After establishment of letter if credit by Indian importer, can foreign exporter refuse to accept this.. if so, under what ground and clauses of UCP?
SIVARAMAPRASAD KAPPAGANTU (Retired Manager) 27 December 2021
Normally, a Letter of Credit is issued by a bank based on an agreement between the Indian Importer and overseas Exporter where all terms and conditions are agreed upon. There is a possibility of refusal to accept LC only in the event the LC is not in conformity with the already entered agreement. Therefore you may seek the reasons for refusal to accept the LC from the overseas Exporter.
Kawmini Liyanage 29 December 2021
In order to answer your query, according to the letter of credit rules laid down in UCP 600, Article 10 (a)
it should be issued in an irrevocable format. Hence, it cannot be cancelled. Unless written confirmation of the beneficiary stating such letter of credit will not be utilized has been granted. If the letter of credit involves confirmation by another bank, such bank’s written declaration is also necessary to proceed with the cancellation.