Termination of the letter of guarantee
1. Issuing of a letter of guarantee
The issuing of a letter of guarantee is made in accordance with the provisions of the specific
2. Amendment of a letter of guarantee
During the financial mecahnism may occur events that determine the need to amend the guarantee.
Generally, these amendments are ralated to the value of guarantee (increasing/ reducing the value),
validity of guarantee (extending/ reducing the period) or the amendment of any other element of the
In order to amend a letter of guarantee is necessary that all three parts involved (ordering/instructing
party, ordering bank, beneficiary) to agree. If the requested amendment is rejected by the beneficiary,
the gurrantee in its original form remains in force.
An amendment can be made only by the ordering/instructing party, even if it is made at the request of
the beneficiary.
Note: In order to amend the guarantee the beneficiary's consent must be expressed in writing, the
document containing the agreement will be presented to the Bank in a form/ way which allow its
Were, at the time of receipt of instructions for the issue of an amendment to the guarantee, the Bank,
for whatever reason, is not prepared or is unable to issue the amendment, the guarantor shall without
delay so inform the party that gave the guarantor its instructions.If the requested amendment is
rejected by the Bank, this amendment has no effect, the guarantee in its original form remaining in
force, unchanged.
The amendment of a guarantee enter into force and becomes irrevocable from the date of its issuing.
The issuing of a guarantee amendment implies the same procedure as the issuing of the guarantee
itself and requires the issuance of a document through which the Bank changes the terms of initial
3. Letter of guarantee payment Payment (execution):
a) Presentation of demand:
Payment (execution) of a guarantee implies all the activities related to the demand submitted by the
beneficiary of the guarantee and the examination of that demand by the bank.A demand under the
guarantee is submitted by the beneficiary when the applicant is in breach of its obligations under the
underlying relaitonship. In order to be considered a complying demand, the presentation should fulfill
certain reuirements.
The demand under the guarantee shall be made only by the beneficiary, in writing, being supported by
such other documents as the guarantee specifies, if it is appropriate. The demand shall be supported
in any event by a supporting statment , by the beneficiary, indicated in what respect the applicant is in
breach of its obligations under the underlying relationship. The supporting statment shall be presented
in a separate signed document accompanying or identifying the demand or may be included into the
The demand must reach the guarantor’s headquarters within the validity of the guarantee. Neither the
demand, nor the supporting statement, nor any other document may be dated before the beneficiary is
entitled to make a demand or later then the date of its presentation

If the expiry date of a guarantee falls on a day that is not a business day at the place for presentation of the demand. the guarantor can suspend payment for a period not exceeding 30 calendar days following its receipt of demand. the following situations may occur: o - The Bank determines that the demand under the guarantee is a complying demand and decided to make the payment under the guarantee.The demand for payments is deemed to be withdrawn if the period of extension requested in that demand is granted within the period of 30 calendar days mentioned.The transmission of the demand must be made by swift. In this case. when no amount remains payable under it. The notice shall state: - that the guarantor is rejecting the demand. The decision to suspend the payment should be taken within the period of five working days following the date of presentation. on presentation to the guarantor of the original of the letter of guarantee or of beneficiary’s signed release from liability under the guarantee . o The Bank determines that the demand under the guarantee is not a complying demand and decided to reject the demand. o by force of law. Note: When the guarantor rejects a demand it shall give a single notice to that effect to the presenter of that demand. c) Payment (execution)/rejection of demand of a guarantee After the exmination of the demand. Note: A complying demand may include. exmine the demand and determine if it is a complying demand. each discrepancy for which the guarantor rejects the demand. b) Examination : Represents the maximum period of time necessary for the examination of the demand and sustaining documents. another demand could be submitted by the beneficiary within the validity of the guarantee. or by presentation to the territorial units’ premises together with the original of the letter of guarantee. to be consistent with eachother. o by cancelation. the complying demand shall be paid without the need to present any further demand. The notice shall be sent without delay but not later then the close of the fifth business day following the date of presentation. The guarantor shall within five business days following the date of presentation. the information contained into a document not contradict the information contained in other document. If no such period of extension is granted. 4. as an alternative. Specification: When the Bank decided to reject a non complying demand. This period is not shortened or otherwise affected by the expiry of the guarantee on or after the date of presentation The Bank shall examine the documents which has: - to be in accordance with the terms and conditions of the guarantee. o by payment. Termination of the letter of guarantee: A guarantee shall terminate : o on expiry date. a request to extend the expiry date of the guarantee. the expiry date is extended to the first following business day at that place. in the case of obvious abuse or fraud.

Specification: For all these situations the guarantee shall terminate wheter or not the guarantee document is returned to the guarantor. Keeping the document by the beneficiary does not confer any additional rights in relation to the liability incorporated under guarantee. .