Fulfillment of contractual obligations of each party is the basis for successful business. Each party wants to mitigate risks, secure the transactions and be sure that the counterpart will honor the commitments properly. The obligations stated in the contract are to be fulfilled in accordance with the legislation of the Republic of Belarus.
Quite often the commitments aren't fulfilled properly due to external circumstances or low production discipline of the parties.
The Civil Code of the Republic of Belarus outlines a range of methods designed to collateralize the interests of one of the counterparts in case of non-fulfillment or improper fulfillment of obligations by the other counterpart. The list of these methods is rather great (a penalty, pledge, the guarantee, the bank guarantee, a deposit, etc.), and they provide the additional guarantee for the creditor, minimize or halt potential losses and stimulate the efficiency of the debtor.
For that reason BUCE implements new mechanisms and measures stimulating either party to collateralize the contract execution. The Exchange Trade Rules determine several types thereof — deposit, bank guarantee, documentary credit, factoring, documentary encashment, liability insurance for non-fulfillment of exchange transactions, use of exchange warehouse, etc.
The majority of collateralization methods for obligations fulfillment determined by the legislation deal with money obligations — commitments of the debtor to the creditor — based on money transfer from one party to another. The violator of the contract can be either a customer who paid not on time or didn't pay for the commodities or a seller who failed to deliver them. Customer and seller are legally bound by the contract and each of them is connected with the Exchange by the Exchange Service Contract.
Long-term practice of using different collateralization methods determined the exchange deposit as the most efficient one.