Beneficiaries of Bank Guarantees
Legal entities abroad inviting international tenders and/or intending to enter (or having already entered) into a contract on the purchase of goods, works or services.
If a bank guarantee (hereinafter: bank guarantee) is issued in co-operation with an exporter’s commercial bank, the commercial bank can be a beneficiary of the guarantee.
Promotion of export of goods, works or services by enabling the exporter, through the issue of a bank guarantee, independently or in co-operation with the exporter’s commercial bank, to participate in international tenders and enter into contracts.
Manner of issuing guarantees
•HBOR issues guarantees independently at the request of an exporter;
•HBOR shares a certain per cent of the risk associated with the issue of a guarantee with a commercial bank; the bank issues a guarantee, and HBOR issues a counter guarantee to the bank;
•HBOR and a commercial bank issue separate guarantees;
•HBOR, as the main issuer of the guarantee, shares the risk with another commercial bank that issues a counter guarantee to HBOR.
Eligible applicants are legal entities (exporters) intending to participate in international tenders in accordance with the terms and conditions determined by the bank guarantee beneficiary, or intending to enter (or having already entered) into a contract on export of goods, works or services.
Types of Bank Guarantees
HBOR supports exporters by issuing tender guarantees for the participation in international tenders (Tender Guarantee or Bid Bond/Guarantee).
The guarantees are usually for the amount of up to 10% of the bid value and guarantee the seriousness of the exporter’s bid.
HBOR supports the export of equipment, machinery, special products and/or services, or the carrying out of investment activities by issuing performance guarantees to the exporter pursuant to the terms and conditions of the export contract (Performance Bond/Guarantee).
The guarantees are usually for the amount of up to 20% of the value of delivered equipment, machinery, special products and/or services, or the value of investment activities.
Advance Payment Guarantee
For the purpose of enabling exporters to collect advance payments, HBOR provides advance payment guarantees to guarantee beneficiaries in the amounts agreed by exporters and guarantee beneficiaries (Advance Payment Guarantee).
The guarantees are for the maximum amount of the agreed advance payment.
If the subject of an export contract is equipment, machinery, special product and/or service or the carrying out of investment activities, which the exporter guarantees to be free of defects, the warranty period will generally be covered by a warranty guarantee (Warranty Period Guarantee/Bond).
The guarantees are usually for the amount of up to 10% of the export contract value.
A bank guarantee is issued in the export contract currency.
Terms and Conditions for Issue of Guarantees
•Exporter has been operating for at least one year;
•Exporter submitting an application for the issue of a bank guarantee has not been continuously blocked for more than 30 days in the past 6 months of operations, bankruptcy proceedings neither have been nor are threatened to be initiated against the exporter, and no proceedings have been either initiated or threatened against the exporter (court, execution, criminal, liquidation etc.).
The fee for the processing of application for the approval of issue of bank guarantee and the fee for the issue of bank guarantee depend on the risk category of exporter:
|RISK CATEGORY OF EXPORTER||APPLICATION PROCESSING FEE (ONE-OFF)||BANK GUARANTEE ISSUANCE FEE (QUARTERLY)|
•Fee for the processing of application for the approval of issue of bank guarantee: one-off on the committed amount of issued bank guarantee, at least HRK 500.00;
•Fee is calculated and charged before the issue of bank guarantee;
•Fee for the issue of bank guarantee is calculated and charged quarterly in advance; at least HRK 500.00;
•When a guarantee is issued in co-operation with the exporter’s commercial bank, HBOR and the bank agree the level of the fee for every transaction.
•bills of exchange and debentures
•pledge of property or transfer of fiduciary title to property supported by property insurance policy endorsed in favour of HBOR
•other security customary in the banking business.