Documentary credit fraud against banks: analysis of Korean cases
Purpose – This paper aims to explore the feature and mechanism of a new type of documentary credit fraud that victimizes banks’ issuing letters of credit (L/C), harming neither the importer nor the exporter and seeks to suggest possible measures to tackle it. Design/methodology/approach – This study analyzed 30 cases of documentary credit fraud against banks that were detected by the Korea Customs Service (KCS) and interviewed three key customs investigators to interpret the case reports more accurately and gain a deeper understanding into the mechanisms governing the fraud. This study draws on routine activity theory and crime pattern theory to analyze the opportunity structures of this fraud. Findings – This study found that the importer that engaged in the fraud cases had established a solid business relationship with the exporter and had established trust with the victimized banks; the banks, despite the fact that they had their own risk management systems to screen out unqualified L/C applicants, wer...
Letters of Credit as Signals: Comments on Ronald Mann's 'The Role of Letters of Credit in Payment Transactions'
This paper comments on Ronald Mann's article "The Role of Letters of Credit Transactions." In that article, Mann contends that, contrary to traditional understandings, the function of the letter of credit is to solve informational asymmetries by allowing an issuer with superior information to verify a buyer's legitimacy to the distant seller or to the buyer's government. He contends that traditional understandings of letters of credit are inconsistent with practice, particularly the systematic honor of drafts presented with discrepant documents. In this paper, I raise various issues that contest Mann's claim. First, there exist explanations for the honor of discrepant documents that are consistent with traditional understandings of documentary transactions. For instance, presentment of discrepant documents does not indicate defects in the underlying transaction, and banks have incentives to honor drafts unless they are aware of such defects. Second, Mann's suggestion that issuers signal the creditworthiness of their customers has little explanatory power, since, once the credit is issued, the beneficiary looks to the issuer for payment and thus is indifferent as to the customer's reliability. Third, any signal concerning the customer's creditworthiness that emerges from issuance of the credit is relatively opaque and could be replaced at lower cost by more precise indicators of reliability. Finally, Mann's suggestion that issuers of credits solve an informational problem among diffuse and geographically distant commercial parties ignores the likelihood that the same collective action problem that precludes communication about buyers also precludes communication about the reliability of different banks. The paper concludes with remarks about the need for careful rather than casual empiricism and the utility of relying on bank officials alone to determine the proper role of letters of credit.
Ceramic microwave antennas for mobile applications
Due to their medium to high permittivity values, ceramic microwave materials are attractive as building blocks for miniaturised antenna solutions. Further advantages are low dielectric losses and an excellent temperature stability of standard ceramic materials. Yet, the permittivity of the ceramic material also has a strong influence on the radiation efficiency and bandwidth of the antenna. This implies that in the design process a suitable compromise has to be found between the degree of miniaturisation on the one hand and the antenna efficiency and bandwidth on the other. We describe two approaches towards efficient miniaturised ceramic microwave antennas: the dielectric resonator antenna (DRA) with partial metallisation and the shorting post patch antenna. We focus on design steps taken to ensure both a high degree of miniaturisation and high values of the radiation efficiency, the choice of the ceramic material and the experimental performance of the antennas.