On Qualified Negotiating Bank Status Is Established, Under The Letter Of Credit

Letter of credit is one of the most important settlements in international trade, some scholars even think letter of credit is the blood of international business. But there is no denying that there exists many disputes needed to be resolved among which one of the important one is to affirm negotiating bank' identity. This thesis seeks to make an analysis on the subject.This paper consists of four parts:Chapter One: letter of credit and negotiation letter of credit. This chapter introduces the definition and functions of letter of credit and, the meaning and characteristics of negotiation letter of credit. The author deems that talking about negotiation and negotiating bank should be on the basis of a rough understanding on the operating principles of letter of credit and negotiation letter of credit. Letter of credit is a credit which is indicated as negotiation letter of credit.Chapter Two: negotiation, negotiating bank and its legal relationship with some related parties. How to ascertain the meaning of negotiation evoked much controversy in both theory and practice. In fact, the key to affirm the negotiating bank is to grasp negotiation. Negotiating bank is the bank that is authorized to negotiate draft(s) and/or document(s). L/C law gives negotiating bank not only a particular name but also a definition. Negotiating bank has it own standard for examination of documents. It is a question worthy to think whether a negotiating bank will take the responsibility when the issuing bank determines that a presentation does not comply and refuses to negotiate. Negotiating bank's recourse is also discussed in this section. Compared with other kind of payment, L/C is characterized not only complicated procedures but also a lot of parties involved among which the negotiating bank is the most important. In order to affirm the negotiating bank's identity much clearer, this section also analyzes its legal relationship with some other basic partied including opening bank, beneficiary and advising bank.Chapter Three: Analyze the affirmation of qualified negotiating banks with cases. This section is the keystone of the thesis. There are 3 cases concerning L/C disputes, two of them can not identified as negotiating banks, the third one does. In the first case, the bank which buys in draft(s) and/or document(s) is not the indicated bank, so it fails to be negotiating bank. In the second case, the bank involved do not give the value for draft(s) and/or document(s), according to UCP600, it does not buy in draft(s) and/or document(s), so it can not be a negotiating bank either. In the third case, the bank involved is a negotiating bank because it negotiates in terms stipulated with good intention.Chapter Four: conclusion. Combined the above analysis on L/C, negotiation L/C, and the related issues of negotiating bank in theory with cases in practice, we can conclude some certain qualifications that a negotiating bank should possess.