Bank Guarantee
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A Bank Guarantee offers you the security that an agreed obligation will be fulfilled. If not, you still get paid. This is because the basic principle for every Bank Guarantee is that a bank is the guarantor.
Request to apply for a Bank Guarantee
The online forms are only available in Dutch. Do you need an English form? Please contact our Trade Finance Operations on + 31 (0)10 402 3700.
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Everything you need to know about Bank Guarantees
What is a Bank Guarantee?
Let’s say you enter into an agreement with someone to pay for something or do something in the future. The other party to the agreement wants to be sure that they will indeed receive what they are entitled to under the agreement. A bank can then, at your request, act as guarantor and provide security for your fulfilment of the agreement. If the other party ends up claiming under the Bank Guarantee, the bank will pay them as per the terms of the Bank Guarantee. The amount the bank pays out on a guarantee will always be collected from you.
Bank Guarantees are common when you do business internationally. Also for transactions involving large amounts, complex projects, future obligations to deliver, and/or when dealing with a new business partner.
When we provide a Bank Guarantee, we will block your account equal to the guaranteed amount.
The main features
The party that can claim the Bank Guarantee, i.e. generally the contractual party, is referred to as the ‘beneficiary’. The bank undertakes a payment obligation towards the beneficiary.
- A Bank Guarantee is an independent payment obligation towards the beneficiary. You are not a party in the payment decision.
- The bank guarantees payment of an agreed amount to the beneficiary.
- A Bank Guarantee is irrevocable. This means that you cannot have a Bank Guarantee withdrawn. You can only change the amount, terms for claiming, or other details of a Bank Guarantee with both the bank’s and the beneficiary’s consent. Also the bank cannot amend a bank guarantee without consent of the beneficiary after it has been issued. Therefore you should bear in mind, that as soon as a Bank Guarantee has been issued, you are ‘tied to’ it.
- Bank Guarantees generally have a fixed expiry date. Sometimes they are issued without an expiry date.
Standard or customised
Standard
A standard Bank Guarantee is quick and easy to apply for online.
- With standard guarantee text. The text has been drawn up with due care by product specialists and legal counsels and is generally accepted.
- In Dutch, English, German, or French language.
- In the currencies EUR, USD, or GBP.
- In the name of the applicant (account holder)
- Directly to the beneficiary, without the involvement of a foreign bank.
Customised
If you need a Bank Guarantee with other requirements than those listed above, you can use our customised bank guarantee. This may be the case when, for example, the beneficiary has specific requirements for the guarantee text that differ from our standard guarantee text.
All types of Bank Guarantees
We have listed all types of Bank Guarantees. There is bound to be a Bank Guarantee on this list that is right for your situation.
Fees
We charge a fee for a Bank Guarantee. Take a look at all our fees. (PDF, 241 KB)
Sample calculation
| Situation | |
|---|---|
| Standard or customised?: | standard Bank Guarantee |
| Ordered through: | online standard ABN AMRO form |
| Beneficiary (counterparty): | based outside the Netherlands |
| Guaranteed amount: | € 20.000 |
| Duration: | 1 January to 20 April |
| Guaranteed cover: | credit facility |
| Fees | |
|---|---|
| New application: | € 125 once only |
| Postage*: | € 40 once only |
| Guarantee commission**: | € 50 per month |
| TOTAL for the whole term (subject to changes) | € 365 |
*In this sample calculation, the Guarantee is sent directly to the beneficiary abroad.
**The Guarantee commission is 1.50% (term < 12 months) per year with a minimum of €50 per month. This is the rate that is charged if the Guarantee is covered by a credit facility. The Guarantee commission is 1.25% per year with a minimum of €50 per month if the Guarantee is cash covered. The Guarantee commission is settled on a monthly basis. Part of a month is considered a full month.
Amend a Bank Guarantee
As the applicant, you can amend a Bank Guarantee.
- The guaranteed amount (liability).
- The Guarantee duration.
- The Guarantee text.
Please note: if the amendment is to the detriment of the counter party, we will ask their consent.
