Scientific research
Saeed Mohseni; Mahsa Robati
Abstract
Introduction
Due to the important role that managing director plays in managing a private joint stock company, increasing clarity of the scope of his or her authority is important. This is while on the one hand, the ambiguity, brevity, and sometimes vacuum in the laws, and on the other hand, the ...
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Introduction
Due to the important role that managing director plays in managing a private joint stock company, increasing clarity of the scope of his or her authority is important. This is while on the one hand, the ambiguity, brevity, and sometimes vacuum in the laws, and on the other hand, the divergence of views in the legal doctrine, has deepened the ambiguity of the aforementioned scope. Therefore, reinforcing the managing director's position as the executive lever in the economy's most popular form of the commercial companies, that is, the private joint stock company, requires the delineation and highlighting of his authority. The nature of the managing director's powers from the point of being inherent or delegated, the limitations on those powers, and the status of the encroachment from the drawing scope, in response to the latter two questions, are the most important leading questions.
Theoretical frame work
This study on the one hand highlights the scope of the powers of the managing director (generally and in varying assumptions) and on the other hand explains the restrictions imposed on those authorities. Finally, the assumption of managing director’s encroachment from the scope of his or her authority and the effects of this action, has been analyzed.
Methodology
This study attempts to answer the main questions of this research based on the descriptive-analytical method by criticizing and analyzing various statutes, regulations, cases and legal doctrines and sometimes with a comparative study of French law.
Results & Discussion
The board of directors by giving over the necessary authorities to the managing director provides for him the possibility of practical managing. These authorities are limited to the items that the board gives the managing director over in the process verbal of choice of him or in a separate contract. Despite this, it is possible that the article of association considers authorities and limitations too. In this case, the board cannot decrease or increase those authorities. In addition of mentioned limitations, there are other limitations that is imposed by law to the authorities of managing director. Although, for being valid the actions of managing director, it is necessary for him to observe the scope of the determinate authorities whether by law, by article of association or by board of directors, however, except the limitations that is imposed by law, and always is opposable against third parties, limitations imposed by the board of directors and the article of association can be opposable against third parties if they have been published. If these limitations are not published, it must be considering these limitations in opposable against third parties and must be consider the actions of the managing director outside the mentioned scope valid toward third parties.
Conclusions & Suggestions
Contrary to the powers of the Board of Directors, which include all the powers necessary to govern the affairs of the company, the principle is that the manager director has no authority and his or her powers are limited to the Statute and delegated by them. Representation behalf the company and the right to sign of the manager director as defined in Article 125, does not mean that these rights are monopolized by the CEO, but rather by the powers conferred on him by the Board. It is natural that such a delegation does not deprive the delegate of its right. In addition to the limitations that the Board may impose on the manager director, certain statutory restrictions on the Board's powers also limit the scope of the manager director's powers. These limitations are sometimes to prevent the manager from abusing the authority and sometimes to the principle of separation of powers. Despite these restrictions, the manager director may go beyond his powers and take actions outside of his delegated powers. Among these restrictions, the restrictions imposed by law on the powers of the manager director, such as the specific powers of the general assemblies and the board of directors, transactions, as well as acts that the manager director is prohibited by law, such as obtaining a loan or credit from company and the observance of the subject matter of the company in the assumption that the subject matter of the company constitute the domain of its capacity, due to its reflection in the law and the assumption that everyone is aware of the law, must be opposable to third parties. In contrast, those limitations on the manager director's powers may be in opposable to the third parties that have not been issued or published by the board or general assembly. In fact, the legislator, using the legal entity of in opposability, while discrediting these types of actions by the manager director, has considered them valid in the eyes of third parties in good faith. It is natural that in opposability sanction that properly gathers two apparently conflicting interests, is more appropriate than other sanctions. Because the said sanction, while validating and affirming the limitations of the manager director's authority, discredits it to third parties, it thus protects the interests of third parties while maintaining relationships between shareholders, managers and company.
