Confirmation of a Demand Guarantee (or a Standby Letter of Credit) means that CEXIM adds its confirmation to a guarantee at the authorization or entrustment of the issuing bank (the instructing bank), undertaking the whole or part payment obligation when the instructing bank fails to fulfill the above-mentioned obligation.
Through utilizing our high credit rating, which is the same as China’s sovereign rating, can instructing banks benefit from our resources in international settlement, guarantee issuance and correspondent banking network so as to provide trade finance service to their customers.
Confirmation of a guarantee occupies the instructing bank’s credit facility in CEXIM;
The demand guarantee should contain clear and complete clauses instead of any clauses in breach of foreign exchange regulations in China or unfavorable to CEXIM;
The issuing bank shall submit a clear request to us and acknowledge the responsibility of being a counter-guarantor; the beneficiary shall notify its acceptance of confirmation clearly;
Normally this service is provided in the form of standby letter of credit.