L/C Frauds Management Under Different Legislations

(T. O. International Trade Seminars)

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Introduction
L/C frauds are getting more and more popular and sophisticated and the amount involved is increasing at an alarming rate. So how to manage L/C frauds becomes a daily task for bankers. How high is the quality of evidences necessary for a successful application of an interim injunction? How to deal with the junk goods? Which party is most suitable for this task? What are the dos and don't? What are the million dollar mistakes made by other banks? What can be learnt from the legendary Solo case in Dubai? Different countries have different legislations on L/C frauds, varying in wide margin. Therefore a party, for example, issuing bank, may win in one country and may lose in another legislation. This is bewildering but it is a fact of life for bankers.
Hence it is important for bankers, as well as their customers, the applicants, to get themselves familiarised with different legal concepts in different legislations so that when they meet frauds, they know what positions they are in. Otherwise they may face unpleasant surprises, as illustrated in the famous Banco Santander case of UK in 2000.
We have the honour to invite Mr. T. O. Lee to share with us his vast experience learnt in dealing with numerous L/C fraud cases every year from four corners of the globe and his sound advices to the bankers and their customers, the applicants.
This workshop may carry 6 PDU points for ICC CDCS examination exemption.

Target Audience
Bank officers, risk managers, importers, exporters, finance controllers, auditors, trainers and lawyers.

Contents Outline

Reasons for popularity of L/C frauds
Difficulties in proving frauds to a court of law

Court standard of evidence very high
Fraudsters avoid leaving proofs
Court reluctant to issue injunction

The role of an expert witness
Under which condition an issuing bank may refuse reimbursement to a negotiating bank that has negotiated in good faith?
The strict legal requirements in establishing frauds

First hand information
Documentary evidence only
Difficult to proof bad intent

Different legal concepts on L/C frauds as illustrated by legendary cases from different legislations.

The “SZETYN”
The “SANTENDER”
“ENRON”

How should an issuing bank, confirming bank, negotiating bank and presenting bank act in the best interest when frauds are uncovered?
How should an applicant, beneficiary or other parties act in the best interest after frauds have surfaced?
Which party should apply for court injunction and the underlying reasons?
How should banks in different roles react on the interim injunctions?

Issuing bank
Confirming bank
Negotiating bank / Presenting bank

How should the parties deal with junk goods?
How can banks and applicants prevent L/C frauds?

Methodology
Highly interactive workshop, using as case studies, real life fraud dispute cases taken from the speaker's work file with sensitive details removed to protect the privacy of clients.

Duration
One-day workshop

Speaker
Mr. T. O. Lee FAE, MCIArb, MITD
Mr. T. O. Lee is a world-class letter of credit expert representing Canada in various ICC Commissions, such as Banking, International Commercial Practice (Incoterms 2000) Electronic Trade, Mediation and Arbitration. He is invited by ICC to comment on the drafts of banking and trading rules, such as the UCP 500 Position Papers, URC 522, URR 525, DOCDEX, ISP 98, eUCP, Transferable Credits & UCP 500, Discrepant Documents, Waiver and Notice, International Standard Banking Practice (ISBP 645) and ICC Banking Commission Official Opinions. He is a Member of the UCP 500 Revision Consulting Group and is actively involved in ICC Commercial Crime Bureau investigations. He is a member of the Editorial Board of the ICC Publication "Documentary Credits Insight" (1994 -1999) and a Technical Adviser of "L/C Monitor" in Canada. Mr. Lee is a member of the Canadian Working Party on the ICC Commission on Banking Technique and Practice administered by the Canadian Bankers Association. Being an Accredited Arbitrator nominated by the International Center for Letters of Credit Arbitration, Inc. USA, he is also a Fellow and an Accredited Expert (Letter of Credit) of the Academy of Experts, Gray's Inn, London, a Member of the Chartered Institute of Arbitrators, England, a Member of the United Nations International Multimodal Transportation Association, Geneva and a Member of the Institute of Training and Development, England.

He was a columnist in the Lloyd's of London Press "Maritime Asia/Intermodal Asia" magazine during the period of June 1993 to March 1995. He has been contributing since August 1993, a Friday column in the "Hong Kong Economic Journal". He is a co-author with Eric Ellen in ICC Publication No. 548 "Special Report on China Trade - The Risk Factor". He chairs public seminars in China, Hong Kong, other ASEAN and Middle East Countries and is a panelist in North America, providing in-house training and consultancy services to Fortune 500 corporations and banks globally. His professional workshops are known for the 5 "i's" - interesting, informative, interactive, innovative, and inspiring. He also provides expert witness services to international legal firms in letter of credit litigations.

Details of Articles he wrote for ICC, Paris, Lloyd's of London and highlights of dispute cases resolved can be viewed in his letter of credit website www.tolee.com..

What Others Have To Say:

"A brief discussion with Mr. Lee will convince you of his expertise on International Trade particularly for his knowledge and experience in maritime chartering, multimodal transport, marine cargo insurance, trade frauds, the China Trade, mediation and arbitration".
Charles del Busto - Chairman of ICC Banking Commission (1990-1996)
"Mr. Lee's presentation is thought provoking and original in its content. It brings to light not only problems with documentary credits but also solutions that you could obtain only from practical experience working in the field. I highly recommend it to both bankers and traders who are serious about letters of credit".
Jacob Katsman - Managing Editor, LC Monitor, Canada
"Most comprehensive information in the handouts, inspiring presentation, professional in every respect, introducing the latest international trade fraud cases with in-depth analysis".
S. C. Kwok - Vice President, Citibank, Hong Kong
"Clear and focused line of thoughts, lively presentation, experienced in handling questions, lots of case studies from the speaker's own work file to be shared with us".
Ding Bo - Director, Zhum Heng Development Ltd., Guangdong Group, Hong Kong
"Handouts are clear, concise and focused, with lots of real life cases to reflect the current trading environment and the important changes in the market place".
Kenneth Y. M. Lee - Senior Consultant, Bank of Communications, Manhattan, New York, USA

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