Avalized Drafts

Query:

Can banks in the US avalize accepted drafts? If yes, than what are the guidelines, and if no, why not?

DCW Responds:

Under US law, an aval is regarded as a form of accessory or suretyship guarantee. The ability of most banks to issue such guarantees has been limited historically and, with respect to trade, restricted by 12 CFR 7.7017 to situations where banks have a substantial interest in the transaction.