Cancelling a Bank Guarantee
Would you like to cancel a Bank Guarantee that does not have an expiry date or cancel a Bank Guarantee before the expiry date of the Guarantee? We will need a waiver from the beneficiary. By signing a waiver, the beneficiary accepts that they can no longer exercise any rights under the Bank Guarantee and that we are released from our obligations.
As soon as we have received the confirmation, the beneficiary ceases to be able to exercise rights under the Guarantee.
Download a standard letter of release form for this. Please check the conditions in the Bank Guarantee text for details. The form must be signed by the legal representative of each beneficiary involved.
Guarantee termination on the expiry date
After the expiry date of the Guarantee, we need approximately 10 days to settle this guarantee in our records.
A direct or indirect Guarantee issued under foreign law is often subject to a separate procedure. It is not always possible to close such a Guarantee after the expiry date.
A Guarantee/counter-Guarantee can in some cases only be released once the beneficiary has returned the Guarantee to the issuing bank.
If you have any questions, please call Trade Finance Operations on +31 (0)10 402 37 00 (local rates apply).
Checklist for your application
The checklist (PDF, 94 KB) provides an overview of the information you need before starting your application for a Bank Guarantee. This will ensure a smooth completion of the application form in one go.
Please note:
- Make sure that there is sufficient working capital available to cover the Bank Guarantee. This can be a credit facility or funds in your business account. We can only execute your application if there is sufficient balance in the account(s) you specified in your application. Funds within the Trade Finance Cover Account are securely blocked until the Bank Guarantee expires.
If you want to use funds in your business account to cover the Bank Guarantee, you need to have a Trade Finance Cover Account. If you do not yet have a Trade Finance Cover Account, we will open one for you. We open the Trade Finance Cover Account in principle in the same currency as the Bank Guarantee. If you would prefer the cover account not to be opened in the same foreign currency as the Bank Guarantee, or if we are unable to open it in that foreign currency, we will open the account in euros. Find out more about the Trade Finance Cover Account. - The application form must be signed by the legal representatives.
What is a Bank Guarantee?
Let’s say you enter into an agreement with someone to pay for something or do something in the future. The other party to the agreement wants to be sure that they will indeed receive what they are entitled to under the agreement. A bank can then, at your request, act as guarantor and provide security for your fulfilment of the agreement. If the other party ends up claiming under the Bank Guarantee, the bank will pay them as per the terms of the Bank Guarantee. The amount the bank pays out on a guarantee will always be collected from you.
Bank Guarantees are common when you do business internationally. Also for transactions involving large amounts, complex projects, future obligations to deliver, and/or when dealing with a new business partner.
When we provide a Bank Guarantee, we will block your account equal to the guaranteed amount.
The main features
The party that can claim the Bank Guarantee, i.e. generally the contractual party, is referred to as the ‘beneficiary’. The bank undertakes a payment obligation towards the beneficiary.
- A Bank Guarantee is an independent payment obligation towards the beneficiary. You are not a party in the payment decision.
- The bank guarantees payment of an agreed amount to the beneficiary.
- A Bank Guarantee is irrevocable. This means that you cannot have a Bank Guarantee withdrawn. You can only change the amount, terms for claiming, or other details of a Bank Guarantee with both the bank’s and the beneficiary’s consent. Also the bank cannot amend a bank guarantee without consent of the beneficiary after it has been issued. Therefore you should bear in mind, that as soon as a Bank Guarantee has been issued, you are ‘tied to’ it.
- Bank Guarantees generally have a fixed expiry date. Sometimes they are issued without an expiry date.
Standard or customised
Standard
A standard Bank Guarantee is quick and easy to apply for online.
- With standard guarantee text. The text has been drawn up with due care by product specialists and legal counsels and is generally accepted.
- In Dutch, English, German, or French language.
- In the currencies EUR, USD, or GBP.
- In the name of the applicant (account holder)
- Directly to the beneficiary, without the involvement of a foreign bank.
Customised
If you need a Bank Guarantee with other requirements than those listed above, you can use our customised bank guarantee. This may be the case when, for example, the beneficiary has specific requirements for the guarantee text that differ from our standard guarantee text.
