• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.53
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• pp.75-97
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• 2012

This study primarily concerns the transfer of letter of credit. A transferable credit is a credit that clearly specifies it is 'transferable' and may be made available in whole or in part to second beneficiary by the request of the first beneficiary. the transfer of the credit is available where the seller as a middleman in intermediate trades purchases from domestic and international supplier. The purpose of this study is to examine the transfer of letter of credit in the UCP600. Having recognized the differences, the study analyzes the transfer of letter of credit under the UCP600 in comparison to those under the ISP98. The ISP98, like the UCP600, stipulates for the requirement of transfer, the number of transfer, conditions of transfer, the replacement of the name of first beneficiary.

• Korea Trade Review
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• v.42 no.5
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• pp.213-232
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• 2017

A Bank Payment Obligation is now in operation as payment instruments in the business of Supply Chain Finance since 2013. The BPO is an irrevocable undertaking of the Obligor Bank subject to the successful electronic matching of all required Data Sets with the established Baseline in the TMA. Although the BPO should be regarded as similar to a Letter of Credit, it is a new payment solution based on a technology and data-driven mechanisms. The BPO is different from the letter of credit in their structure such as a bank to bank obligation, an automated matching engine, a transfer and confirmation of the Credit, etc. The BPO can also be used more effectively on a stand-alone solution as an electronic alternative to the traditional instruments. it will provide a new range of solutions to meet the ever-changing needs of the trade customers. However, the BPO could be raised several issues including an assurance of payment between recipient banks and sellers because the BPO is a bank-to-bank obligation. The URBPO do not applies to the relationships between banks and their business clients. So, the primary objective of this paper is to promote the institutional understanding and present the implications by reviewing the majn issues in the BPO as comparision with the Letter of Credit from the institutional point of view. This research was also based on documentary research focusing on the preceding research and the materials of ICC and SWIFT.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.77
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• pp.113-144
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• 2018

This study explores how to prevent the fraudulent export financing and its subsequent export insurance fraud in relation to O/A negotiation. Under the traditional letter of credit(L/C) transactions, the banks, as a negotiation bank, can extend trade financing to the exporters through negotiation of draft and/or shipping documents. Under the O/A transaction scheme, however, bank cannot ascertain existence of trade performance and it is much riskier to extend an advance financing to the exporters before the buyer sends confirmation of debt. In O/A negotiation. some exporters tried to fraud banks by falsifying the shipping documents and the size and gravity of this fraudulent export financing were huge. Therefore, this study examines the banking process in O/A-based trade financing, documents examination process, the negotiation of instruments, treatment of trade financing in export credit guarantee, most importantly, explores what could be the criteria for appropriate treatment of account receivable to insure the safe transfer of account receivable. To maximize the benefit for optimum trade financing, the Bank of Korea established several Trade Finance Rules (refers to "BOK Rules") requiring that commercial banks should maintain optimal credit limits(so called, 'the principle of optimal loan') to extend the trade finance. The K-sure post-shipment credit guarantee programs and short-term export insurance program(EFF)can also facilitate 'the principle of optimal loan' principle.

• International Commerce and Information Review
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• v.10 no.2
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• pp.283-304
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• 2008

According to globalization and localization of world economics international trade payment method was also changed. A traditional payment was Letter of Credit basis, however it is being increased to various methods such as remittance, documentary collection(D/P, D/A) and open account. In order to acquire a secure export payment, exporters prefer to L/C basis which is guaranteed by a reliable bank. However, the L/C should bear a security so that importers would rather documentary collection than L/C. The reasons for the preference of collection payment rather than L/C are a low commission cost, the conversion of buyer's market from seller's market due to severe competition in the world market, transaction increase between main office and branches and a right to control the goods until executing the payment by exporters. Besides of them, collection payment can handle safer and faster than open account basis. However, the collection payment has a risk which it isn't guaranteed by bank for the payment so that I would suggest countermeasures to minimize the payment risk utilizing the collection basis as follows; using export credit insurance system, a large domestic credit report provider such as D&B for absolutely fresh and new information, a collection proxy service for overseas deferred credit and suggestion specifying to order B/L not straight one on consignee in order to transfer the right of ownership with endorsement without problem.

• Korea Trade Review
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• v.43 no.4
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• pp.1-25
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• 2018

Bank payment obligations (BPO) have been used since 2013 as a payment solution in the business of supply chain finance. The BPO is an irrevocable undertaking of the obligor bank subject to the successful electronic matching of all required data sets with the established baseline in the TMA. Although the BPO should be regarded as similar to a letter of credit, it is a new payment solution based on advanced technology and data-driven mechanisms. The BPO differs from the credit in institutional terms such as bank-to-bank obligations, automated matching engines, and transfer and confirmation, etc. The BPO can also be used effectively as a stand-alone electronic solution to traditional instruments. it provides a new range of solutions to meet the ever-changing needs of trade customers. However, Operation of the BPO can leads to several issues including an assurance of payment between recipient banks and sellers because the BPO is a bank-to-bank obligation. The URBPO does not apply to relationships between banks and their business clients. So, the primary objective of this paper is to promote institutional understanding and present implications by reviewing major issues concerning the BPO as compared with the letter of credit from the institutional point of view. This research was based on documentary research focusing on the preceding research and the materials of ICC and SWIFT.

