Guarantees for foreign trade
In an international bank guarantee the beneficiary is domiciled abroad.
- A bank guarantee is an undertaking issued by the bank on behalf of your company in favour of the other contracting party. A guarantee granted by the bank to your company can also be considered an indication that the bank trusts your company's ability to fulfil its contractual obligations for which the bank guarantee has been issued as collateral.
- Offer your contracting party a bank guarantee issued by Nordea to secure the fulfilment of your company's Contractual obligations. This way your contracting party knows that you are a reliable cooperation partner.
- Your company can also request a bank guarantee from the other contracting party so that you can be sure that your partner is able to act as provided by the agreement. A guarantee issued by the bank provides security to your company especially when the contracting party is not well known.
- Use the bank guarantee for managing your company's foreign trading risks.
Different guarantee types
The use of on-demand undertakings payable at first demand is general in international trade. In on-demand undertakings Nordea undertakes to pay the amount of the undertaking at the first written demand of the beneficiary investigating only that the payment demand has been presented in accordance with the terms and conditions of the guarantee. The ICC Uniform Demand Guarantee Rules (URDG 758) can be applied to the undertakings. Accessory guarantees are also used to some extent. In this type of guarantee Nordea has the right to refrain from payment to the beneficiary until your company's contractual payment liability has been established.
For what purposes?
Bank guarantees can be used as collateral in several situations. Bank guarantees can be used in both import and export trading. A bank guarantee can also be issued on the basis of an official regulation or an obligation to give collateral required by legislation. Thanks to a bank guarantee it may be easier for the seller to grant you a term of payment. You may not have to pay an advance payment if you have a payment guarantee. Your company can also request a bank guarantee from the other contracting partner so that you can be sure that your partner will be able to act as provided by the agreement. Contact us to check if we can carry the foreign country and bank risk on your behalf.
Read more about international bank guarantees under Brochures and See also on this page.
Our currently valid tariff is available for viewing at all Nordea branches.
How to apply for a bank guarantee?
Obtaining a bank guarantee almost always requires a written principal agreement between your company and the other contracting party. The maximum amount of a bank guarantee must always be restricted and bank guarantees are as a rule always issued with a fixed term. Click the 'Forms' link on this page to access the bank guarantee application form. You can fill it in there and print it out. Remember to read also the general terms and conditions.
The issuance of a bank guarantee requires a credit decision at a Nordea branch.
A standby documentary credit corresponds to a bank guarantee.
A standby documentary credit standby documentary credit is demand-type collateral in the form of a a documentary credit which Nordea can issue on behalf of your company in favour of your contracting party, or which your company can have issued in its favour. A standby documentary credit can be used in several situations related to your company's foreign trading.
- Thanks to a standby documentary credit it may be easier for the seller to grant you term of payment.
- You may not have to pay an advance payment.
- Your company can also request a standby documentary credit from the other contracting party so that you can be sure that your partner will act as provided by the agreement. Contact us to check if we can carry the foreign country and bank risk on your behalf.
Advice on bank guarantees
If your company needs bank guarantees regularly, the bank can grant you a bank guarantee limit.
You can send your bank guarantee applications to us via Netbank. You can also browse your existing guarantees there.