International Trade With A Single Letter Of Credit Risks And Prevention,

Letter of Credit is the most important form of payment and clearing in international trade. It emerges with the development of international trade in 19th century .Clearing with letter of credit is safer than other clearing methods, for when using letter of credit, banker's credit takes the place of commercial credit. That is to say, as long as the document complies with the letter of credit, the bank will bear the responsibility of payment first. Credits separate transactions from sales or other contracts. In the operation of credit, all parties concerned deal with documents instead of goods, In addition, because the parties of letter of credit are in different countries or regions and some illegal businesses occur frequently, the business with letter of credit has increased risks, and some fraud actions appear.With the development of our country's reform and opening-up, China entrance into WTO, international trade develops further and letter of credit will be used in international trade more frequently. At the same time, fraud in letter of credit will occur more frequently. Over recent years, numerous cases concerning fraud in letter of credit have shown the necessity of resolving the problems in this field.This thesis refers to《UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS》(UCP500) issued by International Chamber of Commerce, the related law of P.R.C. Starting from introduction of definition, the process, the characters and advantages of the Letter of Credit, this thesis gave details of various risks both the exporter,importer and the related bank involved in a contract of international trade may encounter. The author put forward original ideas on respective proper preventive measures should be taken.