• International Commerce and Information Review
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• v.10 no.3
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• pp.239-261
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• 2008

Documentary credit transactions are judged by the principle of strict compliance. The compliance of the tendered documents with the credit's teams ensures the proper completion of the underlying transaction. But if the documents tendered by beneficiary differ, a discrepancy of documents occurs. Such a discrepancy raises difficult problems for the bank to which the documents are tendered. It has to decide whether to reject or accept them or to accept them under a protective mechanism. Therefore, this study is to examine the case study of complying presentation of the description of the goods in documentary credit through the Korean Supreme Court Cases. The objectives of this paper are as follow : 1. To examine two point of views on document compliance such as strict compliance and substantial compliance. 2. To analyze Korean Case Law which challenges the legal conclusions, standard for examination of documents and New ISBP. 3. To draw out the criterion for conformity and discrepancy of description in invoices and WC and to provide the guidelines for determining the nature and extent of an issuing bank's duty of documentary compliance. 4. Finally to suggest some implications through the Korean case law. By using the examination standards for description of goods suggested in Korean Case Law and New ISBP, the traders will be able to prepare documentation more perfectly and document checkers will be able to examine the negotiation documents more easily.

• The Korean Journal of Financial Management
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• v.27 no.1
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• pp.181-208
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• 2010

In July 2007, Korean government has passed "The Capital Market and Financial Investment Services Act" to further develop the capital markets and the Act was to become effective in February 2009. Using a large sample of Korean firms, we have examined (i) the effect of underwriting activities on the firm value (bond spread) comparing commercial bank and investment bank, and (ii) the determinants of the firm value changes following underwriting activities of bank. To test our goal, we collected a wide range of samples of data for bond issuing activities executed by Korean firms listed on the Korea Stock Exchange (KSE) between 2000 and 2003. Our paper is distinguished from previous studies on this subject in a way that we analyzed the effect of corporate bond underwriting activities with regard to commercial banking and investment banking. Initially, we set up a hypothesis that "Certification View" and "Conflict-of-interest View" are major driving forces behind cross-firm differences in performance following bond issuance. We find that, in general, underwriting by investment bank (securities company) brings a positive effect on the firm value (spread between bench mark rate and bond issuing rate). This result indicates that firm value has been negatively affected by the bank underwriting and provides the evidence for "Conflict-of-interest View" in Korea. Our studies have also revealed that any change in firm value following bond issuance is positively related with the firm size (total asset), operating performance, liquidity (cashflow), and equity ownership by foreign investors. Overall, our results support the view that bank underwriting activities can play an important role in determining firm value and financial strategies under "The Capital Market and Financial Investment Services Act" of 2007.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.46
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• pp.133-158
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• 2010

Independent guarantee is a creation of the need from the both sides, i.e. the applicant (principal debtor) and the beneficiary (creditor). The former used to have to deposit cash in favor of the beneficiary in case of his default, which laid a burden on his liquidity while the latter still wanted to have the equivalent to cash. Independent guarantee satisfied the both parties by freeing the applicant of a deposit and maintaining the beneficiary's right at the same time. The fact that independent guarantee has three payment mechanisms is not widely known to the public. They are (i) payment on first demand, (ii) payment upon submission of third-party documents, (iii) payment upon submission of an arbitral or court decision. From the applicant's point of view, the order in his favor is (iii), followed by (ii) and (i). As there shouldn't be a case where one party is at a disadvantage against the other, useful insight is being sought for the benefit of the applicant. First, the applicant can offer his intention to provide a payment mechanism (ii) or (iii) rather than (i) if he must deliver it. Second, if the beneficiary still wants to have (i) and the applicant is in a position not to reject it, the latter should thoroughly check any provisions that may work against him later. Third, the applicant could use counterbalancing provisions in underlying contract to cope with protective clauses in the guarantees. Forth, the applicant should review the beneficiary's sincerity to prevent unfair calling risks. The applicant may use an ECA(Export Credit Agency) in his country to which he can transfer not only unfair calling risks, but also political risks. On the other hand, a bank needs to keep the following advice in mind. The foremost important thing for the bank not to forget is that it provides a guarantee as a service provider, not as a responsible party for the feasibility of the project, etc. Credit risk of the applicant should require the greatest attention when issuing a guarantee: the bank should look into the possibility that it can procure immediate reimbursement from its customers after payment to the beneficiary. Second, the applicant's ability to complete the project should be reviewed by checking its track records, techniques and reputation, etc. Third, the bank may also use an ECA to cover the beneficiary's unfair calling risks as well as political risks. In the case of Korea, as Korea Export Insurance Corporation(KEIC) can cover all the risks mentioned above, the bank could use its service called 'Export Bond Insurance.' What's better for the bank is that ECA cover can enhance the bank's asset quality by putting it zero on its risk weighted asset.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.58
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• pp.179-213
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• 2013

