Jan 9, 2013   //   by Administrator   //    //  Comments Off

BG means a Bank Guarantee
Bank Guarantee
A banking instrument sent through the SWIFT system indication that there are a funds that are set aside (blocked) to make a purchase. A BG is stronger than a bank comfort letter but is still not an actionable banking instrument, meaning it can not be drawn upon by the Seller’s bank. it is strong enough to get a vessel loaded but not usually strong enough to warrant the seller’s bank to issue a performance bond. It can and is usually used as a place holder until there is a final determination of the cargo via a Q&Q test and the delivery documents are presented at the seller’s bank for payment. Then it is common that payment is made by a standard wire transfer, an MT103

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