An undertaking issued by the bank at the request of the customer and called (the commander) under which the bank undertakes to pay a certain or assignable amount to a natural or legal person called (the beneficiary) without restriction or condition whenever he is requested to do so within the period specified in the letter, and accordingly, the bank that issued the letter of guarantee is bound The amount is fully paid to (the beneficiary) and the purpose for which the undertaking was issued is clearly and precisely defined in the body of the letter of guarantee.
Cases of issuing a letter of guarantee:
The first case: According to an internal request for the benefit of a party inside Iraq.
The second case: According to an internal application for the benefit of a party outside Iraq.
The third case: According to an external request for the benefit of a party inside Iraq.
As for the parties to the letter of guarantee, they are:
1- Guarantor: The bank that issued the letter of guarantee.
2- The Commander: The natural or legal person, the customer of the bank or its correspondent (the foreign bank or the foreign foreign entity) who issues the letter of guarantee according to his order and instructions.
3- The beneficiary: the entity for which the letter of guarantee is issued or in whose name the letter of guarantee is.
Types of letters of guarantee:
There are many types of letters of guarantee and according to the purposes for which they are issued, however, the most common and well-known are the following:
1- Letter of Guarantee: for the purpose of (entering the tender).
2- Letter of Guarantee: For the purpose of (good implementation) this type of letter requires the submission of a letter of assignment from the beneficiary.
3- Letter of Guarantee: for the purpose of (cash payment, advance, or operational advance) and this type of letter requires the submission of the assignment letter from the beneficiary.
Commissions:
Fees and commissions determined in the price table issued by the bank and the Ministry of Finance are collected
Requirements and procedures for obtaining a letter of guarantee:
The request for issuance of the letter of guarantee is submitted by (the commander) to the bank or one of its branches, according to the application form for the issuance of the letter of guarantee after filling it with the required data, the details of which are shown below:
1- The commander’s name.
2- The amount of the letter of guarantee.
3- Duration of the letter of guarantee.
4- The beneficiary.
5- The purpose of the letter of guarantee.
6- Insurances: The bank may request cash or in-kind insurance in exchange for issuing a letter of guarantee documenting the commitment arising from it.
7 – The signature of the order is obtained on the form and in the field designated for it, confirming that the information included in the form is correct.
8- Obtaining the approval of the branch manager to issue the letter of guarantee in accordance with the conditions mentioned in the bank facilities approval form or according to his powers determined in accordance with the instructions for banking facilities.
9 – Each letter of guarantee is assigned a file of its own upon its issuance, and a sequence number is reserved for it. Also, forms of letters of guarantee include serial numbers, and the letter number is included in all papers related to the letter, documents and application form. The stamp fee will be charged.
10- Signing the contract for the issuance of the letter of guarantee, which is subject to the fee of the financial stamp.
For more details, you can visit one of our branches and talk to the concerned employee or call the number 6070 (for international +9646070)
or by mail (marketing.support@imtb.iq)