Study On The Legal Problem Of Documentary Credit Fraud

Since the letter of credit (L/C) came out in 18th century,it has substituted bank credit for commercial credit.From then on,L/C spread all over the world and became the most leading and common mode of payment, which contributed to the development of international trade. So L/C is regarded as "life-blood of international commerce"for a long period. However, L/C abstract independent principle gives rise to the chances to illegal merchants, and there exists the complexity of international in addition. In this way, L/C fraud is becoming increasingly popular.In import-export trade of our country, there frequently occurs L/C fraud, which brought great losses to Chinese enterprises and banks, shaked the confidence given by L/C of buyers and sellers and caused the tremendous damage of international trade activities. Therefore, profoundly studying the related legal issues of L/C, stregthening the prevention consciousness and measures of respective party involved in trade of L/C, at the same time, further establishing and perfecting the related legal system,and reinforcing the legislation,enforcement and usage issues of law ,which have an important theoretical and realistic significance in developing import-export trade of our country.This article has illustrated the subject in the following four aspects. In the first part, the concept of credit, L/C obligations of the parties and their rights, basic principles, and the role of L/C are illustrated. And this part discusses L/C fraud, type of L/C fraud, cause and hazard of L/C fraud and its present situation. Part 2 are the prevention measures of L/C fraud in advance,which mainly explains the self-prevention of L/C traders, the prevention of bank and the international prevention of L/C fraud etc.. Part 3 are the relief measures of L/C fraud afterwards, which mainly explains the applicable exceptional principle of L/C fraud and relief afterwards. Part 4 are the legislation, practice, thoughts and suggestions of L/C fraud in China. From the related legislative status quo of L/C fraud in China, this part analyzes the existing problems of this course, and puts forward the legislative thoughts and suggestions of L/C fraud. Therefore, based on the combining method of theory and practice, and legal study on L/C fraud at the core, this article studies the fundamental theory of L/C, relief measures in advance and relief of measures afterwards etc.In my opinion, only by recognizing the legislative status quo of L/C fraud and existing problems, perfecting the legislation of L/C, enhancing the anti-fraud consciousness and ability owned by the parties involved, we can protect legal rights and interests of the parties, completely eradicating the occurrence of L/C fraud.