The Study Of Maritime Fraud On The Letter Of Credit

The letter of credit is frequently used in the international trade. Compared with other trade settlements, letter of credit has eliminated the disadvantage of distrust between the buyer and seller by taking bank credit into it, which contributes the trades. However, it still has several disadvantages, such as letter of credit fraud. There is potential risk of letter of credit fraud from the settlement of the contract to the application of letter of credit, from the carriage of goods to the delivery of the cargo. The paper focus on the letter of credit fraud occurred during carriage of goods by sea.By discussing the letter of credit fraud of carriage of goods by sea, this dissertation is divided into four parts, which are reasons of letter of credit fraud, the form of letter of credit fraud, the identification of letter of credit and remedies.First of all, this dissertation analyses the reasons of letter of credit fraud. This part is made of three portions. First, the dissertation demonstrates the differences between carriage of goods by sea and letter of credit by legislation and documents, which makes it possible in the letter of credit fraud. Second, the characteristic of letter of credit makes the bank focus on the documents rather than the cargo, which makes it easier for the cheater to cheat. Thirdly, the bank is subjective when it checks the documents attaching to the letter of credit. This reason offer a excuse to the cheater on the matter whether the documents conform the letter of credit. The previous study on this matter mainly focus on the greedy of the cheater and the lack of awareness of the victims. However, this paper analyses reasons of letter of credit fraud from the institutional perspective.Secondly, the dissertation classifies the form of letter of credit fraud and divides the thesis into two parts which are bill of lading fraud and soft clause fraud basing on previous study. It also make examples on specific circumstance of the two kinds of fraud. Besides, the dissertation also argues about whether the bank dishonor the letter of credit basing on "unknown clause" in the bill of lading and whether the soft clause is certainly confirmed to be a fraud.Then, the dissertation fully analyses the judging standard on letter of credit fraud on carriage of goods by sea. There are cases about the establish process standard of "material fraud" in America and standard of "material misrepresentation" in UK. It also demonstrates the "exception of letter of credit fraud" in China. The dissertation makes examples on the anti-dated bill of lading. The paper summarizes the standard of "the fraud of anti-dated bill of lading " in the case "Lian Yungang Kou Fu Food Co,. LTD v. Mid-small Bank of South Korea " in 2003, which is used to fit in the "He Bei Xianshi Trading Co,. LTD v. Youli Bank of South Korea and Acetech system Co,. LTD". Owing to lack of the cases about soft clouse fraud, The dissertation also gives advice on the standard of soft clause from the view of theory.Finally, the dissertation suggests several remedies and prevent measures towards marine fraud. In most Bill of lading frauds, the seller cheats the buyer. Thus, the remedies and prevent measures are focus on how to protect the seller. What is worth noticing is that the ICBC starts a new business about marine check that the buyer can check the routine of cargo and vessel, which would help to prevent fraud. The dissertation also demonstrates the difference between countermand of payment injunction and freezing order by the civil order of the case of "Nanyang Dadi Co,. LTD v. SUPRIYA Co,. LTD(India) and China Minsheng Bank" in 2014, in which there are also several other unfitness. The soft clause fraud is different with bill of lading fraud, in which the buyer cheats the seller in most circumstance. Thus, the remedies and prevent measures of soft clause are for the interest of seller.The above is a brief introduction of the dissertation. Wish it would do help in the letter of credit fraud of carriage of goods by sea.