Scientific research
mohammad habibi majande; HOSSEIN Esmaeilbasad
Abstract
Introduction
Historical and contemporary evidence shows that for technologically backward countries, development without commercial support (where tariffs are the main pillar) and subsidies, if not impossible, will prove difficult. Trade liberalization only works well if it is gradually selected as ...
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Introduction
Historical and contemporary evidence shows that for technologically backward countries, development without commercial support (where tariffs are the main pillar) and subsidies, if not impossible, will prove difficult. Trade liberalization only works well if it is gradually selected as part of a long-term industrialization policy. Almost all of today's developed countries have organized their economies through the use of tariffs and subsidies in the nineteenth and twentieth centuries and after years of continuous efforts and pursuit by developing countries to adjust for economic inequality, and in particular by addressing the issue. UN-affiliated institutions and assemblies, including the United Nations Conference on Trade and Development (UNCTAD), have agreed that the world's industrialized nations should reduce discrimination in international trade, as well as provide an opportunity for other nations to increase foreign trade and increase their share. They trade in commodities and commodities exported to developing countries Expanded and less developed, take advantage of bilateral and mutual concessions in the Doha Round, thereby enabling the developing world to market their exported goods and products more readily to industrialized countries. The first step taken in this regard is the creation of a "general system of preferences", which has been established in collaboration with and under the support of UNCTAD. Under such arrangements, most industrialized countries, including EU members, favored many of the goods and products manufactured in developing countries.
Such tariffs are usually lower than the full tariffs, and in addition to these arrangements, developing country groups in the developed countries market have better competitiveness and are also encouraged to importers. To meet their import needs from developing countries on equal footing, that is, to create conditions of competition and economic flexibility. This initiative, aimed at empowering production and quality improvement in developing countries, has goals in the WTO system of preferences. Preferential trade agreement is the mildest type of economic convergence that the signatory countries agree to impose preferential tariff rates on imports of each other, which is necessarily accompanied by trade liberalization and discrimination against third parties. In the four paragraphs of this article, we first analyze the reasons for preferential tariffs and the WTO's attention to them, and in the second paragraph, we consider trade liberalization, which is one of the main goals of the WTO in the light of the use of preferential tariffs. Paragraph 3 also assesses the necessity of tariff system integration in developing countries and, in paragraph 4, outlines the new and qualitative criteria to be applied in tariff system integration using preferential tariffs. We have made a decision.
Methodology
The research is descriptive-analytical.
Conclusions & Suggestions
In the discussion of this paper, we examined the impact of preferential tariff agreements on the integration of WTO tariff systems, and although trade tariffs may be due to preferential tariffs among economic blocs, diversion of trade between countries is generally possible. It has been proven that it will lead to the creation and development of commerce and industry and, in the short and long term, will require countries to comply with the principle of good national behavior, and in particular the full ethics of all nations but the WTO empowerment clause, as prescribed by the General System of Preferences and Customs Unions, should be followed by careful monitoring and setting the initial rates for negotiating membership or issuing harmonized customs codes at the time of the announcement of the preferential tariff agreement and timetable for The gradual liberalization of trade will support the industries that support it. However, according to the rules of origin, the use of preferential tariffs for bilateral and multilateral trade is to some extent seen with the allocation of at least 40% in WTO and bilateral or multilateral and regional regulations and are emphasized the stages of producing a commodity for trade between the countries of an economic bloc, but in order to integrate tariffs, in a notice board and a regulatory plan by the organization, this minimum participation rate of 40% must be established by creating a mechanism. In the medium term, up to 60%. The research findings also show that the creation of free trade and customs zones and the reduction of tariffs by signing preferential trade agreements will increase the volume of intra-group trade, exports and imports, as well as welfare effects for members.
The research findings also show that creating free trade and customs zones and reducing tariffs through preferential trade agreements will increase the volume of intra-group trade, exports and imports as well as bring benefits to members. so:
(A) The WTO, in order to achieve the goals of the Doha Round, and reduce tariffs, must provide the conditions necessary for the empowerment of southern countries through the transfer of technology to industrialized countries.
