LC CANCELLED WITHOUT BENEFICIARY'S AGREEMENT?

QUERY FROM PTN IN DCPRO FORUM

Pls urgently let us know yr ideas and the relating ICC ideas on our following case:
– We issued an irrevocable LC in favour of a beneficiary in China with the expiry date in the end of 2009
– The applicant requested us to cancel LC and get back the deposit. They presented to us a certificate certifying that the beneficiary has been stopped business for investigation within 2 years (until 2010)
– We said that we cannot cancel the above LC without the confirmation of the beneficiary and only release the deposit when the LC expire

Thanks a lot

——————————————
COMMENT FROM MR. OLD MAN (N.H DUC)

Hi PTN,

You are right. As per UCP 600 Article 10 (a), LC can not be cancelled without the beneficiary’s agreement.

Please inform the advising bank of the applicant’s request for L/C cancellation requesting them to obtain the beneficiary’s agreement and confirm the same under an authenticated swift message to your bank.

Please also ask the applicant to contact the beneficiary to speed up the confirmation of cancellation if the applicant wants his deposit to be released soon.

If no confirmation of cancellation is received or if no other agreement is reached between the applicant and your bank, the applicant has to wait until the LC expires.

Best regards,
N.H. Duc …