| As the pattern of World Trade gradually integrated, regional trade has came into existence. How to make the settle accounts becomes a necessary problem which needs the businessmen to consider about. From the end of eighteen century to the beginning of the nineteen century, as a kind of settlement, and the most important instrument of payment in international trade and finance transactions, the letter of credit successfully converted the commercial credit into the bank credit between the two parties of the contract. As a result of that, the risk of the seller has been reduced greatly in the international trade settlement.The essential reason why the credit system could be developed very well is that it pursues the Independence Principle. The Independence Principle is that when there is a contract about the international trade, the party of this contract make a deal,which is they use the Letter of Credit as a payment tool,the buyer ask a Letter of Credit from the local bank, if the Letter of Credit made,it is separate of the basic contract. The unique value of the Credit Independence Principle makes the settlement of accounts safe and efficient in international trade. As the proverb goes,every coin has two sides. What’s more, as the relevant legislation isn’t perfect, there are varieties of fraud phenomena in the using of credit. In order to regulate credit system and reduce the emergence of fraud, the businessmen create the exceptions of the Credit Independence Principle which named Fraud exception. Fraud exception means that the Credit Independence Principle is no longer applicable in the credit transaction when there is fraud behavior. The bank could not pay for the money if there are some different points in the letter of credit.The principle of fraud phenomena is oppsite of the Independence Principle.but makes the principle of Independence work better.It could be better if work with the Independence Principle.If there are some fraud phenomena we should pay more atteneion on them.With the development of international trade,there will be more fraud phenomena and some cases.we have no special law to regulate this situation.as a lawer we should be work harder to find way to sovle this problem and make the trade more frequent. |
