Discussion On Legal Liability Of Bank’s Examination Under Documentary Letter Of Credit

In the process of international economic exchanges,in order to solve the distrust between the seller and the buyer and to address the problem of unbalanced capital burden, a form of credit settlement has come into being. It according to the trade contracts of the buyer and sellers, promoted the the global economy’s development and prosperity, and promote the smooth progress of international trade, so it earns a special honor of "crystallization of the business wisdom" and "life-blood of international commerce". At present, different from rising prosperity status of global trade, letter of credit, as a payment instrument in international trade, has a high rate of non-payment,and it cause developed countries have to use other methods of payment, such as transaction on credit, documentary collections business, and the new future cause the international payment trends to be varied development, but the defects of the characteristics of credit system itself is the important reasons in impeding the development of credit, in particular defects in the rules of examination of documents. In credit operations, the Issuing Bank relies on credit stand of itself, after issuing letter of credit in accordance with the application of the applicant,it has the rights and obligations for paying the beneficiary by submitting the complying documents. The development of standards of examination of documents is the key problem of credit operation and the fundamental problem in safeguarding the orderly relationship between the parties,so the payment decision of the bank must be a independent and objective judgment based on the reasonable standards of examination of document. The number of principle of examination of documents holds the majority of the total letter of credit from the international norms of view, and even other standards also has a close relationship with the examination of documents. The theory’s development and the standards of examination’s practice will play a fateful role in the development of letter of credit.In the operation of letter of credit, audit the documents according to the terms and conditions of the credit is the core link to the work of examination of documents, but the standard used to affirm whether the documents are complied with terms of L/C was controversial. Although each country has different ideas in interpretation and application of the standards of examination of documents, but the standard of an Issuing Bank of the Uniform Customs and Practice for Documentary Credits have been widely recognized by most countries and regions of the world. Since the UCP600has been adopted, standards of examination of documents was obviously revised, as an important component of UCP, and it brings a cross-age significance to examination of documents, but on the other hand, these basic rule of L/C can provide chances to L/C frauds. Therefore, with times past by requirement and development in order to strictly guard against L/C fraud, decrease the rate of refusal, guarantee letters of credit transactions can be carried out successfully.For our country, to ensure the safety of the bank document examination work,we should pull ourselves to establish and improve legislative regime, so as to promote sustainable development of international trade.In the research methods, mainly uses the comparative study, the case method and the method of combining theory with practice, to analyze the legal issues of the examination of documents. The structure of this thesis is as follows:In the first part, it mainly introduces the basic concept of examination of documents; the second part mainly describes the relevant legal problems on bank examining under documentary letter of credit,the third part expounded the legal issues of L/C fraud, combined with legislation situation of the foreign country to sum up experience; in the end this thesis concern on the defect of present legislation,aiming to offer proposal to prevent the risk of banking examination of documents. This thesis is mainly research on legal issues of the examination of L/C under UCP600, specify the principle and criteria for examination of L/C, finally, issues recommendations o improve and perfect the legislation of letter of credit, ensure the profit of bank and maintain security of international trade.