While a performance type guarantee is required as a security for non-performance risk by a seller, a payment guarantee is used as a security for non-payment risk by a buyer(or a borrower in a loan agreement). A payment guarantee is a type of independent bank guarantee, bank guarantee, bond, demand guarantee, or standby letter of credit. A guarantor accepts a credit risk of a principal which is normally a buyer in a contract for sale of goods. A payment guarantee is independent of the underlying relationship between the applicant and the beneficiary. The guarantor is only empowered to examine the beneficiary's demand and determine the payment on its face to the terms of the guarantee. A payment guarantee is thus different from a suretyship. The principle of independence carries a significant advantages for a guarantor as well as for a beneficiary. While a documentary credit requires B/L, commercial invoice, packing list, inspection certificate, etc., a typical payment guarantee does not require any evidence for a seller's performance of the underlying contract other than written demand. In this respect payment guarnatee can be a more secured facility than a documentary credit. A payment guarantee normally comes into force from the issuing date and shall remain in effect until all sums guaranteed shall be paid in full by a buyer(or a borrower) or by a guarantor. Although a guarantor shall pay a demand made in accordance with the terms and conditions of the payment guarantee, a payment demand may be denied when it is determined to be abusive or unfair.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.12
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• pp.405-427
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• 1999

Although Uniform Customs and practice for Documentary(UCP) is not a law, it applies to most documentary credits and is binding on all parties unless otherwise expressly stipulated. Besides, Uniform Commercial Code(UCC) Article 5 was codified by the United States and was adopted by every state. Moreover, the New York version of the UCC Article 5-102(4) specifically providing that the UCC does not apply to letters of credit where the parties agree to be governed by the UCP. Identical nonuniform Articles were latter added in Alabama, Arizona, and Missouri. The fact that courts in forty-six of the fifty states are bound by Article 5. Until now, Article 5 of the UCC has probably had an impact on the decisions in New York and the New York common law. Therefore, I examined a few issues on application between Article 5 of the UCC and the UCP. First, although the UCP attempt to introduce a new for examination of document by incorporating "standard practice of financial institutions" and "international banking practice", the standards for documentary compliance are not clear. The UCC attempt to rely on the matter of interpretation for the court, but the UCP would probably be interested in examining in about bank's internal practices as reflected in UCP Articles. Second, the rule for nondocumentary conditions is a useful for stand-by credit transactions under the UCC, but these conditions would probably put the bank in an even worse position in case of documentary credit transactions under the UCP. Third, the UCP does not contain any provision governing the fraud exception, but the UCC codified the fraud and forgery rules developed through American case law. Fourth, the UCP treats the issue of transfer in much more detail than the UCC does. In contract, the UCP's treatment of assignment of proceeds is brief. Finally, I suggest that the fraud exception rules should be prescribed in the UCP in order to protect the issuing bank and the applicant when an unscrupulous party attempts to defraud.

• Korean Journal of Clinical Laboratory Science
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• v.36 no.2
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• pp.158-162
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• 2004

The over-preparation of blood for elective surgery causes some problems such as returning of blood, inefficient task and loss of reagents. In recent blood transfusion practice, there has been changing patterns of blood use in elective surgery as various side effects of transfusion have become known and operation techniques are developed. This study was performed to evaluate the optimal utilization of blood for various elective and/or emergency surgery. We surveyed the quantity of blood transmitted to wards, returned to blood bank, and the number of crossmatching test done for the elective surgery of the patients at the D. University Hospital, the tertiary teaching hospital from August 1, 2001 to October 31, 2001. Crossmatched to transfusion ratio (C/T ratio) was calculated, in which C means the unit of accomplished crossmatching test and T means the unit of transfused blood component. The unit of transfused blood was analysed in terms of issuing time, sex, age, clinical department, and blood component type. The usage of bloods for the emergency surgery was also analyzed. In our study, C/T ratio was highest on Monday (1.54) and Tuesday (1.53), and higher in female patients(1.54) than in male patients (1.32). No significant relationship was observed between age groups. Among clinical departments, thoracic and cardiovascular surgery showed the highest C/T ratio (1.54). From above results, we could be sure that the management of transfusion practice was relatively appropriate in recent years, although the entire introduction of type and screen (T&S) method was desirable. If the T&S method is performed, the C/T ratio would be almost 1.00 and it would also relieve the duty of blood bank.

