Fraud In Letter Of Credit And Legal Measures

Letter of credit traced back to England in 19th . It has become a very important settlement equipment and financing means. It has come into beings in the process of combining bank's credit with international trade. It is safer, stabler and more reliable than common business credit. And at the same time , it also promotes the development of international trade . Letter of credit turns the obligation of payment from the importer into bank, ensuring the exporter of payment quickly and safely. The way of adding bank's credit to be guarantee solves the conflicts of non-confidence between importer and exporter.Letter of credit offers great convenience for Capital finance between importer and exporter. Nowadays letter of credit has been famed to be "the blood and lifeline of international trade ." It has become an important means of international settlement and finance equipment. It is estimated in ICC (international Chamber of Commerce ) that more than 70% of international business activities take use of the means of credit.Letter of credit was invented more because of its business convenience and easy operation .But it itself can't eliminate the factors of fraud in international trade. The defects of letter of credit may leaves the chances for people who implementing fraud .And because of lacking of international and civil laws , and the ignorance of people in international business, the letters of credit fraud frequently take place in international trade, which seriously shake the confidence of businessmen and hamper the normal development of international trade .So anti-letter of credit fraud is important in international business trade.