Study On The Responsibility Of Transferring Bank Under Transferable Credit

In recent years,China keeps an optimistic rate of economic growth,and its foreign trade,import and export are increasing fast among the world,which helps China maintain the global trade goods top status.Letter of credit(abbreviate ‘L/C')is regarded as a reliable settlement method for foreign trade business.As a special form of L/C,the transferable L/C becomes more popular and be used gradually in several fields,which plays a more important roles in the world economic communication.Compared with other bank entities such as issuing bank,confirming bank,etc.,the risk of the transferring bank in the operation of transferable L/C business is relatively small,and the transferred bank does not assume independent payment responsibility for the second beneficiary.It can only pay to the second beneficiary after the original issuing bank has made the payment.However,as the transferable L/C services continue to increase in trade practices,customers constantly have new demands.The slightest negligence in handling will bring great risks to transferring bank.Therefore,it is very important for transferring bank to certain its own responsibilities with transferable L/C.In terms of L/C legislation,the case law countries such as the United Kingdom and the United States have developed integrated jurisprudence and rules.In contrast,the civil law system does not have a unified understanding of the legal nature of the L/C,and there isn't any specific relative legislation.This article aims to discuss the responsibilities of the transferring bank under transferable L/C,which adopts theoretical analysis and case analysis methods,and fully quote the relevant provisions of UCP600,focusing on analyze the responsibilities of the transferring bank,and at the same time analyze the risks faced by the transferred bank and the second beneficiary,and then following the measures to prevent different risks.