A silent confirmation differs from a regular ‘with request for confirmation/counter-guarantee transaction in that it does not imply a disclosure of the confirming party, i.e. NLBI, to the bank who issues the Letters of Credit (L/C) or Letter of Guarantee (L/G).
It is usually requested when an L/C does not bear a request for confirmation, however an exporter would like to have additional security that it will receive adequate payment in accordance with the terms of commercial agreement.
NLBI, as a confirming party assumes all the risks which are associated with the underlying transaction from the exporter. Such risks include:

• political risk such as extraordinary state measures, armed conflict or other political incidents;

• transfer risk, which are associated with the inability or unwillingness of the importing state or state bodies to enable or allow execution of payments; e.g. moratoriums or shortages of currency;

• commercial risk representing unwillingness or inability of the importer or the guaranteeing bank to pay in accordance with contractual obligations. Performance risk relating to the underlying contract are excluded and have to be settled between exporter and importer directly.

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