1 / International bank and financial guarantees:
The international banking community
has put in place two major financial instruments: documentary credit and an
international bank guarantee. The purpose of the first instrument is to
persuade the issuer to make sure that it is paid on the agreed date or at the
end of the completion of the contract (selling goods, providing services,
etc.). The second instrument aims to Reassuring the importer of compliance with
the due process of the contracting supplier.
Thus, the international community
implements uniform practices, the rules of which are set by the International
Chamber of Commerce (ICC).
2 / Requesting bank guarantees when making the initial request:
International bank guarantees are
often issued according to a very accurate chronology according to the state of
the progress of the contractual project starting with the bid guarantee at the
stage of the bid request and then the guarantee of redemption in advance or
deposit at the beginning of the contract, that achievement when signing the
interim and / or final acceptance report and finally the retention guarantee
Which extends for more than one year after delivery from the market to the
beneficiary.
3 / The tender guarantee (Open tender offers Guarantee):
Within the framework of contracts,
companies and national institutions resort to tender invitations or judicial
rulings in order to identify various international suppliers and choose the
best offer to implement the market. If the bidder is chosen, he must adhere to
his obligation to complete the contract according to the specifications of the
specifications.
Consequently, the bid bond enters
into the pre-contracting stage and works to compensate the beneficiary if the
bidder withdraws his bid during the selection period of offers and / or refuses
to provide other guarantees stipulated in the contract.
The value of the tender guarantee
ranges from 1% to 5% of the bid value and is valid for six months from the date
of opening the offers. The guarantor will be notified of bail in the following
cases.
- When the bidder is rejected,
he is not chosen to implement the contract in question.
- When the bidder chooses to
implement the contract and proceed with the application of other guarantees
stipulated in it.
1 / Get a financial provider (on the account):
Generally, for contract performance,
an advance, which does not exceed 15% of the contract amount, is expected to be
paid, before the contract is executed. This advance is also called a refund
guarantee and is only one of the facility granted to the owner to allow him to
start completing the contract.
This guarantee comes into effect from
the payment of funds in the manager's account with the bank agreed in the
contract and remains valid in general, until the signing of the provisional
acceptance record or it is reduced in proportion to the services provided and
until full payment.
2 / Ensuring good implementation (good conclusion):
Its purpose is to ascertain who
benefits from paying his money in the event of non-compliance with the terms of
the contract in terms of the quality or quantity of goods and / or services
stipulated in the contract.
The performance bond is placed
upon signing the contract and remains in effect until final acceptance in
accordance with the contractual provisions.
Sometimes this guarantee can be
reduced by 50% upon temporary admission and by 50% upon final acceptance of the
goods and / or services.
4 / The guarantee is deducted from the project guarantee amount:
This guarantee is also called a
maintenance warranty or a waiver of warranty and covers construction or
maintenance services during the test period, which range from temporary
acceptance to final acceptance of the contract.
This guarantee intervenes to put an
end to the retention of the amount that sometimes reaches 10% of the contract
value.
If the performance guarantee covers
the period from the completion of the contract until the temporary acceptance,
it is replaced by a maintenance guarantee during the trial period of the works
and loses its effect upon final acceptance.
The warranty retention guarantee is
activated if the supplies and / or services provided do not meet the
contractually agreed standards or the source refuses to interfere with the
maintenance of the equipment during the pre-determined warranty period.
5 / Customs guarantees:
This type of commitment is
mainly for work contracts that require entry of work methods and equipment with
temporary use of an economic customs system (suspension system) for customs
duties and taxes.
Indeed, companies operating in
markets that require the import of equipment and materials of great value are
exempt from paying fees and taxes by providing a guarantee that covers the
amount of the fees mentioned.
In addition, for imports of
non-existent documents, the customs guarantee enters to allow importers to
possess goods and prepare possession documents.
1 / provisional acceptance:
Some foreign contractors are
authorized by the Customs Department to import equipment temporarily without
paying fees and taxes, provided that this equipment is re-exported once work is
completed (Instruction 866/82 / Ministry of Finance). This guarantee makes it
possible to guarantee a specific amount of fees and taxes due on temporary
import.
2 / Withholding guarantee:
Foreign companies with a large
volume of imports can guarantee the volume of their imports in an open account
with the customs administration and collect the fees and taxes due, when the
shipments arrive, from this account until they are completely exhausted.
This formula corresponds to a credit
line granted by the Customs Administration for the benefit of foreign companies
required to pay any customs duties.
3 / Supply guarantee :
This guarantee also intervenes
to ensure the arrival of the goods in the absence of one or more documents in
the notary, and the importer can remove his goods and complete the formalities
when possessing the missing document.
4 / Guaranteed obligations:
It is a credit granted by the
Customs Department on behalf of the importer, which enables it to pay duties
and taxes through 120-day money transfers, with a comprehensive counter
guarantee of equal value.
6/ Other bank guarantees upon its first request:
The bank's intervention, in terms of
commitment, is not limited in practice to traditional international operations
(transfer, Remdoc, Credoc, etc.) but extends to the occasional foreign trade
operations.
Indeed, maritime transport represents
the lion's share in the field of multimodal transport, which has strongly
encouraged the bank to play His role as a more international mediator and
gradually imposed himself in practice to reduce emerging problems.
International transactions.
