Guarantees: The Silent Lifeline of Global Trade

In today’s increasingly globalized economic context, legal security is a crucial element to ensure trust in international commercial transactions. A fundamental pillar that provides this security are guarantees, a tool that has established itself as one of the preferred mechanisms to mitigate risks associated with cross-border commercial operations.

Every year, around $1.5 trillion of international commercial transactions are conducted with the trust and security provided by guarantees. These, as guarantors of payment and performance, have become the connecting thread that keeps economies and companies together in the complex fabric of global trade.

The Crucial Role of Guarantees in International Trade

Guarantees, also known as bank guarantees, act as a promise by a financial entity (guarantor) to assume the financial obligations of one of the parties (guaranteed) in case it cannot fulfill them. In the world of international trade, this guarantee can be crucial to ensure the fulfillment of contracts and to provide peace of mind to both parties.

They provide a crucial safeguard against contract non-compliance, financially covering one of the parties if the other cannot meet its obligations. This protection is especially valuable in international transactions, where different legal frameworks can generate uncertainty. Knowing that there is a financial entity willing to back the counterpart in case of non-compliance can make the difference between the closing of a deal or its failure. This support not only facilitates initial negotiations, but can also be key to maintaining long-lasting and stable commercial relationships.

Statistics from the International Chamber of Commerce demonstrate the scope and influence of guarantees in world trade. According to their latest report, about 20% of all international commercial transactions involve some type of guarantee or guarantee. In addition, a study by the World Bank found that companies that use guarantees are up to 60% more likely to obtain new commercial contracts. This shows that guarantees not only provide legal security, but can also be an effective competitive tool.

In addition to promoting trust and contractual compliance, guarantees are particularly valuable for small and medium-sized enterprises (SMEs). According to the OECD, SMEs account for about 60% of employment in developed economies, but often struggle to access international markets due to their size and lack of experience. Guarantees can level this playing field. By providing a performance guarantee, they allow SMEs to demonstrate their solvency and ability to comply with contracts. This can open the door to new opportunities and allow these companies to compete with larger, more established companies.

However, despite their benefits, managing guarantees requires a high degree of specialization and knowledge of financial instruments and the international trade environment. That’s why expert advice is essential for companies wishing to use guarantees in their operations.

In summary, the role of guarantees in promoting legal security and trust in international trade is invaluable.