A Comparison of URDG 758 and UN Guarantee Convention
URDG 758 and the UN Guarantee Convention both address independent guarantees and in many respects their content is similar, but differences exist in their areas of focus.
Bank guarantees play a vital role in international trade and other business transactions. They are used in almost every step of a cross-border transaction between buyer and seller. Though their success started only after World War II, today it is hard to imagine an economic transaction without a guarantee.
Due to the importance of this tool for international trade, it was only logical to try to standardize and harmonize international guarantee practice. Over the past decades, several sets of rules and laws have been introduced (more or less successfully) to the international trade community. This article will concentrate on two sets: the URDG 758 and the UN Guarantee Convention. 2025 is an especially appropriate time as the trade finance world celebrates multiple jubilees: 30 years of finishing the UN Convention; 25 years since its entry into force; and 15 years following the URDG 758 entering into force.
Introduction: Guarantees in International Trade
The United Nations Convention on Independent Guarantees and Stand-by Letters of Credit (UN Guarantee Convention) applies to demand guarantees and consists of codified law primarily aimed at adoption by UN member states.
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