Legal Research On Letter Of Credit Fraud Exception Principle

Letter of Credit is one of the most important transaction tools in the international trade. It greatly reduces the risk of the seller with the replacement of business credit by bank credit, which not only solves the trust crisis between the buyer and the seller, but also makes the finance process much more convenient. Therefore, Letter of Credit becomes more and more popular worldwide, and is honored with the name of the life line of the international business. However, Letter of Credit is not perfect, which brings the convenience and the risk at the same time. Recently, the fraud of L/C becomes serious day by day, China is also one of the victims. It is an irreversible trend to apply the principle of fraud exception. In this thesis, I make a thorough analysis of this principle, make a complete comparison among the related international treaties, the international conventions, the legislation and judicial practice in the developed countries as well as China. Based on the successful experience worldwide, I make a proposal on how to improve the legislation and judicial practice in China.The thesis includes four chapters as below:The first chapter focuses on the basic theory of the L/C and L/C transaction. Firstly, I introduce the definition of the L/C and L/C transaction, then introduce the whole transaction process of L/C, followed by explanation of the principle of fraud exception and other related principles, finally make an analysis from the aspects of the legislation of developed countries, international treaty and convention and our legislation.The second chapter is about the establishment, application and the development of the principle of the fraud exception.The third chapter is about the application and exception of the fraud exception. China plays an important role on international trade, we suffers a lot from the fraud of L/C, so it is very important to make an thorough analysis of the principle of fraud exception.The fourth chapter is about the advice on how to improve Chinese L/C related legislation and judicial practice. I analyze the current weakness in Chinese legislation and judicial practice and provide advice accordingly from the aspect of criminal law and civil law, meanwhile I also make necessary and workable proposal in judicature.