ICC Uniform Rules for Demand Guarantees, (URDG 758)
URDG 758 are the ICC rules for Demand Bank Guarantees.
The International Chamber of Commerce (ICC), has 45 million members in over 100 countries. The purpose of the ICC is to set rules for global business, including international trade, which are in fact guidelines but are adhered to by all major banks. They therefore define the format of a bank guarantee.
The format of a Demand Bank Guarantee
URDG 758 are a specific set of rules laid down by the ICC for the issue of Demand Bank Guarantees. The rules ensure that the Demand Bank Guarantee is utilised for the exact purpose specified, and here we refer specifically to monetisation. Furthermore, crystal clear wording will block any future potential litigation should any of the parties associated with the Demand Bank Guarantee try and challenge the terms of the instrument.
Under URDG 758, the Demand Bank Guarantee underpins the underlying transaction, and for whatever reason, should the Beneficiary default on their financial obligations, the lender can claim against the Demand Bank Guarantee as it is “payable on first demand”.
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