Trade Guarantees
Trade Guarantees are a financial obligation which entail payment to a beneficiary as a result of failure of the debtor to fulfil their payment obligation.
- Bonded Warehouse: SARS (Customs) mandates a bond on warehouses storing imported goods to ensure the predetermined duty is paid upon clearance and removal. Failure to pay duties on time results in the Bond being invoked, making the Guarantor liable for the duties.
- Temporary Import & Cross Border Guarantees: Covering goods in transit to another destination, these bonds facilitate duty-free transit. For instance, goods imported from Mozambique and destined for Swaziland, Lesotho won’t incur duty while in transit in South Africa. The Removal in Transit Bond ensures duty exemption until the goods reach their final destination.
- Educational guarantees: The Department of Education, requires all educational institutions to lodge a guarantee with them to cover an institution’s unable to render a course to a student which have paid for the course. A student has the right to approach The Department of Education which will thereafter call on the guarantee and reimburse the students. This type of guarantee is provided on behalf of the training institutions.
- Utility Guarantees: These guarantees are replacing the cash deposit required for an electricity account.
- Logistic Guarantees: These guarantees are replacing the deposit that is required by Transnet for stock being railed.
- Development & Reticulation Guarantees: These bonds are in relation to the development of townships. This bond replaced the cash deposit pledged with the Town Council for the supply and installation of water, sewer reticulation and electrical installation.