You have concluded an agreement for the supply of goods with a foreign company and you continue to pay for the imported goods in cash. It means that you are paying for goods that are not received yet. Is it what a civil trade dictates?
For sure, no. The permanent and trustful cooperation between the partners presumes mutually beneficial conditions. Thus, your supplier having in his hand the guarantee of ACBA-CREDIT AGRICOLE BANK can provide a deferred payment (e.g. up to 120 days, as a result of that you can do the payment with your own resources (without a necessity to attract credit funds). Let us mention that the guarantee is incomparably cheaper than the credit.
ACBA-CREDIT AGRICOL BANK offers to apply bank guarantee.
The guarantee is the written commitment given by the bank upon the instruction of one of the parties (the Principal) in favor of a third party (the Beneficiary) that ensures the fulfillment of the Principal’s liabilities and payment of certain amount to the Beneficiary in compliance with the terms and conditions of the guarantee upon presenting a written demand.
Advantages of the guarantee for the buyer (importer):
Advantages of the guarantee for the client, seller (exporter):
1. Which is the main difference between the guarantee and the letter of credit?
- In difference to documentary letter of credit, the guarantee is used only in case the Principal did not comply with his/her liabilities towards the Beneficiary.
2. What should be the validity term of the guarantee?
- The guarantee validity term should exceed the contractual term of the final calculation so as the Beneficiary has a possibility to demand payment from the Bank in case he/she does not receive the corresponding payment from the Principal.
3. Can the validity term of the guarantee be terminated prematurely?
- The guarantee can be terminated prematurely, provided that the letter of the Beneficiary on the waiver of his rights is vested by the provided guarantee.
Disbursement terms and conditions
Main terms for the disbursement of the guarantee
The Bank can provide on contractual basis:
- The Bank disburses the guarantee/counter guarantee in favor of resident and nonresident legal entities, organizations, economic entities, state establishments and financial organizations;
- The currencies of the guarantee are AMD and foreign currency.
The Bank provides the following types of guarantees: