Bank Guarantee

An international bank guarantee is a written undertaking ensuring that a supplier or contractor receives compensation in the event of a breach of contract. Bank guarantees are subject to Uniform Rules for Demand Guarantees (URDG), ICC Publication No. 758.

Bid bond

Also called a tender bond, is issued to ensure that the exporter submits bids under the tender process and to protect the importer from any loss that might occur if the exporter fails to sign the contract. A bid bond also assures the importer that the exporter will comply with the terms of the contracts in the event that the tender is accepted.

Performance bond

Secures the importer in the event the exporter fails to meet its contractual obligations. Obligations under a performance bond could concern supply obligations and/or quality requirements during the agreed period of the guarantee.

Advance payment

Ensures repayment to the importer of the amount of prepayment, usually an agreed percentage of the contract amount, if the exporter does not fulfill its contractual obligations.

Payment

Provides the exporter with financial security in the event the importer fails to make payment for the goods or services supplied.