Bank Counter Guarantee Template for Hong Kong

A Bank Counter Guarantee is essential in international trade and banking transactions where multiple financial institutions are involved. It is commonly used when a bank in Hong Kong provides backing to another bank's guarantee, typically in cross-border transactions or when local regulatory requirements necessitate a local bank's involvement. The document specifies the counter-guarantor's commitment to reimburse the primary guarantor bank if a valid claim is made under the primary guarantee. This arrangement is particularly relevant in Hong Kong's role as a major financial hub, where banks frequently engage in international guarantee arrangements. The document must comply with Hong Kong banking regulations and includes specific provisions for guarantee amount, validity period, claim procedures, and governing law clauses.

1. Parties: Identification of the counter-guarantor bank, primary guarantor bank, and reference to the beneficiary of the primary guarantee

2. Background: Context of the underlying transaction and the primary guarantee that necessitates this counter guarantee

3. Definitions: Key terms used in the counter guarantee, including 'Primary Guarantee', 'Underlying Transaction', 'Guarantee Amount', etc.

4. Counter Guarantee Amount: Specification of the maximum amount covered by the counter guarantee and currency

5. Scope of Counter Guarantee: Details of what is covered and the conditions under which the counter guarantee can be invoked

6. Duration and Validity: Term of the counter guarantee, including effective date and expiry conditions

7. Payment Provisions: Process and conditions for making payments under the counter guarantee

8. Claims Procedure: Detailed process for making and handling claims under the counter guarantee

9. Bank's Rights and Obligations: Specific rights and obligations of both banks under the counter guarantee

10. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction for disputes