DOCUMENTARY LETTERS OF CREDIT, PRINCIPLE OF STRICT COMPLIANCE AND RISK OF DOCUMENTARY DISCREPANCY = DOCUMENTARY LETTERS OF CREDIT, PRINCIPLE OF STRICT COMPLIANCE AND RISK OF DOCUMENTARY DISCREPANCY

다국어 초록 (Multilingual Abstract)

Documentary Letters of Credit are considered as life blood of international trade. Their importance becomes evident when two businessmen from different parts of the globe who have no knowledge about each other’s financial and business history deicide to do trade together. In such an occasion, Documentary Letters of Credit facilitate the trade process by shifting commercial risk of non-payment from importer to irrevocable promise of payment by a bank under the condition of presenting complying documents required in LC by exporter. However, some researches indicate that more than 70 percent of presentations of exporter beneficiaries are dishonored by banks due to documentary discrepancy. Corner stone to current paper is Principle of Strict Compliance in LC operation which is regulated under article 14 of Uniform Customs and Practices for Documentary Letters of Credits published by ICC (latest version is UCP 600). In analyzing the legal character of Principle of Strict Compliance, paper will try to answer the question of: (i) What are standards of compliance in decisions of English, American and South Korean courts in determining discrepancy of presented documents to bank? (ii) How different are these standards and what are main types of documentary discrepancy in international LC transaction?