Letter of Credit and Financial Crime
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Abstract
Letter of credit is utilized as payment method for international trade which a bank hold itself to pay against documents, tendered by the seller, that comply to terms and conditions required by the letter of credit. The mechanism of letter of credit is a guarantee to the seller that, if he tenders complying documents to the bank, the bank must pay. However, letter of credit may be used for the purpose of financial crime through the conspiracy between the seller and the buyer, which causing damages to both private and public interests. Customer Due Diligence practice under Anti Money Laundering Act B.E. 2542 is inadequate for the detection and prevention of financial crime in letter of credit transaction.
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References
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