Background:

Financial institutions play a key role in issuing, confirming, negotiating and settling Letters of Credit (LC) which are commonly used for international trading transactions. Despite their extensive use, many cases of fraud involving LCs have been reported. Banks have lost significant amounts from such frauds.

Your task:

For the purpose of this task, you need to identify any reported case of LC fraud and critically examine the case. You should then write a report covering the following, in that order:

1) Explain the background of the case

2) Identify the root cause(s) of the problem

3) Determine the consequence(s) faced by the financial institution(s)

4) Recommend actions that can be taken to avoid a repeat of similar occurrences in the future.