ICC Uniform Rules for Demand Guarantees, (URDG 758)
The International Chamber of Commerce, (ICC), is based in Paris, and is responsible for setting the rules and guidelines for global business on behalf of their 45 Million members in over 200 countries. The membership roster adheres to all the rules, and contains all major banks, (and many minor banks), and within these rules are set standards for International Trade which includes the use of Standby Letters of Credit and Bank Guarantees.
URDG is typical of the rules laid down for banks that issue Demand Bank Guarantees. The rules include a specific and precise verbiage that ensures all concerned parties are aware that a Demand Bank Guarantee has been issued solely for monetisation, and such is the wording, any future potential litigation to the contrary, would be fruitless.
In the event a Beneficiary defaults on their financial commitment to the lender, under the rules as laid down by the ICC Uniform Rules for Demand Guarantees, (URDG 758), the Demand Bank Guarantee is payable on First Demand.