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Indirect Bank Guarantee
"I need an Indirect Bank Guarantee template under Saudi law for a construction project, where ABC International Bank will instruct Saudi National Bank to issue a guarantee of 5 million SAR to the Ministry of Housing, with the guarantee period running until March 15, 2025."
1. Parties: Identifies all parties: the instructing bank, the issuing bank, and the beneficiary
2. Background: Explains the context of the guarantee, including the underlying transaction and the relationship between parties
3. Definitions: Defines key terms used throughout the guarantee document
4. Guarantee Amount and Currency: Specifies the maximum amount of the guarantee and the currency of payment
5. Scope of Guarantee: Details the specific obligations or performance being guaranteed
6. Duration and Validity: Specifies the effective date, expiry date, and any automatic extension provisions
7. Demand Requirements: Sets out the process and requirements for making a valid demand under the guarantee
8. Payment Terms: Specifies the payment process, timing, and conditions for honoring the guarantee
9. Counter-Indemnity: Details the instructing bank's obligation to indemnify the issuing bank
10. Compliance Requirements: Outlines compliance with Sharia principles and SAMA regulations
11. Governing Law and Jurisdiction: Specifies Saudi Arabian law as governing law and relevant courts
12. Notices: Details how formal communications between parties should be made
1. Language Provisions: Required when the guarantee is issued in multiple languages, specifying which version prevails
2. Transfer and Assignment: Include when the guarantee needs to be transferable or assignable
3. Partial Drawings: Include when multiple partial demands are permitted under the guarantee
4. Force Majeure: Include when specific force majeure provisions are required beyond standard law
5. Tax Provisions: Include when specific tax implications need to be addressed
6. Anti-Money Laundering Provisions: Include when enhanced AML compliance requirements are needed
7. Dispute Resolution: Include when specific arbitration or mediation procedures are preferred over court jurisdiction
1. Schedule 1 - Form of Demand: Standard template for making a demand under the guarantee
2. Schedule 2 - Fee Schedule: Details of all fees, charges, and commission rates
3. Schedule 3 - Documentation Requirements: List of required supporting documents for demands
4. Schedule 4 - Communication Procedures: Detailed procedures for communications between banks
5. Appendix A - Specimen Signatures: Authorized signatures for all parties
6. Appendix B - SAMA Compliance Checklist: Checklist ensuring compliance with SAMA regulations
7. Appendix C - Sharia Compliance Certificate: Certificate from Sharia board approving the guarantee structure
Authors
Banking and Financial Services
Construction and Infrastructure
International Trade
Energy and Utilities
Manufacturing
Real Estate Development
Government and Public Sector
Defense Contracting
Telecommunications
Mining and Natural Resources
Legal
Finance
Treasury
Trade Finance
Compliance
Risk Management
Credit
Banking Operations
Project Finance
Commercial Operations
Islamic Banking
Documentary Credits
Chief Financial Officer
Treasury Manager
Trade Finance Manager
Legal Counsel
Compliance Officer
Risk Manager
Credit Manager
Banking Relationship Manager
Project Finance Director
Contract Manager
Finance Director
Company Secretary
Commercial Director
Islamic Banking Specialist
Senior Bank Officer
Documentary Credits Manager
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