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International Bank Guarantee for United Arab Emirates

International Bank Guarantee Template for United Arab Emirates

This document template provides a comprehensive framework for issuing bank guarantees under UAE law while incorporating international banking practices. It addresses the key requirements of UAE banking regulations, including Central Bank guidelines and the UAE Commercial Code, while ensuring compatibility with international standards such as the ICC Uniform Rules for Demand Guarantees (URDG 758). The document establishes the rights and obligations of all parties involved, including specific provisions for demand procedures, payment terms, and dispute resolution mechanisms in accordance with UAE jurisdiction.

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International Bank Guarantee

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What is a International Bank Guarantee?

The International Bank Guarantee is a crucial financial instrument used in international business transactions where one party seeks financial security from another. This document is particularly relevant in the UAE context, where it must comply with UAE Federal Law No. 18 of 1993 (Commercial Code) and UAE Central Bank regulations while maintaining international banking standards. The guarantee provides assurance to the beneficiary that a specified sum will be paid upon demand if certain conditions are met, typically used in construction projects, international trade, or large commercial transactions. The document includes detailed provisions for the guarantee's issuance, enforcement, and expiry, along with specific requirements for claims and payments. It's structured to protect all parties' interests while ensuring enforceability under UAE law and alignment with international banking practices.

What sections should be included in a International Bank Guarantee?

1. Parties: Identification of the Guarantor Bank, the Beneficiary, and the Principal/Applicant

2. Background: Context of the underlying transaction or obligation that necessitates the bank guarantee

3. Definitions: Key terms used throughout the guarantee document

4. Guarantee Amount: Specification of the maximum guaranteed sum and currency

5. Scope of Guarantee: Clear description of the obligations being guaranteed and the nature of the guarantee

6. Duration and Validity: Effective date, expiry date, and any automatic extension provisions

7. Demand Requirements: Procedure and conditions for making a claim under the guarantee

8. Payment Terms: Timeline and method of payment upon valid demand

9. Reduction Provisions: Conditions and process for reducing the guarantee amount if applicable

10. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant jurisdiction for disputes

11. Notices: Communication methods and contact details for all parties

12. Assignment Restrictions: Provisions regarding transferability of the guarantee

What sections are optional to include in a International Bank Guarantee?

1. Counter-Guarantee Provisions: Required when there is a counter-guarantee from another bank

2. Language Precedence: Needed when the guarantee is issued in multiple languages

3. Electronic Presentation: Include when electronic submission of documents is permitted

4. Force Majeure: Optional clause defining events beyond control and their impact

5. Partial Drawings: Include when multiple partial claims are permitted

6. Sanctions Clause: Required for international guarantees involving sanctioned countries or entities

7. Anti-Money Laundering Compliance: Include for high-value guarantees or when required by bank policy

What schedules should be included in a International Bank Guarantee?

1. Schedule 1 - Form of Demand: Template for making a claim under the guarantee

2. Schedule 2 - Supporting Documents: List of required documents to accompany any demand

3. Schedule 3 - Fee Schedule: Details of bank charges and fees applicable

4. Appendix A - Underlying Contract Reference: Key details of the underlying contract being guaranteed

5. Appendix B - Authentication Procedure: Security procedures for verifying demands and communications

6. Appendix C - Authorized Signatories: List of persons authorized to act on behalf of each party

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use
Relevant legal definitions



































Clauses






























Relevant Industries

Banking and Financial Services

International Trade

Construction and Infrastructure

Manufacturing

Energy and Utilities

Real Estate Development

Telecommunications

Transportation and Logistics

Government and Public Sector

Defense and Security

Relevant Teams

Legal

Finance

Treasury

Trade Finance

Compliance

Risk Management

Commercial Operations

Project Management

Banking Operations

International Business

Credit Risk

Corporate Governance

Relevant Roles

Chief Financial Officer

Treasury Manager

Trade Finance Manager

Legal Counsel

Compliance Officer

Risk Manager

Project Finance Director

Commercial Director

Contract Manager

Banking Operations Manager

Credit Risk Officer

International Business Development Manager

Finance Director

Company Secretary

Senior Bank Relationship Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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