Applicant requests guarantee
Applicant approaches its bank for a guarantee supporting a contract in another market.
Demand Guarantee · Local issuance through two banks
Counter-Guarantee Procedure
How an overseas applicant can support a local guarantee issued by another bank.
Need for local issuing bank
Beneficiary/contract may require a local bank guarantee rather than a foreign bank’s direct undertaking.
Counter-guarantee issued
Applicant’s bank issues a counter-guarantee/instruction to the local guarantor bank, commonly using appropriate Category 7 messaging.
Local bank issues guarantee
The local bank issues its own guarantee to the beneficiary under agreed wording/rules.
Demand if called
Beneficiary demands under the local guarantee; local bank examines under that guarantee.
Counter-guarantee claim
If conditions are met, the local bank may claim from the counter-guarantor under the separate counter-guarantee.
What can change from bank to bank?
The commercial objective may be similar while the bank’s internal route differs. Credit approval, collateral, compliance review, legal wording, message choice, fees and cut-off times can all vary. Always distinguish those bank-specific steps from the incorporated rules and the purpose of the SWIFT message.
Reviewed: September 2026Standards and bank policy can change.How MyGreed classifies proceduresOfficial-source directory
Procedure ruleThis is a typical learning flow. Exact sequencing, messages, approvals and documents can vary by bank, rules, law and negotiated transaction.