"Under the URDG, demand guarantees are completely independent of any underlying relationship between the applicant and beneficiary, and subject to only the terms contained in it, thereby limiting the liabilities and rights of the guarantor bank to only matters it voluntarily commits itself to. In this context, demand guarantees differ from true guarantees in that, a true guarantee is an undertaking or promise (of a secondary nature) made by a bank to pay a beneficiary in the event that an applicant fails to pay, upon proof of default. Whereas, a demand guarantee is an undertaking or promise (of a primary nature) made by a bank, to pay the beneficiary on its first demand for payment, in the event that an applicant fails to pay, without proof of default. The maxim "pay first and argue later" best describes one of the key principles underlying demand guarantees." - Tracy Izekor
In May, 2016 the Nigerian government announced the deregulation of the oil and gas sector which involved the removal of fuel subsidy 1 and the freedom of oil importers to source for foreign exchange ( FX) from the secondary sources to facilitate their international trade.
http://www.ebsi.ie - Vincent O'Brien explains the importance of URDG 758 trade finance rules during a seminar with Dubai Chamber of Commerce. Further seminar...
The International Chamber of Commerce (ICC) published a new guide on international standards for demand guarantee practice that came into effect on 1 July 2010. The ICC's new Uniform Rules for Demand Guarantees (URDG758), which comprise a set of contractual rules applicable to demand guarantees and counter-guarantees, supersede the first 1992 rules (URDG458).
ICC's URDG balance the interests of different parties and provide safeguards against abuse in the calling of guarantees. This 2010 revision is a new set of rules for the twenty-first century and will help secure uniform practice worldwide.