Measures Research Of Letter Of Credit Cheating And Anti-cheating

Letter of credit is a payment way produced on credit crisis for commercial credit. The letter of credit issued by bank is easy to be accepted by people because the bank has much money and high reputation, the payment way of letter credit is adopted by people commonly. Letter of Credit is a common settlement for international trade, it has been most reliable and play very important role in foreign trade because of the bank's credit intervening. But since the bank only check the face of settlement documents, not the goods itself, some of illegal business persons have a chance to cheat and the swindling cases of Letter of credit often have been happened. The crime of letter of credit cheating will be effective contained only depending on further investigation for trader's natural ability, norm business operating procedure, improve the quality of international traders, as well as laws.This article use the way of case to analysis the reasons and forms of Letter of Credit cheating ,and points out the measurements of avoiding Letter of Credit cheating.The results of this article research are to analysis the reasons of Letter of Credit from the three features of Letter of Credit.The three features of Letter of Credit are: Letter of Credit is a bank's credit; Letter of Credit is a self-sufficient document depending from the Sales Contracts; Letter of Credit business is a pure documents business.The reasons of Letter of Credit cheating are: the limitation of Letter of Credit itself makes banes have a chance to cheat. Letter of Credit transaction follows two basic principles: absolute nonobjective and strict compliance principles, this two principles is the main reason for causing Letter of Credit cheating; much profits makes many speculators to do Letter of Credit cheating; and because the bank's negotiation documents have not stable forms, the banes can forge them; it increases the possibilities of Letter of Credit cheating to have many middleman as well as large usage of transferable Letter of Credit; it is one of the reasons for Letter of Credit cheating occurred that the foreign traders have lower quality and the cheated persons have lower sense of precaution. Through the analysis for the reasons and forms of Letter of Credit cheating, we have summarized the following measurements:一,the precaution of foreign traders for themselves: be careful to choose the trade partners; sign the sales contracts carefully; to check the Letter of Credit according to UCP600; to investigate the voyage and whereabouts of the delivered goods; to stress and inspect the shipment and inspection of goods; improve the quality of businessmen.二,the precaution of banks for the Letter of Credit: to do better for the credit investigation and to supply consultancy for the contacting banks and applicants; to examine the Letter of Credit and documents strictly;三,To set up the international system for precaution of Letter of Credit cheating; To build up the relative laws and international practices and international checking systems; use the electric documents step by step.With the strength of banks examining and the improvement of businessmen's quality, as well as the improvement of the sense of precaution for Letter of Credit cheating in the world, it becomes less and less for the case of Letter of Credit cheating in recent years. But we can not pay more attention to it, we have to study and research the UCP600 and the knowledge of international trade and settlement, check the Letter of Credit and documents carefully, stress the credit investigation for the trade partners, and to treat strictly for each business, we will be successful in the trade market to know each other.