(B) Subject to the provisions of Article 24 of the GATT Agreement, States Parties to the Regional Blocs shall, for the purpose of integrating and integrating their internal tariffs into the World Trade System, provide a means other than to establish a timetable for reducing tariffs and moving towards the establishment of a free zone; They do not have trade, and through which regional institutions act as a gateway to the WTO and free trade.
(C) The industrialized nations, in accordance with the rules of the organization, apply the general system of preferences and tariff agreements to political pressure and to accompany developing countries (not for commercial liberalization and tariff integration) and in return for their markets. Providing them with exports and heavily using the WTO's more powerful means of restraining exports to those countries for reasons such as dumping, support tariffs and subsidies in the agricultural sector, the EU is a prominent example.
(D) The World Trade Organization shall set the basic tariff rate for the member countries and the negotiation process in relation to the different categories of harmonized codes and its relative and absolute advantage in the production of goods and shall be monitored more closely by the developing countries. The supplier of the rules of origin with at least 40% of the production process of the product reaches to over 60% with a 10-year and 25-year long-term plan to achieve the goal of liberalizing and integrating tariff rates within the organization.
Scientific research
mohammad zaman rostami; Mohammad Hadi Rostami
Abstract
Introduction
Law and economics are closely intertwined and cannot be studied as two separate issues. Every economic activity is based on a legal contract, and every legal contract has an economic effect and creates a level of utility for the parties to the contract. The economy evolves in the context ...
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Introduction
Law and economics are closely intertwined and cannot be studied as two separate issues. Every economic activity is based on a legal contract, and every legal contract has an economic effect and creates a level of utility for the parties to the contract. The economy evolves in the context of Law, and with the evolution of economics, Low must also evolve. A perfect legal system is a factor in progress, and an incomplete legal system is a hindrance to progress. The economic analysis of law has transformed the legal system in line with the fundamental principles of economics, efficiency, productivity, growth and prosperity. This approach seeks to utilize existing facilities in light of limitations and shortcomings in a way that results in the highest growth and prosperity.
Theoretical frame work and Methodology
This essay examines the trends, foundations, principles, main criteria of this approach and its impact on the evolution of legal systems in support of the industrial system. With a descriptive analytical approach, it answers the question of how the relationship of law and economics can contribute to economic progress. It posits that the economic analysis approach of law, by incorporating the element of efficiency and productivity into the foundations of the legal system, and obliging it to support the pioneers of the economy, can help the economic progress. The innovation of the paper is that it explains more accurately, economically and practically, the theoretical foundations, the main criteria and the impact of this approach on the evolution of the legal system in support of economic transformations.
Results & Discussion
After the industrial revolution, all the institutions of european countries, including the legal entity, began to serve the industrial developments. Gradually, ideas and schools emerged that helped transform the legal system to support industrial development and economic growth. In the nineteenth and early twentieth centuries, the economic approach to law is found in the Thoughts of legal realists, institutionalists, and schools such as Chicago, Yale, Virginia, and Austria. Realists believed that low cannot be understood without reference to economic conditions and that judges must be aware of the economic conditions affecting their legal course and the impact of their judgments on the economy so that their judgments can contribute to efficiency, productivity and growth. They believe that in society, every individual strives to sacrifice the interests of others for his own benefit. It is the duty of law to fulfill maximum needs and most prosperity at the least cost by supporting efficient people, entrepreneurs and productive sectors. Another approach was the economic analysis approach of law that began at the University of Chicago and Studied those legal entities that were of an economic nature, such as tax, bank, insurance, import, export, bankruptcy, stock exchange, labor law and public welfare, with economic methods and instruments. The economic approach to law, by employing economic tools, methods, and analyzes in the field of law, sought to combine legal logic with economic logic. This approach has made several claims. One is that humans act upon the benefits and costs of an action and, therefore, we can influence people's behavior by changing laws. Second, law must serve productivity, efficiency and economic growth and give more freedom to those who are more productive, especially those who can act as pioneers of development. Economic analysis of Low seeks legal solutions that maximize efficiency by minimizing costs and maximizing public wealth. This approach does not claim that maximizing wealth is against justice. On the other hand, justice is compatible with efficiency and efficiency can be considered part of justice. Efficiency is associated with lower costs and increased productivity. Reducing costs avoids wasting resources and increasing productivity means the potential for individuals and objects to flourish. Both can be part of justice.
