Demand Guarantee check0 / 1 answered · 0 correct
Check 1
Is assigning proceeds the same as transferring the right to demand payment?
Amendment, Transfer and Assignment
Separate changes to the undertaking from transfer of rights and assignment of proceeds.
Amendment
A guarantee can be amended according to its terms, governing rules and bank procedures. An MT767 is commonly used for amendment of a demand guarantee or standby in SWIFT Category 7.
Transfer
A guarantee is not automatically transferable. Where transfer is permitted, the rules and undertaking govern how the beneficiary’s rights may be transferred.
Assignment of proceeds
Assignment of proceeds concerns the right to receive money that may become payable. It is different from transferring the right to make a demand.
Never infer rights from marketing labels
“Assignable,” “transferable,” “divisible” or “monetisable” should be checked against the actual undertaking and applicable law rather than assumed from a brochure.
Remember thisAmendment, transfer and assignment of proceeds solve different problems.
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