An Analysis of Fraud Risks of Letters of Credit and Countermeasures

As one of the important international clearing forms,the letter of credit flexibly transforms the commercial credit of importers and exporters into bank credit,solving the credit crisis between importers and exporters and facilitating international trade.In practice,however,due to the complex procedures in using the letter of credit and the tangled relationship between different parties,risks rise in the use of the letter of credit.The essay,on the perspective of business,explores the fraud risks that the importers and exporters will face in employing the letter of credit to perform the international trade settlement.The author also systematically analyzes the risk forms and the possible reasons,and finally puts forward some countermeasures.