• The Journal of Information Technology
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• v.5 no.3
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• pp.197-214
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• 2002

Electronic Commerce has already existed for over 20 years. The Bolero project initially had the support of TEDIS, and now is jointly financed by SWIFT(Society for World International Financial Telecommunications) which handles most of the electronic funds transfer for banks, and the Through Transport Mutual Assurance Association(the TT Club), a mutual insurance association most of whose members are drawn from the Multimodal transport industry or transport intermediaries. Bolero's mission is to provide guaranteed and secure delivery, in electronic form, of trade documentation, globally, based on a binding legal environment and common procedures, Bolero will also provide a platform for provision of neutral cross-industry services. TradeCard is a payment and settlement system that is an alternative to letters of credit. That is, TradeCard is a business-to-business e-commerce infrastructure that enables buyers and sellers to conduct and settle international trade transactions securely over the Internet. Paperless, payment-guaranteed international trade transactions - which eliminate the traditional letters of credit with electronic certifications - are widely considered the most difficult B2B transactions to conduct.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.68
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• pp.1-21
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• 2015

The purpose of this study is to propose a new mechanism for the global transmission of electronic trade documents and to promote them using it. Trade settlement methods are changed from L/C bases to non-L/C bases and in particular, the telegraphic transfer is dramatically increased since mid 1990. But the status of transmission of electronic trade documents still rely on the letter of credit and bill of lading. So it need to change the process of transmission of electronic trade documents utilizing non-negotiable sea waybill instead of bill of lading. In this study, I pointed out two problems as obstacle factors in global transmission of electronic trade documents. First is the system connection problem between domestic and foreign banks and second is the electronic right transfer problem in the bill of lading. Electronic bill of lading has already been made, but are not used and e-Nego has also not been activated under the above issues. Therefore, it should be solved previously the above problems for the global transmission of electronic trade documents under the letters of credit. However, in transactions of transfer, it does not need the inter-bank connection and also does not occur the electronic right transfer problem of bill of lading if using the non-negotiable seaway bill instead of bill of lading. In this paper, I recommend the global transmission strategies of e-trade documents using the non-negotiable sea waybill in transactions of transfer. Hopefully, I expect the activation of global transmission of e-trade documents through the utilization of electronic non-negotiable sea waybill as suggested by this study.

• Korea Trade Review
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• v.44 no.6
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• pp.87-103
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• 2019

L/C(Letter of Credit) is a common payment term designed to prevent credit risk in international trade. However, most companies prefer T/T (Telegraphic Transfer) payment due to its time and cost efficiency. According to related statistics, more than 70% of international trade contracts are based on T/T rather than other payment terms. The time required from the export negotiation to the completion of the export transaction and collection in international trade is very long. In this process, disputes related to settlement are continuous, so caution should be exercised. Therefore, whether or not the export payment is recovered in a timely manner is the core issue of trade transactions for exporters. The purpose of this study is to identify problems that cause delayed payments during settlement by the remittance (T/T) method, which can lead to settlement risk, in order to investigate those factors which can lead to delays in payments and increased risk as well as to determine ways to prevent such factors in advance. According to empirical findings, trading experience, transaction duration, and contract contents can be important determinants in terms of payment delays. Industry uniqueness and market uncertainty were found to be in opposition to the hypothesized relationships. The results of this study will be useful for trading companies to reduce their payment risk.

• Korea Trade Review
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• v.41 no.2
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• pp.231-250
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• 2016

The study attempts to consider L/G(Letter of Guarantee) in a different angle, which is internationally used as a way of commercial customs and practices in a case when the consignee wants to receive the goods without the original Bill of Lading, Thus, this study focuses more on verifying the usage of L/G in Mixed Payment System and the range of guarantee responsibility by an issuing bank through case analysis. This case uses a mixed payment method of L/C(Letter of Credit) and T/T(Telegraphic Transfer) in the transaction of goods. The issuing bank of L/C issues L/G with the amount of L/C which is the same as the amount as C/I(Commercial Invoice). However the carrier deliver all goods laden under both L/C and T/T payment with the production of L/G. In this case, because the buyer is unable to pay, the seller makes a claim for damages to the carrier that the carrier delivers the goods to the buyer against L/G. Finally, the judge gives a decision that the issuing bank of L/G should pay the whole amount of the goods. In this case, the main issue of the dispute is the range of guarantee responsibility by the issuing bank of L/G. As a result of the case analysis, the study suggests two counter strategies for smooth utilization in international trade environment. First, in the case of mixed payment system, a seller should issue a commercial invoice separately based on the amount of each settlement plan in order to clarify the liability of guarantee. Second, banks should establish a new form for L/G including a sentence for verifying liabilities of the bank's side in the current form of L/G.