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Term meaning inseparable from the financial instrument. This gives a guarantee and is abstracted from the performance of the underlying trade contract: Article 31 of the 1930 Geneva Convention of the Bills Of Exchange states that the aval can be written on the bill itself or on an allonge. US Banks are prohibited from avalizing drafts.
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A third party guarantee, especially by a bank, that ensures payment on a note, bond, or other debt instrument in the event of default. This is practiced in Europe more often than in the United States, as American banks have tighter restrictions on bank guarantees.
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