Research On Risk Prevention Mechanism Of Independent Guarantee

As a new type of guarantee,independent letter of guarantee has the characteristics of independence,irretrievability,surface examination and documentary nature,and is widely used in foreign trade with its function of "payment first,dispute later".Independent guarantee mainly involves the applicant,beneficiary and the guarantee bank.It is based on the bank as the third party guarantee subject,and independent of the underlying transaction relationship,after the beneficiary submits the seemingly consistent documents,the bank undertakes the first,unconditional and absolute payment obligation.In the independent guarantee,the legal relationship between the guarantee bank and the beneficiary is the core of the whole independent guarantee relationship.The undertaking bank is entitled to the defence of the independent guarantee itself,but not of the extension of the underlying contract.No matter how valid the underlying transaction contract is,the guarantee bank must fulfill the payment obligation to the beneficiary in conformity with the presentation of documents.Independent letter of guarantee is a "double-edged sword",whichnot only has the "relative independence" of subordinated guarantee contract,but also abandons its attached characteristics and has a more complete independence.However,due to the legal risks of beneficiary fraud,court stop payment and independence identification,domestic laws and international practices of various countries adopt a relatively cautious attitude.When there is fraud in the independent guarantee,how to identify the fraud,when to examine the basic contract,to what extent to examine,how to protect the third party,the burden of proof and evidence of fraud,how to apply the stop payment order and other issues have brought confusion to the judicial practice.In view of the fraud risk of letter of guarantee,it is proposed that the guarantee bank should be given the right of direct dishonor and the fraud exception system should be improved,especially the third party in good faith should be protected.In view of the abuse risk of stop payment order,the paper puts forward the applicable conditions of stop payment,establishes the liability of malicious application for stop payment,clarifies the scope of damages,and insists on the principle of equity.In view of the risk of independence identification,the principle of limited review should be adhered to when examining the underlying transactions and documents,the breadth and depth of the review of the underlying contract should be limited,and the boundary of the review should be clearly defined.