Study Of Legislation Of Letter Of Credit Fraut And Judicial Practice Under The Independence Of Letter Of Credit

Since China became a member of WTO, the imports and exports have been growingrapidly. At the same time, international settlement business has also gotcontinuous development, and the letter of credit as one of the moderninternational settlement tools has been used widely in international trade.According to the statistic dates,80%of international settlement business wasdone by the letter of credit in China. However, because of the feature ofdocuments trade of letter of credit, more and more fraud in letter of creditcomes out in the process of international settlement business. For the reasonthat this kind of settlement business developed later in China than in developedand some developing countries, our banks and enterprises are not familiar withthis tool and they often face a dangerous of being deceived. In early practicesof justice, the court always froze the letter of credit to protect the banksand the enterprises of China, which also made overseas branches of Chinese banksaccused and bear the lawsuit cost of losing. This paper starts with thepractices of justice about letter of credit in China and compares the CommonLaw country with the Civil Law country to find the weakness in legislation ofletter of credit in China and to give some advice about solving these problemsto provide some valuable materials for legislation of letter of credit in China.