Home > Publications > Fraud as a Reason to Book a Documentary Credit

Fraud as a Reason to Book a Documentary Credit

Mohammad Shafiq AlFreihat1, Zaid Mohammad Al Wahshat2, Hashim Ahmad Mohammad Balas3 & Ala’ Qasim Abueid 4

This paper explores the role of fraud as a compelling reason for invoking
documentary credits in trade transactions. Documentary credits, commonly known
as letters of credit, serve as crucial financial instruments facilitating global
commerce. The Bank is committed to examining the documents submitted by the
beneficiary but does not fully guarantee their integrity, so it is committed to
achieving this benefit. While designed to provide security and mitigate risks, the
prevalence of fraud in international trade poses significant challenges. In the event
of the commission of these acts, the seizure is considered a means of executing
documentary credits. The research concluded that the examination of documents
takes place without the obligation to comply with the goods, and it has found that
legislation will establish separate rules for the seizure of documentary accreditation.

Keywords: fraud, documentary accreditation, independence, booking, bank, goods