| Letter of credit is the most important way of payment in the international business, which is called a system created by English talented merchants. It changed the commercial credit into the bank credit and extended functions of bank and facilitated the international trade. Letter of credit is a mature system in the international Payment, it play an important role in this field. Because of the intervention of bank, to some extent, this system have solved the contradiction the buyer and seller don't believe each other because of the distance in international trade, in the meantime, it also provide convenience of the financing for them. The principle of the abstraction and independence of the letter of credit is the foundation that the system of letter of credit exist and develop, this principle required Letter of credit in depended from basic sales contract, according to UCP500, the law connection between Issuing bank and beneficiary is depended on issuing bank and applicant.Because of this independence, this principle is also the key cause that causes the fraud of letter of credit, which provided the opportunities to illegal merchant, so this influences the development of the international trade seriously, the principle is also faced to the challenge. With advantages of high profit, low cost, low risk, L/C fraud begins to overrun. In order to protect the profit of the applicant and the issuing bank and maintain the impartial and reasonable order of international trade, some nations prescribe that there should be fraud exception when there are frauds of letter of credit in the light of maintaining the principle of the abstraction and independence of the letter of credit.Fraud exception is not the denial of principle of the abstraction and independence of letter of credit; it is the complement of the principle of the abstraction and independence of the letter of credit. Then, it is the problem we should concern that when adopt the fraud exception and how to apply the fraud exception. If the term is too strict, we will lose some opportunities of the abstraction and independence of the letter of credit.Our country also adopt fraud exception to protect the profit of the applicant and issuing bank, but sometimes the judges apply fraud exception wrong and even abuse it, which influence the prestige of our banks badly. In the author's opinion, fraud exception is just a kind of means of legal relief. If we abuse it, this will arouse the antipathy of bankers against the fraud exception and shake people's confidence in the letter of credit system. So, we should consummate the legislation and improve judges' character to apply the fraud exception correctly. Moreover, we have been a member of WTO. It has great significance to study the fraud exception.Through comparative, logical and positive approaches, the article integrates the researching methods of jurisprudence, civil law, commercial law, comparative law and private international law. It consists of three chapters. Chapter One: Theoretical analysis of principle of fraud exception the letter of credit. This chapter is divided into two sections.Section 1: To start with defining the letter of credit fraud and types of letter of credit fraud. Then, discuss the basic law connection in the party of L\C, the importance is the connection in Applicant, Beneficiary, Opening Bank. I state the inevitability of the principle of the abstraction and independence of letter of credit. Also bring forward the imitation of principle of the abstraction and independence of letter of credit, which lead to the credit fraud.Section 2: Introduction to the basic theories of principle of fraud exception. On the basis study on civil law and The Uniform Customs and Practice for Documentary Credit, we analyze the foundation of principle of fraud exception. Emphases on the necessity of being about the principle and principle objectively protect the illegal beneficiary that lead to the overflow of the letter of credit fraud.Chapter two: Foreign countries' regulations... |
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