American L/C Fraud Exception And Its Reference Value To China

Nowadays, as a way of payment of international trade, letter of credit gradually gains favor of many traders. Letter of credit is a kind of bank's credit, and it eliminates distrust of different parties in a transaction. However, the huge benefit has been tempting illegal beneficiaries to exert fraud on L/C. Such fraud arouses great loss of faithful businessmen and banks. As a kind of means of the legal relief, fraud exception of letter of credit is developing according to L/C itself.America began to use L/C in 19th century and it has accumulated rich experience from L/C practice. In the field of L/C fraud exception, UCC5 and some American legal cases are the learning and imitating objects of many countries.Provisions of the Supreme People's Court on Some Issues in the Adjudication of Letter-of-Credit-related Cases is a commercial legal regulation that links to international practice. It draws much attention from many aspects home and abroad. The rule of fraud exception of the Provisions mentioned above not only refers to American experience within this field, but also considers the reality of our country. It can been foreseen that the Provisions mentioned above will play a more and more important role in protecting merchants and banks'legal benefit.This article will introduce legislation and judicial practice of American L/C fraud exception. It will also compare that Provisions mentioned above with UCC5 and the purpose of comparison is to give some advice to practice of fraud exception.