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Back To Back Bank Guarantee arrangements are commonly used in Indonesia when a beneficiary requires a guarantee from a local Indonesian bank, but the principal maintains its primary banking relationship with an international bank. This document structure is particularly relevant for cross-border transactions, government tenders, and large commercial projects where local bank guarantees are mandatory. The arrangement allows international companies to leverage their existing banking relationships while complying with local requirements. The document includes comprehensive terms governing the counter-guarantee from the international bank to the local bank, the main guarantee to the beneficiary, payment mechanisms, and enforcement procedures. It ensures compliance with Indonesian banking regulations while providing security and clarity for all parties involved.

1. Parties: Identification of all parties involved: Account Party, First Bank (Counter-Guarantor), Second Bank (Guarantor), and Beneficiary

2. Background: Context of the transaction, relationship between the parties, and purpose of the back-to-back guarantee arrangement

3. Definitions: Definitions of key terms used in the agreement, including technical banking terms and guarantee-specific terminology

4. Structure of the Back-to-Back Guarantee: Details of how the back-to-back guarantee arrangement works, including the relationship between the original guarantee and counter-guarantee

5. Terms of the Counter-Guarantee: Specific terms under which the first bank provides the counter-guarantee to the second bank

6. Terms of the Main Guarantee: Terms under which the second bank provides the guarantee to the beneficiary

7. Payment Provisions: Procedures and conditions for payment under both guarantees, including timing and documentation requirements

8. Reimbursement Obligations: Terms for reimbursement between parties, including fees, charges, and payment mechanisms

9. Bank's Rights and Obligations: Detailed responsibilities and rights of both banks under the arrangement

10. Representations and Warranties: Standard declarations by all parties regarding their capacity and authority

11. Events of Default: Circumstances constituting default and consequences thereof

12. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes