If the creditor does not insure, risks that the debtor does not pay the purchase price or does not pay it on time. Such cases lead to debt recovery litigation, which can be lengthy and related to high costs, uncertain outcomes and the more difficult enforcement of court decisions, if any the debtor has its registered office in a foreign country. The exporter may insure his future claims against such inconveniences with an appropriate international payment instrument or payment security. The method of payment of the purchase price must be specified in the financial clause located in mutual agreement. It must be agreed upon by the contracting parties, as it depends on it the breadth of payment risks, which are classified into two basic groups, namely non-commercial risks and commercial risks. Non-commercial risks, also called political risks, mean either classic non-commercial risks, which include the risks of nationalization, expropriation, confiscation, war, revolution, insurgency, armed conflict, natural disasters and other measures that consequently prevent the buyer from disposing of his property and thus pay the purchase price or to recover the seller’s receivables, and monetary risks as non-commercial risks, including transfer risks (prohibition and moratorium on payments and inability to convert and transfer) and currency risks. Non-commercial risks result in the debtor’s inability to dispose of assets and the inability to execute a foreign exchange transaction, while in the case of the creditor they also result in inability to dispose of assets and the inability or at least limited possibility of debt recovery. Non-commercial risks are difficult to predict or anticipate, as they are the result of an unstable political and economic situation, especially in developing countries. The commercial risks we manage with the instruments presented in this paper are mainly reflected in the insolvency of the debtor, which arises when bankruptcy proceedings are instituted against his property, judicial or out-of-court recovery proceedings, failure to enforce or failure to take any action against him, because there is no possibility of debt recovery.


A guarantee is a form of claim insurance in which, in addition to the debtor, one or more third parties are liable for the fulfillment of obligations – guarantors. The guarantee statement must always be given in writing and by a person with full legal capacity, otherwise the marriage is not binding. The guarantor undertakes to the creditor with a guarantee contract that he will fulfill the valid and overdue obligation of the debtor if the debtor fails to do so. A guarantee can be given for any valid liability, regardless of its content, including non-monetary, contingent or future liabilities. If there are several marriages, their obligation is joint and several. This means that the creditor can demand payment of the entire claim from any of them.  The guarantee can be subsidiary or joint and several. If a subsidiary guarantee is agreed, the creditor will be able to demand fulfillment of the obligation from the guarantor only if the principal debtor fails to fulfill it within the time limit specified in the written request. An exception applies if it is obvious that the principal debtor’s assets cannot be used to fulfill it or if the principal debtor has gone bankrupt. It is characteristic of a joint and several guarantee that the guarantor is bound as a guarantor and the payer and the creditor may demand performance either from him or from the principal debtor, or from both at the same time. The obligation of the guarantor may not be greater than the obligation of the principal debtor. However, the guarantor’s liability may be limited to part of the principal debtor’s obligations or may be otherwise linked to lighter terms.


A mortgage is a lien on real estate. It is the right of the pledgee to repay from the value of the pledged property before all other creditors due to non-payment of the secured claim upon its maturity. It is a non-possessory lien, which means that the encumbered property remains in the possession of the mortgagor, who continues to use it without interruption. The subject of the mortgage is a specific property that serves to secure a specific claim. The mortgage allows the mortgagee to repay from the value of the mortgaged property if his claim is not repaid on time. In this case, the pledgee has priority over all other pledgees’ creditors. It most often arises on the basis of a legal transaction. In this case, it is a contractual mortgage. This can also occur on the basis of a court decision or on the basis of law. In this case, we are talking about a forced or legal mortgage. In addition to a legal transaction or a court decision, an entry in the land register is required for the establishment of a contractual and compulsory mortgage. On the other hand, a legal mortgage is created as soon as the legal conditions are met. This, of course, is also entered in the land register, but in this case the entry has only a declaratory effect.When the creditor’s claim is not repaid within the agreed deadline, the creditor can be repaid from the mortgage. If the contract was not concluded in the form of a directly enforceable notarial deed, the creditor will first have to obtain an enforceable title. He obtains this on the basis of a lawsuit filed, requesting the sale of the pledged real estate. However, if the mortgage is established on the basis of a directly enforceable notarial deed, the creditor may directly file an enforceable motion with the competent court. When a mortgaged property is sold, the creditor is repaid from the proceeds of the sale. A mortgage is not a barrier to selling a property. However, since erga omnes, ie against everyone, has an effect, the change in ownership of the property will not stop. So if we want to buy a property that is encumbered with a mortgage, we must first obtain assurance that the mortgage will be canceled. Mortgage cancellation is possible on the basis of a cancellation debit note. This is a statement from the mortgagee allowing the mortgage to be canceled. The creditor is obliged to issue it when his claim is paid.


Bank guarantees are the most useful and probably the most effective banking instrument for business insurance. It is intended to insure against risks between business partners in the event of non-payment or non-fulfillment of other contractual obligations. It is a hedging instrument used in both domestic and international business to reduce the risk of default or default. By issuing a guarantee, the Bank irrevocably undertakes to pay any amount up to the maximum amount of the guarantee upon timely submission of a written request from the guarantee beneficiary, together with certain required documentation in accordance with the guarantee conditions. Notwithstanding any objections from the customer of the warranty. As a rule, banks issue irrevocable guarantees, payable on first call. Any such guarantee is an abstract, independent obligation of the bank and is separate from the underlying transaction. Receiving a bank guarantee eliminates the risk of financial and business creditworthiness of your business partner. If the partner fails to meet its contractual obligation, you can claim payment from the bank as the beneficiary, so it is important that the customer accepts a guarantee from a bank that has the appropriate credit rating. The content of bank guarantees is usually in line with the uniform international rules on on-demand guarantees issued by the International Chamber of Commerce. In this way, the customer achieves uniform treatment of the guarantee with all participants in the guarantee transaction (ie principal, guarantor bank, beneficiary) and in different parts of the world, regardless of the specific characteristics of local law. On the other hand, by obtaining a bank guarantee from a bank in favor of its business partner, the customer demonstrates its business seriousness and financial stability. In the case of public procurement or other tenders, in most cases obtaining a bank guarantee is one of the basic conditions for participating in the tender.  


A documentary letter of credit protects the interests of both parties in a business relationship and offers a high level of insurance as a payment instrument, as it transfers the risk of default to the bank. It assures the buyer of the goods that the bank will pay the seller the value of the documents proving that the goods were shipped on time, in the agreed manner and address and in the appropriate quantity. It guarantees the seller payment for the sent goods within the agreed time, if he submits documents that comply with the terms of the letter of credit.


Documentary collection is a collateral instrument that does not include the bank’s obligation to pay, so it is intended for transactions in relatively low amounts and in cases where the parties already know each other. The seller (exporter) ships the goods to the buyer (importer) and submits the required export documents to his bank with clear instructions. The latter forwards them to the buyer’s bank for redemption. The buyer can take over the documents only on the basis of the execution of the seller’s instructions, ie against payment, against acceptance of a bill of exchange or against any other clearly stated condition.


A bill of exchange is a security that is denominated in a certain amount and is also used as a method of securing liabilities. If you need a bill of exchange guarantee, banks also offer a bill of exchange aval. When issuing a bill of exchange, the issuer undertakes to pay the amount of the bill of exchange within a certain time and place to the creditor himself or to be paid by a third party requested by him to pay the bill of exchange amount. With the bill of exchange guarantee, the bank guarantees the payment of the obligations of the acceptor or issuer of its own bill of exchange. In this case, the bank’s obligation is joint and several with the principal debtor.