Uniform Rules For Demand Guarantees - URDG

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DEFINITION of 'Uniform Rules For Demand Guarantees - URDG'

A set of rules developed by the International Chamber of Commerce (ICC) and adopted in 1992. URDG provides a framework for harmonizing international trading practices and establishes agreed-upon rules for independent guarantees and counter-guarantees among trading partners. The guarantees specify uniform practices for securing payment and performance in worldwide commercial contracts.

INVESTOPEDIA EXPLAINS 'Uniform Rules For Demand Guarantees - URDG'

The World Bank and the United Nations Commission on International Trade Law (UNCITRAL) have adopted the URDG into their standards for financing international trade. The ICC's publication, Uniform Rules for Demand Guarantees, is considered an authoritative guide and reflects international practice in the use of demand guarantees, while preserving the goal of the original rules – to balance the interests of the trading parties and curb abuse in the development of international trade guarantees.

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RELATED FAQS
  1. What's the difference between a bank guarantee and a letter of credit?

    A bank guarantee and a letter of credit are similar in many ways but they're two different things. Letters of credit ensure ... Read Full Answer >>
  2. Why is a Free on Board (FOB) designation important for freight transportation?

    A free on board (FOB) designation specifies whether the buyer is responsible for freight charges and determines the obligations ... Read Full Answer >>
  3. How does the International Chamber of Commerce define the term 'Free on Board' (FOB)?

    The International Chamber of Commerce (ICC) is one of world's largest business organizations and has published a set of trade ... Read Full Answer >>
  4. What determines if an international trade is Ex Works (EXW) or Free on Board (FOB)?

    "Ex works" (EXW) and "free on board" (FOB) are international trade terms that dictate the responsibilities of buyers and ... Read Full Answer >>
  5. How are transportation costs and risks assigned in an Ex Works (EXW) trade?

    An ex works (EXW) trade agreement is part of the Incoterms rules and requires the sellers of goods to make the goods readily ... Read Full Answer >>
  6. What is the distinction between Free on Board (FOB) shipping point and destination?

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