Conclusions & Suggestions
The economic analysis of law has transformed the legal system in line with the fundamental principles of economics, efficiency, productivity, growth and prosperity. Economic analysis of law is the use of techniques, analyzes, and economic values to explain legal relationships and understand the reaction of individuals to legal rules. Relying on the element of efficiency, productivity, and rational behavior, this approach seeks to utilize existing facilities in light of limitations and shortcomings in a way that results in the highest growth and prosperity. The main result of this article is that our country must first develop a clear and coherent economic system for economic development and then reform the legal system to support it.
It is recommended that all legal entities that have an economic nature such as tax, bank, insurance, import, export, bankruptcy, stock exchange, labor law and public welfare and then other areas of law, such as property rights, contractual freedom, contract law, efficient breach of contract, Incomplete contracts, imposed conditions, contractual damages, company law, civil liability law, family law and quasi-crime, be studied through the economic analysis approach of law.
Scientific research
Ramin Alizadeh; hossein gholami; mohammad ali jahed
Abstract
Introduction
Nowadays, a bank is considered as a significant institution, a financial and economic organization where the absence of effective regulatory systems can provide a platform for abuse and widespread offense that have brought inappropriate social and economic consequences to the community; ...
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Introduction
Nowadays, a bank is considered as a significant institution, a financial and economic organization where the absence of effective regulatory systems can provide a platform for abuse and widespread offense that have brought inappropriate social and economic consequences to the community; it may affect not only the entire banking system of a country but also the entire global financial system. In this article, we will discuss the four concepts of banking crime and corporate governance, the principles of corporate leadership for prevention, the effects of principles of corporate leadership on the prevention of the banking crimes and the application of corporate leadership principles in Iran.
Theoretical Framework
Criminal law on the banking crimes constitutes a part of the crimes and penalties in support of the economic order against abuses and illegitimate possessions which are largely jobbery or cause damage to the economic system. Corporate governance is a structure that includes a set of relationships between company management, the board of directors, stakeholders and other beneficiaries in which the objectives of the organization are explained and defined as the necessary means for achieving the objectives and supervision of the units’ performance. The earliest and first concept of the corporate governance taken from the Latin word "Gouberance" means guiding, which is commonly used to navigate the ship.
Research Method
In this study, we use descriptive and analytical methods based on library resource. We also use case-by-case judgment from the Iranian Court.
Results and Discussion
One can refer to Basel's standards as the soft resources of corporate banking governance. Basel's Standards anticipate international banking rules for better banking activity and risk prevention, which are presented as recommendations. Basel's fourteen principles, released in 2010, have recently been reviewed in October 2014. In these fourteen principles, in addition to preventive mechanisms such as the system of rewarding managers, disclosure and transparency, employee reporting systems to the board of directors, the way to select the board members, etc., specific bank roles have also been predicted or strengthened which is for prevention of crimes. For examples, we can mention the role of chief risk officer (CRO) and chief channel officer (CCO).
The prevention of bank embezzlement by establishing corporate governance systems is of paramount importance. The occurrence of this crime necessarily involves a series of crimes and offenses, including false accounting, one-sided audits and supervision, and collusion between managers and employees that provides a setting for committing crimes. Effective governance of corporate governance systems in the country's banking network can easily limit the scope of this crime and pay more attention to preventing aspect rather than punishing severe executions and imprisonment for their perpetrators.
