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Advance Payment Guarantees are essential financial instruments used in commercial transactions where significant upfront payments are required. These guarantees, when governed by Swiss law, provide a secure and internationally recognized mechanism for protecting advance payments in business transactions. The document is typically used when a buyer needs to make substantial advance payments to a supplier or contractor but requires security against non-performance or default. The guarantee is usually issued by a Swiss bank or financial institution and follows the strict requirements of Swiss banking laws and the Swiss Code of Obligations. The document specifies the guaranteed amount, validity period, conditions for demand, and payment terms. Advance Payment Guarantees are particularly crucial in international trade, construction projects, and large-scale procurement contracts, where they facilitate commerce by providing financial security while maintaining compliance with Swiss regulatory requirements.
