Russian law suretyships and guarantees are commonly used in connection with financings in Russia. Under Russian law, a “suretyship” refers to a particular type of instrument that a company (or individual) may issue as credit support for the obligations of another. A suretyship is “accessory” in its nature and does not survive the principal obligation.
Independent guarantees may be issued not only by a credit institution (in which case they are called bank guarantees), but also by any other commercial organisation. An independent guarantee constitutes an on-demand guarantee that is independent from the principal obligation. Russian law also expressly provides that an independent guarantee may include a procedure for increase or reduction of the amount of the guarantee on a certain date or upon occurrence of certain events. However, the guarantor may not reduce the amount of the guarantee at its own discretion.