URDG 758
URDG 758 is the ICC Uniform Rules for Demand Guarantees, 2010 revision, ICC Publication No. 758. The rules set international standard practice for demand guarantee and counter-guarantee transactions when the parties expressly incorporate them. URDG 758 has been in effect since 1 July 2010 and was officially endorsed by UNCITRAL in 2011.
URDG 758 use on bank export finance desks
On EF desks, URDG 758 is the common rule choice for independent bank guarantees that support bid, advance-payment, performance and retention obligations under export and project contracts. A bid bond, advance payment guarantee or performance bond issued subject to URDG 758 gives the beneficiary a documentary demand right against the guarantor that is independent of the underlying contract, subject to the guarantee text and the rules. Indirect structures use counter-guarantees between banks when a local instrument must be issued in the beneficiary's market.
ICC materials state that the URDG, first adopted in 1991, balance the legitimate interests of applicant, guarantor and beneficiary, and that the 758 revision is a fuller rewrite rather than a light update. Recognition by bankers, traders, FIDIC and the World Bank is part of the publication's stated institutional footprint.
Mechanics: independence, demands and fixed time periods
URDG 758 articles cover application, definitions, issue and effectiveness, independence of guarantee and counter-guarantee, documents versus goods or performance, non-documentary conditions, advising, amendments, presentation, requirements for demand, examination, currency of payment, extend-or-pay demands, reduction and termination, force majeure, transfer and governing law. Appendices supply model demand-guarantee and counter-guarantee forms.
Significant 758 changes highlighted by ICC include:
- new definitions and interpretation rules
- treatment of non-documentary conditions, asymmetrical guarantees, counter-guarantees and incomplete presentations
- fixed periods in place of "reasonable time" for examining demands, extending guarantees and suspending payments
- a force majeure provision that triggers a thirty calendar day extension
- a clearer examination process and an extend-or-pay roadmap
Boundaries versus UCP 600 and ISP98
URDG 758 is not a substitute for UCP 600, which governs commercial documentary credits that pay against shipping and other commercial documents. It is also distinct from ISP98, which is written for standby letters of credit. Market practice may still issue a standby subject to ISP98 or UCP 600 to perform a guarantee-like function; the governing rule set must match the instrument the parties intend. As with other ICC banking rules, URDG 758 applies only by incorporation and remains subject to mandatory national law on fraud, sanctions and capacity.