Guarantees according to the guidelines of the ICC
The International Chamber of Commerce (ICC) issued first guidelines in 1992, governing guarantees payable upon demand (URDG – Uniform Rules for Demand Guarantees, ICC publication no. 458). With effect as from 1 July 2010, a revised version of these rules (ICC publication no. 758) entered into force. It takes into account market developments and experiences gained in the last years. It is expected that due to the revision, the URDG will be even broader accepted and, therefore, used more frequently.
The URDG apply if the guarantee (respectively already the underlying contract between the parties) expressly indicates that it is subject to them. Similar to the rules for documentary credits (UCP), the URDG provide for various definitions, interpretations and rules. They envisage an internationally consistent handling as possible of abstract guarantees.
The beneficiary of a guarantee subject to the URDG (ICC publication no. 758) may demand payment thereunder only by giving a qualified statement. explanation for the claim. He must declare in what respect the guaranteed party is in breach of its obligations under the underlying contract.
On 1 January 1998, the ICC also introduced the "ISP 98" (International Standby Practices), guidelines which were drawn up especially for standby letters of credit. In practice, however, standbys are issued in many cases still subject to the Uniform Customs and Practice for Documentary Credits (UCP).
The products, services, information and/or materials contained within these web pages may not be available for residents of certain jurisdictions. Please consult the sales restrictions relating to the products or services in question for further information.
© UBS 1998 - 2015. All rights reserved.