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 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 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):

• import goods with a deferred payment term (due to the letter of guarantee the term of payment in cash can be replaced by the deferred payment term);
• due to the deferred payment term make the payment for goods without attracting credit resources;
• reduce the costs since the bank guarantee is incomparably cheaper;
• establish more trustworthy relations in cooperation with the partner.

Advantages of the guarantee for the client, seller (exporter):

• having a guarantee securing the payment liabilities of the buyer (importer) you insure yourself of the risk of non-payment by your buyer (importer);
• ensure the reimbursement of possible losses and expenses that can be caused by the failure to comply with his/her contractual obligations or by the improper compliance with therewith by the company that is the winner of the tender, performer of the works, provider of the services or supplier of the goods;
• you can act in the market with a more competitive offer in comparison with your competitors by selling (exporting) the goods with a deferred payment term;
• due to acting with a competitive offer you can provide for bigger volumes of consumption and, consequently, increase your company’s share in the market;
• bring the risks existing in the commercial transaction to the minimum.

Disbursement terms and conditions

Due to the high trust acquired by Acba bank the guarantee provided by the Bank is nowadays accepted by many foreign companies which allows to cooperate with them directly without the intermediation of another bank, which in its turn reduces the service fee for the guarantee.

Let us mention that a number of leading banks and financial organizations (CREDIT AGRICOLE CIB, COMMERZBANK AG, EBRD) have provided to the Bank with credit limits for performing transactions related to the trade financing. Thus, in all the cases when the Beneficiary requires a guarantee disbursed by a local bank or another bank, Acba bank, in cooperation with the above mentioned banks, ensures the satisfaction of the Beneficiary’s demand.

Main terms for the disbursement of the guarantee

The Bank can provide on contractual basis:

• guarantee/counter guarantee to RA resident and non-resident legal entities, economic entities, rural communities, state establishments and financial organizations acting within the RA territory;
• guarantee insured by counter guarantee to non-resident legal entities and economic entities acting out of the RA territory;

- 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:

• guarantee for participation in the tender- ensures the reimbursement of the costs of the company holding the tender when the bidder that was recognized the winner of the tender refuses to fulfill its further liabilities as a result of which there arises a necessity to hold another tender;
• guarantee for the fulfillment of the contract- ensures the due compliance with the liabilities assumed under the contract by the party fulfilling the contract towards the client;
• payment guarantee- ensures the due compliance with the payment liabilities by the buyer (importer) towards the seller (exporter);
• guarantee for the return of advance payment - ensures the reimbursement of the amount of advance payment to the buyer (importer) or to the client in case the seller (exporter) or the executor of the contract fails to comply with his/her liabilities assumed under the contract;
• quality guarantee - ensures the qualitative characteristics of the work performed /services provided/goods supplied by the contract executor or the elimination of the generated defaults in time;
• counter (indirect) guarantee- provision of a guarantee by the Bank in favor of another leading bank in execution of the provision of the guarantee by the given bank in favor of the final beneficiary at its full risk.