favour.
    This way, if when you receive the goods, they do not comply with some of the requirements agreed in the Guarantee, you may execute the guarantee and recuperate the funds covered by it.
    In this case, once you have agreed the terms and conditions with your supplier, the latter will undertake the relevant operation with their bank. Once the guarantee has been received, your branch will contact you and provide you with a copy of the Swift message received. You must check the terms to ensure they are in line with the conditions agreed previously with your supplier.