Crime in The Field of Banking by Using The Weakness of Letter of Credit

Leng, Pwee (2017) Crime in The Field of Banking by Using The Weakness of Letter of Credit. In: International Conference on Management and Entrepreneurship, 15-07-2017 - 15-07-2017, Bali - Indonesia.

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Abstract

Letter of Credit (LC) is highly desirable and wide acceptance in the trading community because LC considered to carry low financial risk. Behind its use, the LC turns often misused by external actors even aided by unscrupulous internal bank to make fictitious transactions, create a letter or false documents as a condition for payment. This paper discusses the occurrence of criminal acts in the banking sector by exploiting weaknesses in the LC that make the bank as a victim and also a means to commit crimes such banking. The discussion in this paper emphasized on the application of laws and regulations applicable to indict the perpetrators of criminal acts in the banking sector by exploiting weaknesses of LC. Aspects of the discussion of a criminal offense based on the special legal of banking, Act No. 10 of 1998 concerning Banking for the perpetrators of bank�s internal, and under the provisions of the Penal Code for persons outside the bank.

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