Discussion On L/C Fraud And Its Corresponding Legal Issues

Abstract: As the L/C brings us prosperity in international trading, it also takes many problems. In one hand, The special principle of L/C makes the documents transaction possible; in another hand, it causes the L/C fraud. At the same time, its inherent defects of the system generate more difficult for us to prevent L/C fraud. At all times, more and more cases of fraud caused by L/C transaction happened to our economical life. Besides we protect ourselves in transaction, most governments in different countries have taken judicial measures to deter the L/C fraud. The typical one is the application of "the exception principle of L/C fraud". Because of different judicial systems, and different ways to work, the application of this principle can't be the same in so many countries. Especially in our country, judges who are lack of professional knowledge always promulgate injunction at their will, giving the victim unsuitable protection. The result is that the banks break the promise and lost its good reputation. Actually, it is not so easy as the courts work in this way: to examine and determine the cases according to the law mechanically. The rather that, our country is lack of concrete law system for L/C fraud. Therefore, in order to deal with the cases fairly, judges should have professional knowledge, examine and determine evidence according to the law, know the real intention of the law, and use the international convention and abroad prejudication for reference.Herein, this article has five sections. In the first section, it will expatiate on the corresponding issues of L/C fraud, present its characteristics of law and juridical relation clearly. In the second section, we will give out the reasons which cause L/C fraud, and the bad effect of L/C fraud. The third section will tell us the theory and the judicial practice of "the exception principle of L/C fraud". Base on the incorrect judgment, the forth section will discuss that how the court judge this kind of case. Further more, in the last section, we are here opening out the defect of the judicial remedies for L/C fraud. At the same time, we will give out relevant solution. In one word, this article will discuss all the aspects of the L/C fraud, Hope that what we are doing will help people to know the L/C and it's fraud, study the legal problems, realize the defect in our law system, and finally bring us the value for reference.