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The Advance Payment Guarantee Letter is a crucial financial instrument in Malaysian business transactions where advance payments are required. It is commonly used when a client (beneficiary) needs to make an advance payment to a contractor or supplier (principal) but requires security for such payment. The guarantee is issued by a bank, committing to repay the advance payment if the principal fails to fulfill their contractual obligations. This document type is particularly relevant in large-scale projects, international trade, and construction contracts where substantial advance payments are common practice. The guarantee must comply with Malaysian banking regulations, including the Financial Services Act 2013 and relevant Central Bank guidelines. It typically specifies the guaranteed amount, validity period, conditions for calling the guarantee, and claim procedures. For international transactions, it may involve counter-guarantees from foreign banks while maintaining compliance with Malaysian law.

1. Letter Header and Date: Bank's letterhead, reference number, and date of issuance

2. Addressee Details: Beneficiary's full name and address

3. Reference to Principal Contract: Details of the main contract between the applicant and beneficiary, including contract reference number and date

4. Guarantee Amount: The specific sum guaranteed, both in figures and words

5. Purpose of Guarantee: Clear statement that this is an advance payment guarantee and its specific purpose

6. Terms of Payment: Conditions under which the bank will make payment upon demand

7. Validity Period: Start and end dates of the guarantee

8. Claim Procedure: Process and requirements for making a claim under the guarantee

9. Governing Law and Jurisdiction: Specification of Malaysian law and relevant jurisdiction

10. Bank's Signature and Stamp: Authorized signatories' details and bank's official stamp