Study On Risk Precautions Of Credit Letter Business

With the development of global economy, the degree of trade internationalization becomes increasingly great. In international trade, because of series reasons such as the great distance between two parts, the difference in trade modes and the great gap of economic situation and so on, the two parts of trade must take trade modes of high credit agreed by both sides to ensure economic benefits of both. In the current rules of international trade, the uniform customs of documentary credit is a rule widely recognized by international society, and its appliance is a good way to increase the comment grades of commercial credit with the use of bank credit, and to apply a safe international trade environment. Due to the high degree of credit letter system's international practice, such deep and careful study on this system has been conducted by the international bank circle, law circle and academic circle as the advantage of credit letter, the risks and its precautions of credit letter. However, most of current study just probes into the credit letter system so as to give a comment on the trade activities from the angle of international trade. And the writer of this thesis attempts to re-comb the business of credit letter in terms of legal study methods to find out the effective ways of risk precautions of credit letter.Combined with the UCP600 of Uniform Customs of Documentary Credit, this thesis states the credit risks and its precaution measures in terms of law. The whole dissertation is divided into five parts. The first part introduces the study background of letter of credit, the study opinions on risks of letter of credit both home and abroad, the study significance and the social demand of it. The second part covers the general introduction of letter of credit. The settlement process of letter of credit and its legal characters are analyzed, and the implicate meaning of letter of credit in the legal terms is explained. The risk analysis of business of letter of credit is included in part three. Such aspects are mentioned as the analysis of applicants, issuing banks and the risks among other banks. The risks of appliances of letter of credit is analyzed from the angle of law, so as to find out the deep reasons of the existence of risks and give evidences for the risk precautions of letter of credit. Such points are included in part four as the ways of risk precautions of both parties in letter of credit business, namely, the risk precautions of applicants, the issuing banks, negotiating banks , confirming banks and corporations, so as to give a general control to the risk precautions, to secure the international trade and to enhance the efficiency of international trade.