• KDI Journal of Economic Policy
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• v.41 no.4
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• pp.1-44
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• 2019

The contingent convertible bond (or CoCo) is designed as a bail-in tool, which is written down or converted to equity if the issuing bank is seriously troubled and thus its trigger is activated. The trigger could either be rule-based or discretion-based. I show theoretically that the bail-in is less implementable and that the associated bail-in risk is lower if the trigger is discretion-based, as governments face greater political pressure from the act of letting creditors take losses. The political pressure is greater because governments have the sole authority to activate the trigger and hence can be accused of having 'blood on their hands'. Furthermore, the pressures could be augmented by investors' self-fulfilling expectations with regard to government bailouts. I support this theoretic prediction with empirical evidence showing that the bail-in risk premiums on CoCos with discretion-based triggers are on average 1.13 to 2.91%p lower than CoCos with rule-based triggers.

• Journal of the Korea Institute of Information Security & Cryptology
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• v.13 no.1
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• pp.3-10
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• 2003

In this paper, a partially blind signature schemes baled on EC-KCDSA is proposed and we applied it to design an electronic check payment system. Because the proposed partially blind signature scheme uses elliptic curve cryptosystem, it has better performance than any existing schems using RSA cryptosystem. When issuing a refund check, one-time pad secret key is used between the bank and the customer to set up secure channel. So the symmetric key management is not required.

• Journal of the Korea Institute of Information Security & Cryptology
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• v.21 no.6
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• pp.109-117
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• 2011

We can use document issuance services provided by a school, bank, hospital, company, etc. either by visiting those facilities or by simply visiting their Web sites. Services available through the Internet allow us to use the same services as we do by actually going to those facilities at home or office any time. As much as it saves us time and money, there also arises a problem of information being forged on the Internet or on a printed document. There has to be security functions to deal with the problem. This paper intends to think of the possible security threats and draw out the necessary security functions that an on-line document issuance system should have based on the CC v3.1, so that anyone can use it as reference when they evaluate or introduce the system.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.22
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• pp.137-171
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• 2004

Under Article 2 of the Uniform Customs and Practice for Documentary Credits (1993 Revision. UCP), letter of credit means an arrangement whereby an issuing bank is to make a payment to a beneficiary, or is to accept and pay bills of exchange drawn by the beneficiary, or authorises another bank to effect such payment, or to accept and pay such bills of exchange, or to negotiate, against stipulated document(s), provided that the terms and conditions of the letter of credit are complied with. In letter of credit operations, all parties concerned deal with documents, and not with goods, services and/or other performances to which the documents may relate (UCP, Article 4). It is important to note that under UCP, if a letter of credit contains conditions without stating the document(s) to be presented in compliance therewith, banks will deem such conditions as not stated and will disregard them (Article 13 c). Section 5-108(g) of the Uniform Commercial Code also contains a similar provision. However on several occasions the Korean Supreme Court held that non-documentary conditions in letter of credit governed by UCP could be regarded as valid, although they were not desirable in the context of letter of credit transactions. The rationale underlying the decisions was that parties to the letter of credit transactions are free to determine the terms and conditions of the relevant letter of credit. After reviewing the relevant provisions of UCP, UCC, the International Standby Practices (ISP98) and the Supreme Court decisions of Korea, the author suggests that we classify conditions that do not require any documents (so called apparent non-documentary conditions) into two categories and treat them differently. There are apparent non-documentary conditions that are consistent with the nature of letter of credit and those which are inconsistent with the nature of letter of credit. In the first category there are two sub-categories, (i) those which are valid and (ii) those which are invalid and thus should be disregarded. In the second category there are two sub-categories, (i) those which are invalid and thus should be disregarded and (ii) those which are valid but deprive the instrument of the nature as letter of credit.