Understanding the Permitted Guaranty Holder: Key Legal Insights
Definition & Meaning
A permitted guaranty holder refers to specific individuals or entities that are eligible to hold guarantees under certain financial regulations. According to the relevant legal framework, a permitted guaranty holder can be:
- An individual who resides in the United States.
- A corporation that is incorporated, chartered, or otherwise organized in the United States.
- A partnership or another legal entity that conducts business in the United States.
Legal Use & context
This term is primarily used in the context of financial regulations related to foreign military sales loans. It is relevant in areas such as finance and international trade, particularly when dealing with guarantees for loans provided by the Defense Security Assistance Agency and the Federal Financing Bank. Users may encounter this term when filling out forms related to loan guarantees or when seeking to understand their eligibility as guarantors.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A U.S.-based corporation applies for a loan guarantee to support its international sales of military equipment. As a permitted guaranty holder, it meets the requirements set forth by the Defense Security Assistance Agency.
Example 2: An individual who is a U.S. citizen and resides in California acts as a guarantor for a loan taken out by a partnership involved in defense contracting. (hypothetical example)
Relevant laws & statutes
The primary regulation governing permitted guaranty holders is found in 31 CFR 25.100. This regulation outlines the qualifications and definitions relevant to loan guarantees in the context of foreign military sales.