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With The Responsibility Of The Issuing Bank Under The Documentary Credit

Posted on:2012-12-24Degree:MasterType:Thesis
Country:ChinaCandidate:G J WuFull Text:PDF
GTID:2206330335998347Subject:Law
Abstract/Summary:PDF Full Text Request
Letter of Credit (L/C), well known as "the creation of business talent", has taken a great proportion in the field of payment in international trade. Among the legal relationships under L/C, the issuing bank plays a role as a link between the applicant and the beneficiary, and is in the absolutely center status. Due to its special role in L/C, there have been many studies on the issuing bank by scholars worldwide.Most studies on the issuing bank centre upon its legal position. For instance, amounts of explosions about the position of the issuing bank and the legal relationships under L/C could be found in books such as Studies on L/C law and practice by Xu Donggen,Studies on L/C law and practice by Zuo Xiaodong and The initial comparison of the legal nature of L/C by Jin Saibo, but there are few systematic analysis focus on the issuing bank's liabilities under L/C. However, the liabilities of the issuing bank keep close ties with the function of L/C. It is because of the issuing bank accepts it's liabilities under L/C that bank credit can successfully replace business credit.Uniform and Practice for Documentary Credits was established by ICC out of the purpose of setting unified rules for operations under L/C and avoiding legal disputes. Rules on the issuing bank's liabilities could be found under Article 2,Article 7-C,Article 8-C and Article 13 of the UCP600. It is widely recognized that the issuing bank's liabilities includes to establish a letter of credit under the applicant's instruction and the rules of UCP; to undertake the first paying obligation and to have it's liabilities for the entrusted banks. This paper makes an overall study of issuing bank's liabilities from the above points, which is composed of five chapters as following:ChapterⅠintroduces the definition and characteristic of letter of credit, list the common procedure of letter of credit, to show the core status of issuing bank under credits.ChapterⅡintroduces the process of issuing the letter of credit, after discussing the nature of the legal relationship between issuing bank and applicant, the author think that the issuer should issue the documentary credit as instructed by the applicant since t has accepted the application.ChapterⅢputs forward the rules of examination for issuer and then discus the relaxed strict compliance set by UCP600. In addition, the author explains the first paying obligation of the issuing bank.ChapterⅣ, during the operation of letter of credit, accession of other banks will guarantee the function of letter of credit. The author analyses the legal relationship between the issuing bank and the entrusted banks, and then sum up it's liabilities for the entrusted banks.ChapterⅤanalyses the risks for the issuing bank in the issuing stage,examination stage and when confronted with L/C fraud, the author gives his suggestions on preventing such risks.
Keywords/Search Tags:Letter of Credit, Issuing Bank, Risk Prevention, Liability
PDF Full Text Request
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