The displacement and so-called cleaning of these illegitimate funds by the bank's network can generate a variety of corruption in the direction of hidden revenues and further strengthen the productive and illegitimate infrastructure. Therefore, the formulation of anti-money laundering regulations in the banking system of the country (quite seriously and operationally) and, more importantly, its principled implementation, is one of the essential requirements that should be in line with the strengthening of the corporate governance of the Iranian banking system. Therefore, it is imperative that the corporate governance institution, or in other words, Corporate Leadership in the interests of transparency, accountability and justice and observance of operating rules, in order to prevent bank offenses.
In the current situation, the Central Bank of Iran is structurally subordinated to the level of authority in order to impose corporate governance regulations in banks, and thus to respond to the consequences of monetary policy.
Obviously, with the establishment of corporate governance in the country's banking system, instead of adopting a criminal law approach by the legislator, a crime prevention approach has to be taken that has not paid special attention to the Iranian legal system. There is no doubt that criminal law should not be relied upon as long as it is possible to predict appropriate legal systems to prevent the occurrence of crimes in the banking sector.
In fact, corporate governance is a regulatory tool used by economic entities, especially financial institutions, to monitor activities and to achieve goals such as accountability, transparency, justice, and respect for stakeholders' rights. And in fact, determines the structure by which the goals of the organization are formulated and the means for achieving these goals and monitoring the performance are specified.
In this regard, the philosophy behind the formation of the Basel Committee in response to a global need for cooperation in the field of banking supervision, including the provision of regulatory guidelines and recommendations, encourages convergence in the use of banking standards and practices in countries with the aim of providing health and safety of the banking sector. In fact, corporate governance follows a unique approach as a mechanism for protecting values and business relationships. This mechanism is in full compliance with business codes, codes of ethics, code of conduct, ethical charter, and ... as well as local corporate laws and commercial laws.
Scientific research
Abstract
Introduction
Natural resources degradation and depletion necessitates an efficient normative conservation model in the international and national legal systems. Due to the high value of natural resources some of the legal systems have attended to enhance conservation of these resources through the highest ...
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Introduction
Natural resources degradation and depletion necessitates an efficient normative conservation model in the international and national legal systems. Due to the high value of natural resources some of the legal systems have attended to enhance conservation of these resources through the highest and supreme rules. One of the main causes of natural resources degradation is overconsumption and unsustainable usage patterns. In this regard, the legal system faces with this question that how the sustainable production and consumption can be legally normalized and institutionalized to reduce natural resources depletion? One subtle mechanism taken by some legal system has been enshrining sustainable production and consumption of natural resources in the higher legal documents specially constitution which is called constitutionalization. During consitutionalization process a social or environmental value to be better respected and embedded in the legal order is enshrined in the constitution and ordinary laws. Now how has this process happened in promotion of sustainable production and consumption in the legal system of Iran?
Theoretical frame work
Theoretically constitutionalization of sustainable production and consumption as a part of constitutionalization of environmental protection trend is based on sustainable development principle according to which the legal, social and economic system should promote the fair and reasonable patterns of resources usage. Constitutionalization legalizes and enhances the sustainable production and consumption through three process: stipulation of the norm in the constitution, entrenchment of the norm through the constitutional justice process and enactment of proper laws for legal development of sustainable methods of production and consumption. These are the three pillar of constitutionalization which lead to legal development of sustainable production and consumption norms. In this way constitutionalization builds a new legal order to proliferate the developing rules for sustainable production and consumption.
Methodology
This article based on analytical method exercises the path that the legal systems, inter alia Iran, have chosen to enhance the natural resources by normalization of production and consumption. In doing so it studies the reasons for constitutionalization of sustainable production and consumption, then analyzes the laws and regulations passed in this regard and finally and procedure of the Guardian Council Constitution and Administrative Justice Court of Iran in entrenchment of this norm.
