The Risk of Litigation in International Trade

Letters of credit are one of the most important methods of paying for goods in international trade. Despite the significant and significant advantages of LCs, this payment method does not completely eliminate the risk of trading in international trade. One of the most important risks in payment based on LC is fraud risk. The risk of fraud is related to the likelihood of fraud occurring in the process of payment of a credit, which is of two types: fraud is committed either in relation to the documents presented to the bank or in connection with the underlying transaction in the L / C. The courts of different countries have dealt with these two types of fraud in accordance with the USP regulations, which are the rules governing LCs. While noting the concept of LC fraud as one of the most important risks associated with this method of payment, the result of the LCP fraud process is both in relation to the underlying transaction fraud and in the case of fraud in the transaction. Examine the documentation provided to pay for the goods. Given the independence of the underlying transaction from the LCP, it appears that the courts are less willing to accept claims of fraud in the underlying transaction for issuing a non-payment order. In this paper, the authors have done a descriptive-analytical approach using a library method.