Document background
The Foreign Bank Guarantee is a crucial financial instrument used in international business transactions involving Indonesian parties or interests. It is typically required when a foreign entity needs to provide financial security for projects, tenders, advance payments, or performance obligations in Indonesia. The document must comply with Indonesian banking regulations, including Law No. 7 of 1992 on Banking (as amended) and relevant Bank Indonesia directives. Foreign Bank Guarantees are particularly important in cross-border transactions where the beneficiary seeks assurance from a foreign bank while maintaining the security of Indonesian legal jurisdiction. The guarantee includes specific provisions for claim procedures, payment terms, and validity periods, and may require coordination with a local correspondent bank to ensure enforceability under Indonesian law.