All types of Bank Guarantees
We have listed all types of Bank Guarantees. There is bound to be a Bank Guarantee on this list that is right for your situation.
Fees
We charge a fee for a Bank Guarantee. Take a look at all our fees. (PDF, 241 KB)
Sample calculation
| Situation | |
|---|---|
| Standard or customised?: | standard Bank Guarantee |
| Ordered through: | online standard ABN AMRO form |
| Beneficiary (counterparty): | based outside the Netherlands |
| Guaranteed amount: | € 20.000 |
| Duration: | 1 January to 20 April |
| Guaranteed cover: | credit facility |
| Fees | |
|---|---|
| New application: | € 125 once only |
| Postage*: | € 40 once only |
| Guarantee commission**: | € 50 per month |
| TOTAL for the whole term (subject to changes) | € 365 |
*In this sample calculation, the Guarantee is sent directly to the beneficiary abroad.
**The Guarantee commission is 1.50% (term < 12 months) per year with a minimum of €50 per month. This is the rate that is charged if the Guarantee is covered by a credit facility. The Guarantee commission is 1.25% per year with a minimum of €50 per month if the Guarantee is cash covered. The Guarantee commission is settled on a monthly basis. Part of a month is considered a full month.
Amend a Bank Guarantee
As the applicant, you can amend a Bank Guarantee.
- The guaranteed amount (liability).
- The Guarantee duration.
- The Guarantee text.
Please note: if the amendment is to the detriment of the counter party, we will ask their consent.
Cancelling a Bank Guarantee
Would you like to cancel a Bank Guarantee that does not have an expiry date or cancel a Bank Guarantee before the expiry date of the Guarantee? We will need a waiver from the beneficiary. By signing a waiver, the beneficiary accepts that they can no longer exercise any rights under the Bank Guarantee and that we are released from our obligations.
As soon as we have received the confirmation, the beneficiary ceases to be able to exercise rights under the Guarantee.
Download a standard letter of release form for this. Please check the conditions in the Bank Guarantee text for details. The form must be signed by the legal representative of each beneficiary involved.
Guarantee termination on the expiry date
After the expiry date of the Guarantee, we need approximately 10 days to settle this guarantee in our records.
A direct or indirect Guarantee issued under foreign law is often subject to a separate procedure. It is not always possible to close such a Guarantee after the expiry date.
A Guarantee/counter-Guarantee can in some cases only be released once the beneficiary has returned the Guarantee to the issuing bank.
If you have any questions, please call Trade Finance Operations on +31 (0)10 402 37 00 (local rates apply).
Checklist for your application
The checklist (PDF, 94 KB) provides an overview of the information you need before starting your application for a Bank Guarantee. This will ensure a smooth completion of the application form in one go.
Please note:
- Make sure that there is sufficient working capital available to cover the Bank Guarantee. This can be a credit facility or funds in your business account. We can only execute your application if there is sufficient balance in the account(s) you specified in your application. Funds within the Trade Finance Cover Account are securely blocked until the Bank Guarantee expires.
If you want to use funds in your business account to cover the Bank Guarantee, you need to have a Trade Finance Cover Account. If you do not yet have a Trade Finance Cover Account, we will open one for you. We open the Trade Finance Cover Account in principle in the same currency as the Bank Guarantee. If you would prefer the cover account not to be opened in the same foreign currency as the Bank Guarantee, or if we are unable to open it in that foreign currency, we will open the account in euros. Find out more about the Trade Finance Cover Account. - The application form must be signed by the legal representatives.
Here’s how to apply for a Bank Guarantee
Determine if a Bank Guarantee is suitable in your situation
Carefully read the information above before applying.
Go through the whole checklist
Use the checklist (PDF, 94 KB) to find out what you will need for your application.
Complete the application online
Your answers to the first questions determine whether you can apply for a standard or a customised guarantee.
Use Google Chrome for the best experience when applying for a Bank Guarantee
Video: International Bank Guarantee
You can also use Bank Guarantees internationally. Watch the video to see how this works.