Results & Discussion
Sustainable production and consumption has been stipulated in some of international and national documents. For example UN in its resolution (UN/A/RES/70/208) urges the states to enter the sustainable methods of production and consumption in their national legal system. Rio+ 20 Statement (UNGA Res. 66/288) also emphasizes on this issue as a pillar of green economy. The constitution of Ecuador (2008) urges the state to encourage socially and environmentally responsible consumption in the society (Article 384.9). Because of high importance of natural resources, the constitution of Iran has stipulated this norm prohibiting overconsumption and wastage (Principle 43.6) and irreversible degradation of environment (Article 50) as the first pillar of constitutionalization. However the Guardian Council of Constitution during its activities in constitutional enhancement has had no contribution in development of this norm referring to these principles in their proceedings except in one case. While the Parliament enacts a plenty of laws every year which are able to impact on the natural resources quality directly and indirectly. Also the Administrative Justice Court which is responsible for the judicial review of state regulations has not referred to these principles. So the second pillar of which has not been constructed. So constitutional order in sustainable production and consumption has not been yet developed. In the third pillar a plenty of laws and bylaws passed aiming natural resources conservation and indirectly promotion of sustainable production and consumption like the Five-Years Development Plan Acts, Act on Efficiency Increase in the Agriculture and Natural Resources Sector (2009) and Act on Energy Consumption adjustment (2009).
Conclusions & Suggestions
It concludes that since the Principle 43.6 and 50 of the constitution paves the way for normalization of sustainable production and consumption. the second and third pillar of constitutionalization of sustainable production and consumption must be enriched by more precise supervision of the Guardian Council of Constitution through over the Acts and enactment of appropriate Acts by the legislator for promotion of sustainable production and consumption of natural resources. In doing so firstly an integrated collection of legal, economic, cultural and societal actions should be done. In the legal aspect laws and regulations should urge the public and private bodies to promote sustainable patterns of production and consumption through natural resources conservation, enhancement of eco-design and production standards, enforcement of reuse and recycling systems, enforcement of efficiency in energy consumption, encouragement of reasonable and economic consumption patterns and technology development. The other required action is institutional environment reform for increasing efficiency and productivity in organizations, bureaucracy reduction and financing reform. Because sustainable production and consumption can be promoted just in an efficient institutional environment based on clear and effective rules of productivity and conservation of resources.
Scientific research
Rouhollah Rezaie; Ebrahim Abdipuor Fard
Abstract
Introduction
In today's business, the most important and common method of international payment is documentary credit or L/C which is widely used by traders and commercial companies as a tool for financing and payment in international transactions. One of the purposes of documentary credit as a method ...
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Introduction
In today's business, the most important and common method of international payment is documentary credit or L/C which is widely used by traders and commercial companies as a tool for financing and payment in international transactions. One of the purposes of documentary credit as a method of payment in international commercial transactions is to facilitate the process of international trade. However, due to its special features such as reliance on documents, spatial distance between buyer and seller, lack of efficient legal prosecution mechanisms and differences in the approach of legal systems at the international level, it can increase the risk of fraud in international payments. Although in most cases the L/C applicant (buyer) has been abused as the main victim of fraud, it can generally be said that all those involved in L/C may be victims of fraud. Despite the fact that so far in most cases, the L/C applicant (buyer) has been abused as the main victim of fraud, but the expansion of new methods of fraud in L/C has led to an increase in cases in which the beneficiaries, insurance companies and involved banks have also been deceived. Therefore, the issue of fraud and its prevention methods is very important for all those involved in documentary credits.
Theoretical Framework
Given that traditional methods of dealing with fraud in documentary credits such as civil remedies and criminal penalties are not effective in combating fraud, in this paper, risk management mechanisms with focus on a preventive approach to minimize the risk of fraud in documentary credits and necessary and possible measures may be taken to avoid those frauds that may actually occur in the process of preparing and submitting documents, are considered. Our research is based on the hypothesis that by taking the practical measures mentioned in this research by those involved in the process of payment through L/C, the risk of fraud will be minimized and this approach is more effective than other countermeasures against fraud, such as legal or criminal litigation against a fraudster.