1 / Letter of guarantee for lack of certainty:
Under the Brussels Agreement of 1924,
the carrier is responsible for damages and losses incurred by the goods from
receipt to delivery in exchange for delivery of the original bill of lading,
and the non-delivery status on the bill of lading. The bank interferes with
instructions from the requesting party, in general the recipient of the goods
or its agent, to issue a pledge in favor of The carrier or the consignee (the
agent), to allow him to possess the goods against delivery of the original bill
of lading or payment of the value of the goods in the event that violations of
delivery are observed without the bill of lading.
However, any confusion must be
removed between ensuring that there is no original bill of lading for the
carrier and the controversial delivery of goods that are permitted in the
absence of one or more formalities in favor of the customs administration.
2 / Payment guarantee:
Sometimes, the importer may face
financial difficulties to settle his export related fees, and the guarantor bank
intervenes to issue guarantees in favor of the exporter within the framework of
certain credits (buyers or financial).
This guarantee may also be issued in
favor of a court empowered to rule in a case in order to ensure payment of
costs and fees incurred in legal proceedings.
The guarantee of payment covering
external credits is effective as soon as it is issued until the date of full
payment of the credit subject to the guarantee, while the guarantee issued for
the benefit of the court is issued once it is issued and canceled by an award
issued by a competent judicial authority.
7 / Preparing and managing bank guarantees:
Algerian regimes excluded the
practice of direct guarantee. Indeed, any bank guarantee, created by an
Algerian bank in favor of a resident economic worker, must necessarily be in
exchange for a guarantee from a first-class foreign bank (note MoF No. 171 / F
/ DCA of 21/01/01).
/ Warranty Preparation:
Counter-guarantee reception:
According to the instructions of the
foreign source, the foreign bank issues the counter-guarantee in favor of the
Algerian bank, which covers the guarantee that the latter will issue in favor
of the Algerian buyer.
The counter-guarantee is examined by
the Algerian bank at the level of its international administration by assessing
the solvency of the issuing bank and its compatibility with the text of the
counter-guarantee in relation to the standard text developed by the Ministry of
Finance (Note 532 SG. 06/25/1985).
If the counter-guarantee is accepted
by the guarantor bank, the latter informs the beneficiary, for approval, of the
terms of the guarantee that will be implemented. The beneficiary is granted ten
(10) days to make his reservations, after this period the conditions are
accepted implicitly and the guarantor moves to the issuance of the guarantee
law (Algerian Education Bank No. 05/94 Article 07).
According to the bond of guarantee,
the Algerian bank has an official obligation to pay the amount of the guarantee
to the Algerian beneficiary at the request of the latter.
08 / Mandatory information related to the guarantee of the first application:
1 / Appointment of the parties:
The president, the beneficiary,
and the guarantor bank are the main parties to the security law.However, the
appointment of the beneficiary is of particular importance in order to preserve
the personal nature of the security law, unlike the claim of what the guarantee
represents and what can be allocated or transferred.
2 / The subject of the guarantee law:
The security bond can only
cover the market for which the security was issued, in other words, this
obligation covers the potential risks associated with non-compliance with the terms
of the underlying contract between the buyer and the supplier.
3 / The amount of the guarantee:
A review of the contract amount can
automatically modify the amount of the collateral, and for this reason the
ratio representing the collateral amount compared to the base contract must be
clearly and explicitly stated in the escrow procedure, especially for
performance contracts according to the segment under which the collateral
amount is amortized according to the amount of work performed.
4 / Termination of the guarantee document:
Articles 18 and 24 of the RUGD state
that the failure of a security reaction does not affect the veracity of the
act, on the contrary, the reaction irreversibly assumes the expiration of the
guarantee act.
Also, the date of the calendar and /
or event causes the beneficiary to release the guarantee (issuance) under
conditions conducive to the completion of the contract. However, nothing
prevents the occurrence of unfavorable factors to prevent the smooth operation
of the contract and consequently implies the application of the guarantee,
according to the principle of the first request, to a simple request made by
the beneficiary (Article 20. (RUGD).
09/ Applicable law in the event of a dispute over the implementation of bank guarantees :
Disputes arising from the
implementation of bank guarantees, CCI through Article 27 of the RUGD
encourages guarantors and counter-guarantors to provide obligations to the law
of the bank providing the service, unless otherwise agreed between the parties,
namely;
- Guarantee of the state law that
issued the guarantee.
- The counter-guarantee of the law of
the headquarters of the issuing counter-guarantee.
1-9 / Bank Guarantee Administration:
Amendment:
The beneficiary must be notified of
any modification before its implementation; these modifications are generally
related to the value of the contract, its price and / or the nature of the
contract.
Extension:
The beneficiary often
interferes with the guarantor bank to request the extension of the date
referred to previously in the guarantee document, and this intervention is
explained by a failure noted during the completion of the contract.
2-9 / Warranty Disclaimer:
The warranty ends if one of the
following conditions is met;
(1) Raise the hand:
This formula reflects the
respect of the contractual obligations of the participating contractors and the
consensual release of the guarantee by the beneficiary. In the absence of this
measure, the originator will be supported by additional committees, sometimes
reaching the amount of the guarantee.
(2) The latest developments:
In case the foreign supplier fails in
its contractual obligations towards its Algerian partner, the latter will ask
the guarantor bank to enter the amount of the guarantee.
