Why are sureties and guarantees important for international trade?

The domestic market soon becomes too small for many Belgian and Luxembourg entrepreneurs. When that happens, it is worth looking beyond national borders. However, those who trade internationally discover that new opportunities also come with new challenges. Entering distant export markets and securing contracts requires strong financial and credit management. Sureties and guarantees are instrumental in creating trust between international trading partners. In addition, the intervention of a solvent third party guarantees that the company’s obligations will be met. For large-scale projects, these guarantees are the order of the day and often even legally required. Sureties and guarantees are also crucial for transport and logistics.

 

We asked a few questions to Jeroen van Riet [JVR], Head of Surety & Guarantee at Allianz Trade Benelux

[JVR] "First, this concerns companies with an import or export activity. These companies can be from different sectors, but sureties and guarantees are mainly required in the logistics sector and by capital goods producers. Depending on the sector, the needs of our customers differ. In the logistics sector, for example, these are often guarantees related to customs and excise duties, but also guarantees for waste cross-border transportation and transport licenses. In the capital goods industry, you often see performance guarantees, advance payment guarantees and maintenance guarantees. Whatever you are looking for to do international business safely, we have the right solution."
[JVR] "Thanks to an international presence in more than 50 countries and 5 continents, Allianz Trade can provide guarantees via its own local entities in most of cases. We have also concluded an agreement with more than 800 financial institutions that allows issuing guarantees in countries where Allianz Trade is not present. We offer a wide range of solutions to companies active on the international scene - almost anywhere in the world."

[JVR] "There are many advantages. In uncertain times like the Covid-19 or the war in Ukraine, a company needs more than ever a solid cash management.

  • Credit lines with banks are crucial and are increasingly used. By placing your bank guarantees with an insurer such as Allianz Trade, you do not exhaust your lines of credit with banks and you guarantee optimal management of your cash flow. In addition, you are no longer (only) dependent on your bank in times of crisis.
  • Other advantages are our specialized Surety & Guarantee Managers who offer you a tailor-made solution for each of your guarantees. We issue guarantees without material collateral, only based on a solid financial profile of your company. Allianz Trade is part of Allianz and has an excellent AA rating from Standard & Poor's.
  • Finally, in the last years, Allianz Trade invested heavily in digital solutions to request, manage and deliver guarantees. We can issue your digitally signed guarantee within 5 minutes."