A Study on the Relative Bank's Judgement and the Remedy against the Fraudulent Demand under a Letter of Credit System

2013 ◽  
Vol 28 (1) ◽  
pp. 5-22
Author(s):  
Jin-Ik Chae
Keyword(s):  
Credit System ◽  
Letter Of Credit

scholarly journals PREVENTIVE MEASURES TO MITIGATE THE RISK OF FRAUD IN LETTERS OF CREDIT TRANSACTIONS IN MALAYSIA

2021 ◽  
Vol 12 (Number 1) ◽  
pp. 27-49
Author(s):  
Rushmila Bintay Rafique ◽  
A. Vijayalakshmi Venugopal
Keyword(s):  
Preventive Measures ◽  
Credit System ◽  
Letter Of Credit ◽  
Full Compliance ◽  
Global Standards ◽  
Depth Analysis ◽  
International Trading ◽  
Standard Of Practice ◽  
Letters Of Credit ◽  
Primary Focus

This article attempts to analyse the issue of fraud in letters of credit (LC) transactions, also known as documentary credits. There are numerous reported cases of fraud in LC transactions, which remain a continuing risk. The UCP 600 is a popular standard of practice for banks, which confirms that banks must honour payment to the seller upon full compliance with the documentary credit requirements. Such payments have been made despite being presented with falsified documents or substandard goods being delivered. It might not be realistic to expect that the International Chamber of Commerce (ICC) can create global standards relating documentary credits, which cover the practicalities of the existing system and relevant legalities applicable to the letter of credit system in international trading. Each party involved may have a responsibility to take some preventive measures to mitigate the risk of fraud. The doctrinal method is used to conduct this study because it involves an in-depth analysis of the gap within the Malaysian system and the strategies that maybe be adopted to overcome the risks associated with LC fraud. Findings reveal that LC documents can be easily falsified, and the occurrence of LC fraud is not uncommon in Malaysia. However, given the lack of literature it has not been highlighted in the past couple of years. The primary focus of this article is to suggest preventive measures that the respective parties could take to protect themselves from fraudulent dealings involving LCs.

scholarly journals A New Method for Computing Letter of Credit Risks

SAGE Open ◽  
2020 ◽  
Vol 10 (4) ◽  
pp. 215824402097021
Author(s):  
Cheng Zhang ◽  
Ni Hu
Keyword(s):  
Factor Analysis ◽  
Quantitative Method ◽  
Credit System ◽  
Letter Of Credit ◽  
Credit Risks ◽  
Confirmatory Factor ◽  
System Risk ◽  
Chinese Export ◽  
Main Factors ◽  
And Control

This study targets problems in the risk assessment and control processes of letter of credit settlements for Chinese export enterprises. It applies the quantitative method of exploratory factor analysis to extract the main factors and uses a confirmatory factor analysis to test the validity these constructs. VENSIM software is used to design the system dynamics causal tree and flowchart of the letter of credit system. The equation sets of DANAMO parameters are then constructed using the software. Finally, through analysis of the system risk fluctuation diagram with system simulation, it offers enterprises advice on how to identify potential risk points to prevent and control letter of credit risks in advance.

Integrated Web-Based Letter of Credit System : Today's Opportunity , Tomorrow's Urgency

2014 ◽  
Vol 2 (6) ◽  
pp. 57-66
Author(s):  
Sanaz Nikghadam Hojjati ◽  
Fatemeh Soleimani Roozbahani ◽  
Mohammad Reza Yavarzadeh
Keyword(s):  
Credit System ◽  
Web Based ◽  
Letter Of Credit

Research on Risks of Letter of Credit Settlement Based on Factor Analysis and System Dynamics Simulation

2019 ◽  
Author(s):  
cheng zhang
Keyword(s):  
Factor Analysis ◽  
Quantitative Method ◽  
System Simulation ◽  
Dynamics Simulation ◽  
Credit System ◽  
Letter Of Credit ◽  
Credit Risks ◽  
System Risk ◽  
Main Factors ◽  
And Control

<p>Targeting at the problems in the risk assessment and control processes of the letter of credit settlement in China's export enterprises so far, it first adopts the quantitative method and exploratory factor analysis to extract the main factors. On the basis, the software VENSIM is used to design the dynamics causes tree and the flow chart of the letter of credit system. Next, the equation sets of DANAMO parameters are also constructed with the software. Finally, through observation of the system risk fluctuation diagram with system simulation, it gives enterprises some advice on how to identify risk points and how to prevent and control letter of credit risks in advance.<br></p>

scholarly journals Use of Letter of Credit Form of Settlements in Ukraine

2020 ◽  
Vol 24 (1) ◽  
pp. 39-44
Author(s):  
A. Burkovskaya ◽  
◽  
V. Pavlenko ◽  
Keyword(s):  
Foreign Trade ◽  
Technological Progress ◽  
Trade Agreements ◽  
Credit System ◽  
Letter Of Credit ◽  
Goods And Services ◽  
Current State ◽  
National Bank ◽  
Letters Of Credit ◽  
The Impact

