In this unit you will learn how to identify fraud schemes and how to prevent them from damaging your business. Detailed Topic Listing as follows:
LU FIT 010 Trade
Finance Fraud Identification and Prevention
1. Specifics of
International Trade Finance Fraud
1.1 Definition of Trade Finance
Fraud
2. Letters of
Credit and UCP 600
2.1 Article 7 Issuing Bank
Undertaking
2.2 Article 12 b. Nomination
2.3 Veracity of Documents
2.4 Acting in Good Faith
2.5 Entitlement to Reimbursement
2.6 Case History - Fake
Inspection Certificate Presented
3. Bonds &
Guarantees in International Trade
3.1 Definition of a
Bond/Guarantee
3.2 Reasons for Requiring a Guarantee
3.3 Issuers of Guarantees
3.4 Direct / Indirect Guarantees
3.5 Categories of Bonds or
Guarantees
3.5.1 Customer
Implications re. Issued Bonds and Guarantees
3.6 Banks Consideration when
Issuing a Demand Guarantee
3.7.1 Wording
in Bonds/Guarantees Issued by a Bank
3.8 The Guarantee and the
Contract
3.9 Standby Letter of Credit
3.10 Guarantees, Standby LCs
& Fraud - Example Scenarios
4. The Bank and Customer Relationship
5. Trade Finance Fraud Prevention
5.1 The Occurrence of Letter of
Credit Fraud
5.2 User of Trusted Third Parties
5.3 Highly Complex Transactions
to Cause Confusion
5.4 Authentication of Documents
5.5 Money Laundering
5.6 Overcoming inadequate AML
Legislation
5.7 The use of technology to
avoid trade finance fraud
6. LC Independence
Principle & Fraud Exception
Further Reading
1 - A Comparative Analysis of the
Standard of Fraud Required under the Fraud Rule in LC Law
2 - Preventing Letter of Credit
Fraud
3 - The Fraud Exception in LCs :
A Global Analysis
4 - Money Laundering and
Financial Crimes Caribbean
5 - Documentary Credits in
International Transactions with a special focus on the Fraud Rule
6 - International Trade Fraud
Online Forum Access
End of Unit