Guarantees to Non Residents
published by admin on Sat, 08/06/2011 - 09:06
- The issue of a guarantee by a resident in respect of any debt or other obligation or liability outside Sri Lanka requires the general or special permission of the Controller of Exchange.
- The Controller of Exchange has permitted Authorised Dealers to issue or renew guarantees or similar undertakings, the implementation of which would involve a payment of Sri Lanka rupees remittable to a non resident or a payment in foreign currency for the following purposes:
- Bid bonds in favour of person’s resident outside Sri Lanka without a limit in respect of exports and other service contracts, subject to conditions stipulated in the tender or quotation as per conditions of the tender.
- Performance bonds in favour of persons resident outside Sri Lanka without a limit in respect of exports or other service contracts subject to proof of the award of the contract and conditions stipulated in the contract.
- Letters of guarantees for purposes other than those reference to item (a) and (b) above up to a value of US$ 500,000 subject to obtaining evidence in proof of the underlying transaction which should be a transaction permitted in terms of our operating instructions to Authorised Dealers or specifically authorised by the Exchange Control Department. Letters of guarantee favouring non residents to be issued at the request of agents resident in Sri Lanka on behalf of their foreign principals upto the value of US$ 500,000, subject to obtaining a counter guarantee or counter indemnity on identical terms from the non resident principal in addition to other terms and conditions stipulated above in respect of letters of guarantee.
- Authorised Dealers may also issue and renew above guarantees and make payment in respect of claims on such guarantees.