Artilce-3-URDG-Interpretation

Interpretation is the act of explaining, reframing, or otherwise showing understanding of terms used in URDG, let’s look at the article 3 of URDG.

Artilce-3-URDG-Interpretation

A. Branches of a guarantor in different countries are considered to be separate entities, for an example HDFC Bank, India and HDFC, London will be separate Banks. In case if issued Guarantee is not by bank instead any corporate then the branch of that guarantor in other country will be different entity.

B. Except where the context otherwise requires, a guarantee includes a counter guarantee and any amendment to either, a guarantor includes a counter-guarantor, and a beneficiary includes the party in whose favor a counter-guarantee is issued.

Guarantee means counter guarantee or local guarantee, Guarantor means either the issuer of counter guarantee or local guarantee. Beneficiary means the party of the guarantee who is entitle to claim under the Guarantee. However, because counter guarantee is issued in the favour of a local guarantor and on back of that they issue local guarantee so the beneficiary for the counter guarantee will be local guarantor who will issue a separate guarantee in favour of original beneficiary.

C. Requirement for presentation of one or more originals or copies of an electronic document is satisfied by the presentation of one electronic document.

There is slight difference between electronic document and electronic presentation. Electronic documents are electronically generated and in most cases electronically signed wherein electronic presentation means documents are being presented via electronic tangible mode such as Floppy, CD, Uploaded on URL, E-Mails.

If a guarantee calls for 2 originals/copies electronic surveyor report and provide the mode as Email, in that case only one electronic surveyor report will suffice the need as per this sub article, as required number of original can be produce from that one original or copy.

D. When below given terms are used with a date or dates to determine the start, end or duration of any period then:


I. "From", "To", "Until", "Till" and "Between", Include the date.
For an example if guarantee states “a demand can only be made between 1st to 10th June” which means it can be presented on 1st as well as 10th June.
 
II. Before" and "After" exclude the date mentioned and applies as per simple English meaning.
For an example if guarantee states “demand must be made before 10th June” which means it must be presented till 9th June.

E. The term "Within", when used to indicate a period after a given date or event, excludes that date or the date of the event but includes the last date of that period.

F. Terms "First Class", "Well-Known", "Qualified", "Independent", "Official", "Competent" or "Local" when used to describe the issuer anybody can issue the documents except the beneficiary or the applicant as the indication from the guarantor is to be issued by third party.

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Chandan Kumar Yadav
My name is Chandan Kumar Yadav CDCS, CSDG, CITF, PGDIBO,AML-KYC, CCFE, MLIBF, CSF, 6SIGMA a trade finance professional with an experience of 11 years whereas worked with several stages of letter of credit, bank guarantee and on other payments methods of trade transactions such as documentary collection, open accounts, SBLC etc., I have a fair understanding of Trade Based Money Laundering as well, Blogging related to Trade Finance is my passion and I want to share which I know and learn from others, I have worked with Wells Fargo, Yes Bank Limited and Bank of America, India which helped me to gain knowledge, view of Trade Finance and importance of International Trade in world's economy. Trade Finance is thumping product, everyday we are learning something new so in order to keep learning I started this as one of the platform. . Let's Learn Together

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