Guarantees

trace:original bank guarantees

With trace:original, it is possible to fully digitise bank guarantees. trace:original is replicating today’s paper workflow through an end-to-end digitalisation process that is acceptable to all parties while keeping their current systems. There are no special requirements on any counterparties to the bank except that they need a computer and access to the internet. Not even a change of current laws and regulations is needed, provided they are technology-neutral.

Digital guarantee (BG) process with trace:original

(Click each step for a detailed view)

guarantees-application
  1. The applicant makes request to the bank for a BG to be issued in favour of the beneficiary
  2. The bank goes through standard processes and procedures to approve and prepare the issuance
  3. The BG is approved and ready to be issued
guarantees-issuance
  1. The bank's trade finance application sends the BG content as PDF and/or standard structured data to the trace:original node, the ‘digital printer’
  2. A new unique original document is created with the BG content
  3. The bank adds e-signatures and/or e-seal to the BG document
  4. Once the BG is issued and signed the bank transfers possession of the digital original BG to the beneficiary. There are several options:
    1. Pull from bank (e-mail)
    2. Push to beneficiary (digital key and e-mail)
    3. SWIFT file act
    4. Direct node to node
    5. Upload to preferred platform
  5. A verifiable and exact copy of the original BG is sent to the applicant

Amendment

guarantees-amendment
  1. The beneficiary amends the BG by adding content to the original
  2. The beneficiary invites the bank to sign/seal the amended BG.
  3. The bank signs/seals the amended BG, without the beneficiary giving up possession of the original
  1. The beneficiary invalidates the BG
  2. A new BG is issued and signed/sealed by the bank
  1. The beneficiary transfer back possession of the BG to the bank (can add amendment before doing so).
  2. The amendment is made by the bank (if not done by the beneficiary), then the new version of the BG is signed/sealed and possession is sent back to beneficiary

Claim

guarantees-claim
  1. The beneficiary sends the claim with a copy of the BG and/or a proof of possession (e-mail)
  2. The bank checks validity of the BG and/or proof of possession on own node or public notary
  3. The bank informs applicant and issues own claim against applicant
  4. The bank pays the beneficiary if it is a valid claim
guarantees-termination
  1. The beneficiary invalidates the BG either on its own node or via traceoriginal.com
  2. The invalidated  BG is e-mailed to the bank 
  3. The bank verifies invalidation of the BG and archives it
  4. The applicant is informed
  1. The beneficiary transfer possession of the original BG back to the bank
  2. The bank invalidates the BG and archives it
  3. The applicant is informed