A Research On The Issues Of Protecting The Rights And Interests Of The Issuing Bank Under Letter Of Credit

Under the payment of letter of credit, which is treated as an important payment method and financing instrument during international trade settlement, issuing bank is playing a significant role. Issuing bank substituting the buyer's commercial credit for reliable bank credit itself, and undertaking the first-payment liability, has constituted the foundation of letter of credit system. So the main point of the paper is to protect lawful rights and benefits of issuing bank at utmost in order to promote the positivism of issuing bank to take part in international trade settlement and financing actions.The paper first analyzes issuing bank's rights and responsibilities with different legal relationships on different exchange stages under payment mode of letter of credit in detail, discusses possible legal liabilities occurred to issuing bank when carrying out the responsibilities incorrectly. Basing on aforementioned discussions, the author provides some reactions for issuing bank to reduce risks and defend rights. As an emphasis, the authors put great energies to expound such reactions as applying deposit, pledge on bill of lading, trust receipt and legal injunction. Because there is no specified domestic regulation to stipulate letter of credit at present, except a draft made by the High Court, the author makes some suggestions to perfect domestic legal system about the issues of letter of credit according to the research and hopes such viewpoints could be benefit for protection of the rights of issuing bank.