Journal of Legal, Ethical and Regulatory Issues Volume 24, Special Issue 1, 2021 Business Ethics and Regulatory Compliance 1 1544-0044-24-S1-320 PROTECTION AGAINST LETTERS OF CREDIT FRAUD Alim Al Ayub Ahmed, School of Accounting, Jiujiang University Sarfraz Hussain, Azman Hashim International Business School, Universiti Teknologi Malaysia, Govt Imamia College Sahiwal Ardhariksa Zukhruf Kurniullah, Universitas Mercu Buana Edwin Ramirez-Asis, Universidad Nacional Santiago Antúnez de Mayolo Nabil Al-Awawdeh, Yarmouk Univeristy Nasser Jamil Mohammed Al-Shamayleh, Prince Sattam bin Abdulaziz University Felix Julca-Guerrero, Universidad Nacional Santiago Antúnez de Mayolo ABSTRACT Letters of Credit (Ls/C), the most common form of financing international commerce, have been a major source of worry for the whole international business world in recent years due to Ls/C fraud. Every year, the parties to the LS/C transaction lose billions of dollars due to fraud. A variety of reasons have led to the proliferation of such frauds. Many of them include the exclusive use of paper in international commerce, geographical distance in international trade, containerization, the usage of discounted Ls/C, and the absence of prosecution. Many academics and legal experts have been hesitant to interfere in Letter of Credit (Ls/C) transactions and have criticized local government regulations all around the globe. Allowing the courts to intervene with bankers' guarantees, according to government officials, may risk its integrity and make it more costly and ineffective than required. Due to a lack of regulation, recent research indicates that relevant organizations take certain measures to prevent Ls/C fraud, such as verifying the seller's reputation via well-known transportation services. Shipping, pre-shipment inspections, performance bonds, and electronic trade papers are all part of the process. Keywords: International Trade, Sales Agreement, Documentary Credit, International Chamber Of Commerce, Documentary Credit Fraud INTRODUCTION Payment via L/C is very frequent in international commerce. RD Necklace Bottle (Mercantile) Ltd. & Others vs. National Westminster Bank Ltd. & Others, 1977; RD Necklace Bottle (Mercantile) Ltd. & Others vs. National Westminster Bank Ltd. & Others, 1977; and many other payment-related cases. This is the most effective method of obtaining payment in international commercial transactions since it safeguards both the seller and the buyer's interests. A Letter of Credit (L/C) has been created to ensure that the seller is paid by a bank located in his jurisdiction. The buyer arranges the L/C in such a manner that payment is assured upon presentation of specified papers confirming that the goods provided to the buyer are the products described in the sales contract's fundamental conditions. Are based on only the seller must adhere to the credit's paperwork criteria, and payment will be assured. The International Chamber of Commerce (ICC) has updated its sixth edition to include Uniform Customs and Practice for Documentary Credit, 2007 (UCP 600).