Document background
The Bank Counter Guarantee is a crucial document in international trade and banking operations under German law. It is typically used when a bank (Primary Bank) issues a guarantee in favor of a beneficiary but requires back-to-back support from another bank (Counter-Guarantor), often due to cross-border transactions or credit risk management requirements. The document details the Counter-Guarantor's obligation to reimburse the Primary Bank upon a compliant demand, specifying conditions, amount, validity period, and enforcement mechanisms. It must comply with German banking regulations, the German Civil Code (BGB), and often incorporates international banking practices. This structure is particularly common in international trade finance, project finance, and construction projects where local bank guarantees need to be supported by international banks.
