Bank Instrument Transactions (BG / SBLC)
A Structured Approach to International Financial Instruments
AFETOP operates exclusively within a structured international financial intermediation framework aligned with the expectations of:
- Regulated financial institutions
- Investment funds
- Corporate treasury departments
- Institutional counterparties
Our mandate is to ensure that any proposed Bank Guarantee (BG) or Standby Letter of Credit (SBLC) transaction meets internationally accepted banking, compliance and risk management standards prior to engagement.
We do not operate under informal, speculative or unstructured execution models.
I. Governance Principles
1. Institutional Transparency
All communications relating to the issuance of a financial instrument must occur strictly:
- Bank officer to bank officer
- Through official and verifiable banking channels
- In accordance with AML, KYC and sanctions regulations
Informal confirmations, third-party attestations or non-banking communications are not recognised within our framework.
2. Regulatory & Compliance Alignment
Transactions must be compatible with:
- International AML regulations
- Beneficial ownership transparency (UBO disclosure)
- Sanctions and PEP screening
- Source of funds validation
- Applicable ICC rules (URDG 758 or ISP98, as appropriate)
Compliance is treated as a structural prerequisite, not an administrative formality.
3. Economic Rationality & Risk Allocation
Instrument structures must reflect:
- Coherent risk-weighted pricing
- Clear capital backing
- Transparent cost components
- Balanced allocation of counterparty risk
Financial engineering must withstand institutional credit committee review.
II. Procedural Framework
Structured Issuance Sequence
The acceptable procedural sequence is as follows:
- Execution of a mutually agreed contract
- Formal introduction between issuing bank officer and beneficiary bank officer
- Transmission of BCL or MT199 (if required)
- Issuance of MT799 (pre-advice)
- Receiving bank confirmation of readiness
- Issuance of MT760
- Formal bank acknowledgment / BPU
This sequence ensures:
- Interbank validation
- Transaction traceability
- Counterparty protection
- Operational integrity
III. Risk Mitigation Standards
AFETOP does not proceed under structures involving:
- Informal proof of funds transmission
- Unverified fee arrangements
- Non-bank corporate refund undertakings as primary security
- Clauses preventing legitimate bank verification
Risk mitigation must occur at banking level, not solely at contractual level.
IV. Institutional Positioning
AFETOP acts as an international financial intermediary and structuring partner.
We:
- Are not an issuing bank
- Do not guarantee instrument issuance
- Do not engage in speculative structures
All transactions remain subject to:
- Counterparty qualification
- Compliance review
- Banking feasibility
- Institutional approval processes
V. Engagement Philosophy
We prioritise:
- Bankability over speed
- Structural integrity over volume
- Long-term institutional credibility over transactional opportunism
Transactions aligned with this framework may proceed to structured discussion.
Others may require procedural refinement prior to institutional presentation.
VI. Due Diligence Requirements
Prior to operational engagement or institutional presentation, the following may be required depending on transaction size and risk profile:
1. Legal & Corporate Identification
- Company registration documents
- Shareholding structure
- UBO declaration
- Identification of authorised signatories
2. Financial & Banking Capacity
- Bank Comfort Letter (if applicable)
- Evidence of active banking relationship
- Capacity to support banking-related costs
3. Source and Use of Funds
- Formal declaration of source of funds
- Description of intended use of the instrument
- Economic coherence of the transaction
4. Regulatory Compliance
- AML declaration
- Sanctions / PEP screening
- Absence of material litigation affecting the transaction
5. Instrument Technical Documentation
- Confirmation of applicable ICC framework
- Indication of proposed issuing bank
- Clarification of intended SWIFT format (MT799 / MT760)
These requirements may be adjusted depending on jurisdiction and institutional standards.
Why Institutional Counterparties Require This Framework
Regulated financial institutions and institutional investors require structured frameworks for the following reasons:
Regulatory Protection
Transactions must be defensible before regulators, auditors and risk committees.
Counterparty Risk Management
Formal interbank validation reduces operational and reputational risk.
Traceability & Transparency
Financial flows must remain fully documented and AML-compliant.
Economic Coherence
Pricing and structure must reflect realistic risk allocation.
Institutional Credibility
Intermediaries preserve long-term access to banking networks by adhering to recognised standards.
For structured discussions within this framework:
AFETOP
International Financial Structuring & Intermediation