Annotation. Introduction. The current state of Ukraine’s development provides broad conditions for enterprises in world trade, so the question arises how to minimize the risks of trade operations. The presence of risks and an unstable external environment can lead to non-fulfillment of obligations by the parties to the contracts. Therefore, the study of the letter of credit system for services is relevant because it will be able to ensure minimal cost risk. Purpose. The purpose of this article is to study the letter of credit as one of the reliable mechanisms for payment of foreign trade operations, and its use in Ukraine. Results. The article examines and investigates the system of letter of credit and its use in Ukraine. The main regulations on the regulation of letter of credit calculations are considered. The main advantages of the letters of credit are defined. The main stages of letter of credit conclusion are systematized. The impact of scientific and technological progress on the simplification of letters of credit is considered. Systematized main types of letters of credit and their classification. Conclusions. Using a letter of credit as a method of payment for goods and services will minimize the risks of both the seller and the buyer. In turn, the reform of the National Bank of Ukraine will allow the letter of credit to gain popularity and possibly become the main means of payment for foreign trade agreements. Keywords: letter of credit; form of calculations; obligation of the parties; types of letters of credit; basic regulations.

scholarly journals A Study on the Activation of Electronic Letter of Credit System in Korea

2007 ◽  
Vol 5 (1) ◽  
pp. 63-83
Author(s):  
Jong-Chill Kim ◽  
김태환
Keyword(s):  
Credit System ◽  
Letter Of Credit

Research on Risks of Letter of Credit Settlement Based on Factor Analysis and System Dynamics Simulation

2019 ◽  
Author(s):  
cheng zhang
Keyword(s):  
Factor Analysis ◽  
Quantitative Method ◽  
System Simulation ◽  
Dynamics Simulation ◽  
Credit System ◽  
Letter Of Credit ◽  
Credit Risks ◽  
System Risk ◽  
Main Factors ◽  
And Control

<p>Targeting at the problems in the risk assessment and control processes of the letter of credit settlement in China's export enterprises so far, it first adopts the quantitative method and exploratory factor analysis to extract the main factors. On the basis, the software VENSIM is used to design the dynamics causes tree and the flow chart of the letter of credit system. Next, the equation sets of DANAMO parameters are also constructed with the software. Finally, through observation of the system risk fluctuation diagram with system simulation, it gives enterprises some advice on how to identify risk points and how to prevent and control letter of credit risks in advance.<br></p>

Informal Credit System Through Social Entrepreneurs in Tiruchirappalli District, Tamil Nadu

2012 ◽  
Vol 3 (6) ◽  
pp. 21-23
Author(s):  
Dr. C. Paramasivan Dr. C. Paramasivan ◽  
◽  
T. Kannan T. Kannan
Keyword(s):  
Tamil Nadu ◽  
Credit System ◽  
Social Entrepreneurs ◽  
Informal Credit

Konkursanfechtungsrechtliche Probleme im Zusammenhang mit dem Standby Letter of Credit

1990 ◽  
Vol 2 (4) ◽  
Author(s):  
Christoph Paulus
Keyword(s):  
Letter Of Credit ◽  
Wenn Sich

Ein paar amerikanische Entscheidungen jüngeren Datums haben eine Gefährdung des konkursrechtlichen Grundsatzes der Gleichbehandlung aller Gläubiger offengelegt. Wenn sich nämlich ein Gläubiger innerhalb der kritischen Zeitspanne einen standby letter of credit ausbedingt und diesen nach Eröffnung des Konkursverfahrens über das Vermögen des Schuldners von dessen Bank honoriert erhält, erlangt er volle Befriedigung zu Lasten der Konkursgläubiger; denn die Bank kann sich in aller Regel aus ihren vorhandenen Sicherheiten befriedigen. Die anfechtungsrechtlichen Probleme ergeben sich vornehmlich aus der Mittelbarkeit der Zuwendung an den Gläubiger. Der nachfolgende Beitrag zeigt, wie die amerikanischen Gerichte diese Fälle lösen und wie sie nach deutschem (geltenden und zukünftigen) Recht zu entscheiden wären. Darüber hinaus wird die Frage erörtert, nach welchem Recht eine Konkursanfechtung durchzuführen ist, wenn der standby letter of credit über die nationalen Grenzen hinaus ausgestellt wird

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