I have recently been presented a contract thats requires a POF and a 2% PG. The other party requested a POF in the form of an MT799 (bank to bank confirmation, no blocking or any of that sort of nonsense) followed by presenting 2% Performance Guarantee.

They other party will also issue a 2% Performance Guarantee for the deal from their side.

I'm just curious as to how does this whole 2% PG works? How would one go about acquiring one? Further, who is responsible for deciding if one side has 'failed' and thus hand over the 2% to the other party?

I, personally know all players in the game, and managed to negotiate down a POF in the form of an MT760 to an MT799. They agreed, and stipulated they will present a 2% PG provided we do the same. Unscrupulous parties involved in this deal have been found and silenced, so no worries there.

Your insights are greatly appreciated.

Sincerely,
E.C.