Methodology
The method for collecting information is a library method. We studied statutes, regulations, cases as well as articles and books about this topic. In this comparative study, the method of thinking is the descriptive-analytical method.
Results and Discussion
Although fraud is one of the oldest and most well-known phenomena in the business world, it is very difficult to detect and manage. In practice, an important fraud may never occur, but efficient risk management can keep the business one step away from fraudsters. Due to the irreparable damage that the issue of fraud can cause, it is necessary for every company to have an effective system for prevention, detection and response to fraud. In particular, the following are the key points for the company's success in developing a counter-fraud system: The first is to take advantage of a proper internal organizational charter and adopt a proper anti-fraud policy. The second is to train the company's employees in the direction of awareness and care towards identifying the symptoms of fraud or the possibility of its occurrence, and the third is to eliminate the effective problems in the occurrence of fraud and ensure their elimination. Therefore, an appropriate anti-fraud policy should include four measures on its agenda: prevention, identification and detection, deterrence, and ultimately appropriate response to fraud. To counter fraud, prevention and deterrence must go hand in hand. Therefore, when drawing up a counter-fraud trend or mechanism, the business should consider both. However, even the most extreme controls may not be effective against professional fraudsters, so a proper enforcement program is needed to detect fraud. Once the fraud has been identified and discovered, it is necessary to respond appropriately. Therefore, in order to manage the risk of fraud, in particular, it is necessary to take preventive measures before the actual occurrence of fraud, in order to control and prevent its harmful consequences. All those involved in documentary credit, in turn, can play a role in preventing fraud in the process of payment by documentary credit by taking a risk management approach and taking precautionary measures against fraud. The buyer's preventive measures as the main victim of fraud include: checking the seller's credit, checking the capacity and location of the contractual vehicle, using an independent inspector, using the usance draft, Including the condition of "purchasing after the approval of the goods", confirming the authenticity of the bill of lading, requiring the carrier to send the bill of lading to the bank, using the performance guarantee, obtaining insurance policy and export credit insurance and finally requesting electronic submission of documents. On the other hand, the seller can minimize the risk of fraud by selecting a reputable customer, carefully reviewing L/C provisions before accepting them, carefully arranging the main sale contract, and improving intra-organizational relationships and cooperation with banks. The steps that banks must take to prevent fraud in documentary credits include: providing extraordinary services, doing extraordinary checks in the likelihood of fraud, caution in daily activities and use of the services of the International Chamber of Commerce. Finally, lawyers and legal advisers of the parties involved in documentary credits should also have the necessary skills and strategies to adopt a preventive and proactive approach in providing advice to their clients and arranging contracts and managing contractual risks.
Conclusion and Suggestions
Fraud can impose irreparable costs on a trader or business, so it is important to keep the risk of fraud at the center of the risk management system of commercial companies and the same is true of L/C risk fraud management. There are a number of reasons for fraud in L/C, most of which include the payment of L/C by the bank in exchange for merely presenting documents that appear to comply with L/C requirements, the geographical distance between the LC applicant and the beneficiary and the lack of an internationally accepted legal framework for fraud prevention. Therefore, it is necessary that all parties involved in L/C, including the applicant and the beneficiary, banks involved in L/C and legal advisers of the parties, in turn, prevent and minimize the possibility of fraud in international transactions involving L/C by taking preventive and deterrent measures. However, identifying preventive methods and measures using legal solutions to prevent any fraud and misuse of documentary credits is an important issue that in international business management, its importance and necessity is undeniable. Since Iranian law does not provide for rules on documentary credits and countering fraud, Iranian banks comply with UCP regulations under the Monetary and Credit Council enactment and these regulations also do not address the issue of fraud in documentary credit, so it seems necessary for the central bank to establish special regulations and to develop guidelines in this regard.
