Back To Back Bank Guarantee Template for Netherlands

Back To Back Bank Guarantees are essential financial instruments used in international trade and complex commercial transactions where direct guarantees may not be practical or acceptable to the beneficiary. This document type is particularly relevant when a local bank guarantee is required in a transaction, but the principal's relationship bank is in a different jurisdiction. Under Dutch law, these guarantees must comply with the Civil Code (Burgerlijk Wetboek) and the Financial Supervision Act (Wet op het financieel toezicht), while also considering EU banking regulations. The document includes detailed provisions for the guarantee chain, payment mechanisms, enforcement procedures, and risk mitigation measures. It's commonly used in large infrastructure projects, international trade transactions, and other situations requiring robust financial security arrangements.

1. Parties: Identifies all parties involved: Counter-Guarantor Bank, Guarantor Bank, and Principal

2. Background: Explains the context of the back-to-back arrangement and the underlying transaction

3. Definitions: Defines key terms including 'Primary Guarantee', 'Counter-Guarantee', 'Beneficiary', and other relevant banking terms

4. Structure of the Back-to-Back Guarantee: Details the relationship between the counter-guarantee and the primary guarantee

5. Amount and Currency: Specifies the guarantee amount, currency, and any provisions for currency conversion

6. Term and Expiry: States the duration of both guarantees and conditions for extension

7. Demand Requirements: Specifies the conditions and documentation required for making a demand under the guarantee

8. Payment Obligations: Details the payment mechanics and timing requirements

9. Reimbursement Obligations: Outlines the principal's obligations to reimburse the counter-guarantor

10. Fees and Costs: Specifies all fees, charges, and costs associated with the guarantee

11. Representations and Warranties: Standard banking representations and specific declarations regarding the arrangement

12. Events of Default: Lists circumstances constituting default and consequential actions

13. Governing Law and Jurisdiction: Specifies Dutch law as governing law and relevant jurisdiction