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Lawfue Stuely On Fraud And Prevention Of Letter Of Credit

Posted on:2003-06-08Degree:MasterType:Thesis
Country:ChinaCandidate:B ChengFull Text:PDF
GTID:2156360092965462Subject:International Law
Abstract/Summary:PDF Full Text Request
Letter of credit (L/C) is a main legal instrument of international settlement which is widely used in international trade, It plays a more and more important role in economic activities. In fact, L/C means any arrangement whereby the issuing bank, at the request and on the instructions of the applicant, is to make a payment or a promise of payment to a third party (the beneficiary) against stipulated documents, provided that the terms and conditions of the credit are complied with. According to UCP500, L/C has these legal characteristics: it's a conditional acceptance of payment by the issuing bank; it's an independent legal document; It represents a purely documentary transaction. The basic parties of L/C legal relation include the Applicant, the Issuing Band and the Beneficiary. The other parties include the Advising Bank, the Negotiating Band, the Confirming Bank, the Paying Bank and the Reimbursing Bank, etc. Within the three basic parties, the rights and duties between the applicant and the beneficiary are subject to the written the applicant and the beneficiary are subject to the written commercial contract between them, the rights and duties between the applicant and the issuing bank are subject to the application provided by applicant to the issuing bank, and the rights and duties between the issuing bank and the beneficiary are subject to the L/C. The commercial contract, the application and the L/C are interdependent in content, and independent in law.According to above-mentioned legal system about L/C, the rights and duties of each party are clear. But sometimes somebkdy may want to embezzle the others' goods, money or loan without consideration, and intentionally make a false impression or hide the truth to seduce the other parties to rely on the wrong knowledge and lose their property or rights. This is L/C fraud. Broadly saying, it means the fraudulent conduct about all the L/Cs, including documentary L/C and standby L/C. Narrowly saying, it only means the fraudulent conduct about documentary L/C, which is what this paper discusses. The L/C fraud is very harmful. It not only makes economic losses of theIVinternational trader, but also damages the order of financial management and international trade. So it's very necessary to analyze the L/C fraud.There are many kings of L/C fraud. Subject to the from of the fraud, there is forging of L/C, forging of documents," soft clause "L/C, etc, Subject to the actor of fraud, there are fraud made by the beneficiary, made by the applicant, made by the beneficiary and the carrier, made by the applicant and the issuing bank, and made by the applicant and the beneficiary, etc.There are many causes of the L/C fraud. We can analyze the causes from the subjective side and the objective side. From the point view of subject side, one is fraudulent conductors' greed, the other is the victims' lack of awareness of self-protection. It is hardly for violators to make the fraud without flaw, so people can take some preventive measures. But if the victims' awareness is not enough, it will promote the fraud. For the objective side, there are two causes too. One is about the L/C legal system itself, the other is about other factors. In the former field, the "independent, abstract" rule and the "strict compliance" rule of L/C have flaws for violators. The risks of these rules is serious, especially for the buyer, if the seller has the intention of fraud, he can use the forged documents "legally "so as to embezzle the price. The complexity of the legal relations among the parties of L/C provides a big space for the L/C fraud. As for the other factors, we can find that the preventive abilities of the traders and the banks is not enough, which makes the fraudulent intention can easily become a fact. There are many brokers in international trade, and there are many transferable L/Cs which is used. All these increase the possibility of L/C fraud. Because L/C frauds are not treated as the violent crime, the legislation and the punishment in this field of the countries...
Keywords/Search Tags:letter of credit, issuing bank, delivery order(B/L), fraud
PDF Full Text Request
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