Letter Of Credit Fraud Case Analysis And Related Legal Issues

As an international form of settling accounts, letter of credit is widely used due to it's highly reliability and relatively independent. As global economic integration progressing, the widespreading letter of credit had done an enormous promotion to international trade. Yet, it is the very principle of independent abstractness, which had left a handle for fraudulent traders, combined with the complexity of international trade, letter of credit fraud is rampant day by day, which had jeopardized international trade severely.Thus, look into letter of credit fraud related legal issues, and discover the shortcomings of our judicial practice, would be significant for the development of our foreign trade either theoretically or practically.This paper attempts to start with typical cases, and discusses deep into letter of credit fraud related legal issues gradually, there are five parts, about twenty thousand words:Part 1, presents the cases about to analyze in brief, sketches out the process of trading of the case by drawing the flowchart of it, at the same time, carries out an relatively thorough analysis on the legal relationship of parties of the case. Besides, extracts letter of credit related legal concepts and explain it.Part 2, explains the two fundamentals of independent abstractness and consistency between Letter of Credit And Trading Documents, further analyzes the promotion they had done to letter of credit trading and even, international trading, simultaneously, presents the paradox between the principles and the letter of credit fraud.Part 3, discusses on the principle of exception in fraud of letter of credit, reveals the shortcomings of our related legislation via analyzing related laws and regulations on exception in fraud of UK/USA and China and international common practice made by ICC, combined with cases, discusses how to handle and employ the principle of exception in fraud in judicial practice by our courts. Finally, concludes the applicable conditions of the principle of exception in fraud.Part 4, compares and analyzes the difference between the order of suspend payment of ours and the injunction of UK/USA, combined with cases, analyzes the legal redressing for fraud of letter of credit, emphasize on protection of the third party act in good faith while legal redressing. Part 5, presents the difference between the outward documentary bill and the legal discount on the letter of credit, combined with cases, analyze the influence of the time relationship between issuing bank's acception and the negotiating bank's discount on the employment of exception in fraud in judicial practice.