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International Bank Guarantee Template for Hong Kong

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Key Requirements PROMPT example:

International Bank Guarantee

"I need an International Bank Guarantee for a construction project in Hong Kong, where HSBC will guarantee payment of HKD 50 million to the project developer, valid until March 2025, with monthly reduction provisions based on project milestones."

Document background
The International Bank Guarantee is a crucial financial instrument used in international trade and commercial transactions where parties seek security for their contractual obligations. This document, governed by Hong Kong law, is particularly valuable in cross-border transactions where the beneficiary requires assurance of payment or performance from a reliable financial institution. The guarantee provides an independent commitment from a bank to pay a specified sum upon demand, typically used in large commercial contracts, construction projects, or international supply agreements. The document incorporates specific requirements under Hong Kong banking regulations and international banking practices (such as URDG 758), making it a robust instrument for risk mitigation in international business transactions.
Suggested Sections

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

2. Background: Context of the underlying transaction and purpose of the guarantee

3. Definitions: Definitions of key terms used in the guarantee including Guaranteed Amount, Expiry Date, and Demand requirements

4. Guarantee and Its Scope: Clear statement of the guarantee amount, currency, and the obligations being guaranteed

5. Demand Requirements: Specific procedures and requirements for making a valid demand under the guarantee

6. Payment Terms: Terms and conditions for payment, including timeline and method of payment

7. Validity Period: Duration of the guarantee, including commencement and expiry dates

8. Reduction and Release: Conditions under which the guarantee amount may be reduced or the guarantee released

9. Bank's Rights and Obligations: Specific rights and obligations of the guarantor bank

10. Transferability: Whether and under what conditions the guarantee may be transferred

11. Applicable Rules: Reference to applicable international rules (such as URDG 758)

12. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction for disputes

Optional Sections

1. Counter-Guarantee Provisions: Required when there is a counter-guarantee arrangement between banks

2. Multiple Currency Provisions: Required when the guarantee involves multiple currencies or currency conversion

3. Claim Limitations: Optional restrictions on timing or frequency of claims

4. Step-in Rights: Required when the bank has rights to step into the underlying contract

5. Assignment Provisions: Detailed provisions about assignment rights when relevant

6. Electronic Presentation: Required when electronic presentation of documents is permitted

7. Force Majeure: Extended force majeure provisions when required by specific circumstances

8. Anti-Money Laundering Compliance: Additional AML provisions when required by bank policy or regulation

Suggested Schedules

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

2. Schedule 2 - Underlying Contract Details: Details of the contract or obligation being guaranteed

3. Schedule 3 - Fee Schedule: Schedule of bank fees and charges related to the guarantee

4. Schedule 4 - Communication Details: Contact details and authorized representatives of all parties

5. Appendix A - Required Documents: List of documents required for making a valid demand

6. Appendix B - Specimen Signatures: Specimen signatures of authorized signatories

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions







































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Relevant Industries

Banking and Financial Services

International Trade

Construction and Infrastructure

Manufacturing

Energy and Resources

Telecommunications

Real Estate Development

Shipping and Logistics

Defense and Government Contracts

Engineering and Procurement

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

International Trade

Corporate Banking

Project Finance

Commercial Operations

Credit Risk

Trade Finance

Relevant Roles

Chief Financial Officer

Treasury Manager

Trade Finance Manager

Legal Counsel

Contract Manager

Risk Manager

Commercial Director

Finance Director

Project Manager

Compliance Officer

Banking Relationship Manager

International Trade Specialist

Corporate Finance Manager

General Counsel

Credit Risk Officer

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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