The classification of a ‘guarantee for payment of delivered goods and services’ according to Annex 1 depends on the characteristics of the guarantee itself.

Annex I paragraph (1) of the CRR mentions that guarantees having the character of "credit substitutes" belong to the "full risk" category. An example of those kinds of guarantees is also given in the Annex: guarantees for the good payment of credit facilities. It can be deducted from that example that some of the features of a credit substitute are that it is an off-balance sheet obligation and that it carries substantively the same credit risk as a drawn direct credit facility.

In contrast, the term “shipping guarantee” refers to off-balance sheet liabilities such as those that allow a customer to take possession of shipped goods before the shipping company receives the title documents (e.g. the bill of lading), indemnifying the shipping company from losses in case the customer has no valid title on the shipped goods.

If the “guarantee for payment of delivered goods and services” cannot be classified neither as a "credit substitute" nor as a "shipping guarantee", then it could be analysed whether it meets the trade finance definition in Article 4(1)(80) CRR, as trade finance off balance sheet items are classified as medium or medium/low risk. If it is not the case, they should be treated under “Other items carrying [full, medium, medium/low, low risk as appropriate]” and, where applicable, “as communicated to EBA”.

See also Q&A 2198.