Trade Facilitation Programmes

Coverage:

The TFPs cover the international bank against political and commercial risks that may be entered into with the local bank in connection with a business transaction. TFP guarantees can guarantee the payment of:

• Commercial documentary credits
• Documentary credits standby and bank guarantees relating to trade operations
• Promissory notes and bills of exchange relating to trade operations

The beneficiary of the multilateral bank's coverage is the international bank that confirms, guarantees or accepts the payment.

 

Guarantees:

The multilateral bank's guarantee can be requested by the local bank itself (issuing or obliged) or the international bank (confirming). Once the operation is accepted by the multilateral bank and its form ultimately accepted, a standby guarantee will be issued in favor of the international bank.

Guarantees issued by multilateral banks:

• Are subject to the UCPs
• They mature 15 days after the maturity date of the payment instrument to which they relate.
• They can cover, as applies, the total value of the underlying instrument.
• They are payable 15 days after the World Bank receives the international bank's claim.

Fees will depend on the characteristics and the country and are generally borne by the party requesting the guarantee, which may be the local issuing bank or the international confirming bank.
Maximum terms will depend on the country and can range between 180 days and 3 years.