Study On Plights Of Using L/C In Domestic Commercial Transactions

As payment and settlement, Letter of Credit (L/C) is large-scale usedin international commercial transactions. It is significant to ensure thesecurity and complete the transaction settlement. L/C is rarely used asa payment in domestic commercial transactions in China. Scholars from manyfields, such as Economics, Finance and Banking, and the Science of Law,have done a systemic and well rounded research on the use of the L/C ininternational commercial transactions. The study on the use of L/C indomestic transactions are few and far between the former. Therefore, Ichoose this topic, from a legal point of view, focus on the plights ofusing the L/C in China’s domestic commercial transactions. With the desirethat the L/C would be used more wisely in domestic commercial transactionsand restrain the triangle-debts overspreading, analyzed the situation ofL/C used in international commercial transactions and other countries,this thesis provides a few suggestions to the plights.This thesis is divided into three chapters, using a combination ofa comparative method and case analysis method. With the plights inpractice as the entry point, it discusses the causes and countermeasuresof the rare use of the L/C in the domestic commercial transactions. The first chapter introduces the plights of the L/C in the domesticuse. On the basis of the contrast of the situation of using L/C betweenin international commercial transactions and in domestic commercialtransactions, as well as the changes of using L/C in domestic commercialtransactions, this chapter points out the plights of the L/C in thedomestic commercial transactions.The second chapter discusses the cause for the plights of the usingof L/C in the domestic commercial transactions. The discussion isperformed in three different aspects: the barriers of cost and conditions,the obstacles of trading habits and management, the problems of the legalfunction and rules. Account for the legal point of view, the main bodyof this chapter is the discussion of the latter two. Focus on the problemsof the legal function and rules, it expound the institutional deficienciesand conflicts of the using of L/C in domestic commercial transactions,respectively in two different visual angles, from overall system angleand from specific regulations.The third chapter is a reflection on the plights and the cause forthem. The author reflects on two aspects, both market and regulations,provides a few countermeasures to the plights in aim of contribute to agood development prospect of the L/C in domestic commercial transactionsin China.