Utilization of cancelled letter of credit

[berry]

Please help me urgently on this issue. I issued an lc last week. Today i received a swift advice from the advising bank informing that the beneficiary has refused the lc. Should we issue a cancellation?

[afracsis]

under your situation

there is no way an issuing bank could cancel the lc he issued without permission from the beneficialry.
in the meanwhile if the beneficiary has not accepted the lc you issued there is no relationship or liabilities between the issuing bank and the beneficiary.
therefore, you don't have to do anything until the beneficiary asks to amendments on the lc you issued.
until that there is no contractual relationship between you and the beneficiary.

looking foward to seeing oter views..

[shahriar]

i will not feel comfortable to make any comment without having a look at the exact wording of the advice. it it simply say that the beneficiary is refusing the LC, i would prefer to send an acknowledge of the advice indicating that based on the advice we are closing our file. for extra security, one may call back the original credit; especially useful for mail LC. i assume the intention behind the question is to know whether the beneficiary can utilize the LC. in my opinion, no. i would draw and analogy with the "rejection of the amendment" here.

regd

shahriar

[cristiand969]

Beneficiary made it clear that he would not perform under the said LC and this will imply for me that he refuses the undertaking of the issuing bank towards him and, with this in mind credit ceases to exist. I perceive it as much as the scenario when beneficiary refuses an amendment (i.e refuses undertaking from issuing bank under some modifications which could include increase of the amount or extension of credit). I will consider from that moment the credit ceases to exist.
regards
Cristian

[iLC]

i agree with the answers.