On The Status Of The Negotiation Bank In The L/C Process

Letter of Credit (L/C), which is one of the main ways of international payments, has important influence in the international trade. As one of the important parties of L/C, the negotiation bank has its special status. But the scholars, who dispute with others intensely, have different opinions about the issue of the negotiation bank's status in the L/C process. The essay systematically discusses the heated disputed issue in order to clarify it and proposes the author's own opinion.Firstly, the essay primarily probes into the negotiation of L/C in order to conclude its definite conception. After that, starting with the theories about the negotiation, by introducing the theories about the negotiation bank's status in the L/C process, the essay seeks for the defaults of them. In the part, the essay makes the conclusion that: the negotiation bank is neither the deputy of issuing bank or the deputy of the beneficiary, nor is it the beneficiary's assignee of credit or the correct bearer according to the normal relation of commercial instrument. Since the status of the negotiation bank in the L/C process couldn't be explained by the previous theories, it's a new and independent theory. On the base of these, it systematically introduces the factors of negotiation bank's status, which refers to its operations, rights, obligations and risks, etc. according to current legislations. The last part of the essay illustrates the significance of improving China's legislation of negotiation bank, and proposes the suggestions to set up China's self-contained legislation for negotiation bank on the base of analyzing the international and foreign legislations.