The Back to Back Bank Guarantee is a crucial financial instrument used in complex commercial transactions where multiple jurisdictions or banking relationships are involved. This document, governed by South African law, is particularly relevant when a beneficiary requires a guarantee from a local bank but the applicant's relationship is with a foreign or different domestic bank. The guarantee structure involves one bank issuing a guarantee based on a counter-guarantee from another bank, effectively creating a chain of security. The document includes detailed provisions for demand mechanisms, payment obligations, expiry conditions, and compliance with banking regulations. It is commonly used in international trade, large infrastructure projects, and cross-border transactions where direct guarantees may not be practical or acceptable to the beneficiary. The document must comply with South African banking regulations while potentially incorporating international banking practices and standards.

1. Parties: Identifies all parties involved - the guarantor bank, the counter-guarantor bank, the applicant, and the beneficiary

2. Background: Explains the context of the guarantee, including reference to the underlying transaction and the counter-guarantee arrangement

3. Definitions: Defines key terms used throughout the guarantee document

4. Guarantee Amount and Currency: Specifies the maximum amount of the guarantee and the currency of payment

5. Scope of Guarantee: Details the specific obligations being guaranteed and the conditions under which the guarantee can be called

6. Duration and Expiry: Specifies the effective date, expiry date, and any automatic extension provisions

7. Demand Requirements: Sets out the formal requirements for making a valid demand under the guarantee

8. Payment Terms: Specifies how and when payment will be made following a valid demand

9. Reduction and Release: Details circumstances under which the guarantee amount may be reduced and conditions for release

10. Transfer and Assignment: States whether and under what conditions the guarantee may be transferred or assigned

11. Governing Law and Jurisdiction: Specifies South African law as governing law and designates jurisdiction for disputes

12. Notices: Details how formal communications between parties should be made and addressed