It is a written commitment, issued by the Bank upon request of the borrower (principal), under which the Bank is obliged to pay a certain amount to the principal’s lender (beneficiary) upon the latter’s written request compiled in accordance with the terms of the guarantee.

The Bank guarantee can be used when you intend to:

• goods
• assume a contractual and/or payment obligation
• receive an upfront payment for performance of contractual obligations
• assume contractual obligations undertaking a commitment to ensure the quality of performed works, rendered services or delivered goods
• import goods based on down payment, often needing to apply for a loan for payment purposes.

Bank guarantees issued by ARARATBANK OJSC:

• Payment Guarantee – The Payment Guarantee secures execution of payment under the transaction.
• Advance Payment Guarantee - The Bank undertakes to reimburse the advance payment to the buyer if the seller fails to fulfill its contractual obligations.
• Bid Bond – This type of Guarantee is intended to reimburse the costs incurred by the tenderer if the selected contractor refuses to implement the order, creating a need for the announcement of a new tender.
• Performance Bond – This Guarantee secures proper fulfillment of contractual obligations of the contracting party to the customer.

• Commission fees and postal costs incurred by correspondent banks are charged extra, except for approval fees.
• A commission of AMD 15,000 is charged for consideration of loan application required for issuance of guarantee.
• The tariffs above also apply to Standby Letters of Credit (SBLC).

Guarantee advantages for the buyer (importer)

• The buyer (importer) can import goods with deferred payment (due to the letter of guarantee, cash payment term can be replaced by deferred payment term).
• Due to deferred payment term, the buyer (importer) can pay for the product without resorting to credit facilities.
• The buyer (importer) is provided with an opportunity to reduce expenditures, as the bank guarantee costs incomparably less than the loan.
• The guarantee allows to build more trust with business partners.

Guarantee advantages for the seller (exporter)

• By securing the payment obligations of the buyer (importer), the Guarantee allows the seller (exporter) to be insured against the risk of non-payment by the buyer (importer).
• The Guarantee makes provision for the compensation of possible losses and costs that may occur in the event of improper performance or non-performance of its contractual obligations by the winning bidder, contractor, service provider or supplier.
• The seller (exporter) can make a more competitive market offer than its competitors by selling (exporting) the product on deferred payment terms.
• By making a competitive offer, the seller (exporter) can ensure greater consumption and therefore increase the market share of its company.
• The Guarantee allows to minimalize the risks involved in the transaction.

DOCUMENTS REQUIRED FOR THE ANALYSIS OF LEGAL STATUS AND FINANCIAL POSITION

1. Loan application;
2. Decision of the authorized body on loan disbursement and pledge of property;
3. Copies of founding documents – the Charter, with its further amendments and supplements, the State Registration Certificate with inserts, including the insert with information on the company director, the tax code (TIN);
4. Statement issued by State Registry on the amendments to the Charter, director and shareholders, including a statement issued by Central Depository (registry keeper) for open joint stock companies and a statement issued by shareholder registry keeper for closed joint stock companies;
5. Copies of the passport and social security card of the director and shareholders with a stake over 25%;
6. Written statement on owners, participants, shareholders and related persons: first and last names (title), business and legal addresses, all types of business activities. For the purposes of this Procedure, persons stipulated in Article 8 of the RA Law on Banks and Banking shall be considered related persons;
7. Copies of documents enabling operation in the field, such as licenses, certificates, etc.,
8. Statement issued by territorial tax inspectorate on outstanding liabilities towards budget (upon request);
9. Statement on receivables and payables (with detailed breakdown upon request);
10. List of fixed assets with balance value, balance of commodity stocks, such as raw material, other materials and finished products (upon request);
11. Financial statements for the previous reporting period (VAT, social payments, income tax);
12. Statements on bank account turnover within the past 12 months upon availability of accounts in other banks;
13. Effective contracts and agreements on sale, supply, lease, etc., as well as import and export invoices;
14. The most recent inspection act by territorial tax inspectorate or auditor opinion (upon request).

PLEDGE OF REAL ESTATE

1. Ownership certificate (original);
2. Grounding document on right of ownership (upon request);
3. In case of pledging property of a third party, copies of founding documents — the Charter with its further amendments and supplements, the State Registration Certificate with its inserts, including the insert on information on the company director, tax code and decision of the authorized body on pledge of property;
4. Statement issued by territorial subdivision of the State Committee of Real Estate Cadastre under the RA Government regarding restrictions on the property to be pledged (such statement shall be provided upon positive lending decision);
5. Appraisal report by a holder of a respective license.

PLEDGE OF OTHER PROPERTY

1. List of property, with specification of the unit of measure, quantity, balance sheet value and acquisition documents;
2. For pledge of vehicles, vehicle registration document and certificate of title (original copy);
3. In case of pledging property of a third party, copies of founding documents — the Charter with its further amendments and supplements, the State Registration Certificate with its inserts, including the insert on information on the company director, tax code and decision of the authorized body on pledge of property;
4. Appraisal report by a holder of a respective license (upon request).

OTHER ADDITIONAL DOCUMENTS DEEMED NECESSARY BY THE BANK

1. The Bank may require to have the collateral insured against the risks of loss and damage and submit documents in this regard;
2. Other additional documents upon request.

LIST OF DOCUMENTS REQUIRED FROM REPEATED BORROWERS WITHIN THE MASTER LOAN CONTRACT FRAMES

1. Loan application;
2. Decision of the authorized body on loan disbursement and pledge of property,
3. Statement from on the amendments to the Charter, director and shareholders,
4. Statement on receivables and payables (upon request);
5. Financial statements for the previous reporting period (VAT, social payments, income tax)

Other additional documents upon request.

The customer is required to submit original copies of the documents above or duly verified copies thereof.