Fourth, they did not carefully understand their position in the basic transaction and formulate corresponding measures。In overseas engineering projects, the identity of domestic enterprises is very important: whether they are the general contractor or subcontractor will directly affect their status in the project, and the risks they face are different。Therefore, it is important to recognize the risk of your position and formulate the terms of the guarantee accordingly。

    Fifth, insufficient understanding of counterparties。If you know yourself and your enemy, you can win a hundred battles。In overseas engineering projects, it is necessary to understand the status of the counterparty and formulate countermeasures for possible problems。The best way for some domestic enterprises is to apply to the local court for a stop payment order once there is a guarantee claim, completely ignoring their own reputation and the reputation of the bank.And some courts will easily issue a stop payment order, causing a very bad impact overseas。Counterparty risk is the risk that domestic enterprises need to bear, and the letter of guarantee is only a guarantee tool。It cannot be denied that some foreign beneficiaries will make malicious claims, which makes it more necessary for domestic enterprises to fully understand the risk status of the counterparty, and bear the necessary responsibilities once the risk occurs。A simple stop payment will only affect the reputation of the company itself and will have an adverse impact on future transactions。

    Sixth, there are still deficiencies in the drafting of the terms of the guarantee。At present, most domestic enterprises and banks are only familiar with the Uniform Rules on Demand Guarantee (URDG)。However, according to the author's estimation, since most countries in the world have their own guarantee laws (or laws related to letters of credit, such as the United States), the proportion of accepting URDG as a guarantee rule is not high, let alone URDG is not a law, but just a set of rules。Letters of guarantee involving the Middle East, Southeast Asia, and even the United Kingdom are generally not applicable to URDG, and the content of the letter of guarantee involving South Asia is relatively lengthy, repeated, there are many remote words, it is easy to confuse people。Because the overseas letter of guarantee involves different jurisdictions, the review of the letter of guarantee is more troublesome。In this regard, some domestic enterprises simply throw this job to the bank;Domestic banks also have certain limitations in the review of guarantees (in order to break through the above limitations, I am pleased to see that some large banks have begun to hire external professional lawyers to review the terms of guarantees), which may lead to certain technical risks。

Risk prevention suggestion

    First, we should pay more attention to basic transactions。Both enterprises and banks should pay attention to the underlying transaction risk, which is the source of the risk。There are no disputes in the underlying transaction, and generally no claims on the guarantee will occur。

    The second is to strengthen the prevention of national risks and commercial risks。Country risks include not only political risks, but also risks such as foreign exchange controls。At the same time, attention should be paid to the inspection of the counterparty, if the counterparty is the general contractor, but also to inspect the owner, and to understand the status of other subcontractors。