RegAlertRule · CBJ · 18 Feb 1999
Memorandum Regarding the Cancellation of Guarantees No. (37-99) dated 18-2-1999
The memorandum clarifies that banks are not legally required to cancel guarantees before their expiration dates and that such premature cancellation lacks a legal basis. It instructs banks to avoid cancelling guarantees prior to maturity, noting that beneficiaries may otherwise demand payment of the principal amount if cancellation occurs early.
Guarantees
Memorandum No. (37-99) dated 18/2/1999
It was noted that some banks proceed to cancel certain guarantees upon the mere reissuance of the original guarantee (before its term expires). However, this action has no legal basis; it is merely a request for them to submit their requests (for cancellation) before the expiry date.
Therefore, we ask you not to cancel any guarantee before its expiry date. If the original was in writing, the beneficiary must notify you in advance in writing and by signature that they waive payment of its value.
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“Subsequent to our memorandum No. (37/99) dated 18 / 2 / 1999 regarding the cancellation of guarantees”
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