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Letter Of Credit Fraud And Risk Precaution And Law System Research Of Civil Relief

Posted on:2008-10-23Degree:MasterType:Thesis
Country:ChinaCandidate:S ChenFull Text:PDF
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The letter of credit has substituted the commercial credit with banking credit, the issuing bank has inevitable responsibility for payment to the beneficiary, the innovated financing improves the international trade with security as well as efficiency. It has not only protected the businessman's legitimate rights and interests, but also reduced the risk of international trade.However, any way is not perfect, while the mechanism of the letter of credit (L/C) plays a great role; the Abstract Independence Principle of this mechanism is utilized by some illegal businessmen for cheating purposes. Additionally with complexity of international trade, L/C fraud expends much seriously. For restriction purpose, Exemption of Fraud is acknowledged with foundation of Abstract Independence Principle insisted by nationals. The banks refuse payment and/or acceptance of draft with fraud consideration and/or stop payment order from court. Hence, the principle of Exemption of Fraud has been setup and developed. L/C fraud occurs occasionally in situation of international trade of our nation, which always results in serious losses of the companies and banks. Furthermore, with membership of WTO, further opening and international trade development, risk of L/C fraud becomes serious in China. Therefore, it is necessary to perfect the relevant laws of our country. At the same time,it is also of important realistic meanings to reinforcing the study of the letter of credit and take precautions against risk of the L/C fraud.This thesis has been illustrated in the following five aspects.In the 1st part, this author mainly analyzes the definition and the working mechanism of L/C as a basis of further analysis. In the 2nd part ,this author states the definition ,category, main causes and harmfulness of L/C fraud. From relevant regulations and laws, the thesis explains the definition of L/C fraud, summaries the categories, and analyses the types of fraud with fail L/C, true L/C, soft L/C and transferable L/C, the causes and risk deriving from each category. The author deeps into the essential cause of fraud, Abstract of Independence Principle. In the 3rd part, upon the importance of anti-fraud for L/C, the author analyses trader of L/C and relevant preventive measures adopted by bank. In the 4th part, the author explores the ways of relief of civil law for L/C fraud upon the Exception Principle, and extends the two ways of relief, including rights of refusal for payment reliabilities under L/C, and applicant applies order of court to stop payment of issuing bank. In the 5th part, the author analyses questions in the law system of the Exception Principle, and concludes enhancing recommendations. The author also makes clear the law frame of L/C fraud in China nowadays, briefly appraises the present situation of legislation in our nation, focusing on the < Announcement of the Supreme People's Court of the People's Republic of China > implemented on 1 January 2006, and discusses the problems may derive from. Then the author profound some suggestions to L/C fraud, through the comparative studies of civil relief law of domestic and international, adopting advanced procedures, recognition, cognizance segregation of basis transaction disputes and L/C disputes, additional segmentation for Exception of Principle; and the specific countermeasures.L/C fraud is a complex legal phenomenon, and the prevention of it is a great systematic engineering. Absorbing results of previous researcher, The author try to do some helps for relevant legislation, international trader of L/C and bank ,so as to to raise understanding to the issue of L/C fraud and prevention.
Keywords/Search Tags:Letter of Credit, Fraud, precaution, relief
PDF Full Text Request
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