It consists of granting guarantees in foreign currency. Some foreign trade transactions are carried out through international tenders, which require bank guarantees.
WARRANTY | COVERAGE | VALUE | DEADLINE |
Bid Bond | Compensation for losses resulting from a bidder's refusal to sign a contract after winning a tender. | Standard 5% to 10% of the value of the bid. | Bid deadline. |
Performance Bond | Compensation for losses caused by non-compliance with the contract between the parties. | Amount to be reimbursed as established in the contract. | Contract term. |
Advance Payment Guarantee | Repayment of advance payments under a contract between the parties that has not been performed. | Prepayment amount plus charges. | Contract term. |
Stand By | Repayment of loans. | Amount of credit plus charges. | Credit term. |
Aval | A draft in foreign currency issued by a foreign exporter of goods and services against a Brazilian importer. | Withdrawal amount. | Withdrawal deadline. |