1.1 BACKGROUND TO THE STUDY
Today’s international shipping involves people of many different nationalities with different laws, customs and institutions. Where world economies in the past were the result of empires, the present world economy grew out of relatively free exchange. Today’s shipping community comprises shippers, charterers, ship owners, bankers, insurers, importers, and exporters and the system designed for the transfer of goods is simple and efficient, with the sea remaining the life blood of trade. In international trade, as a matter of custom, the seller gets paid before the buyer receives the goods, as because the delivery of goods takes considerable time. The system of letters of credit involved with banks as the intermediaries has proved fruitful and documents rather than goods form the focal point of these transactions.
Fraud is a very insidious crime and arises when one of the parties to the marine contract; succeeds in obtaining money or goods belonging to another party connected in the carriage and financing unjustly. The threat of fraud is that it undermines the system by putting trust’ at risks. The simplicity of the system of international trade makes it attractive and vulnerable to forgers, scuttlers and cheats. Maritime frauds takes place when any one of the various parties involved in an international trade transaction intentionally deceives another as to some fact or circumstance in’ connection with maritime activities which enables him to obtain money or goods dishonestly. In some cases, several of the parties act in collusion to defraud another.
Fraud is as ancient as commerce itself, with examples going back to the Roman world and before. The International Maritime Bureau defined maritime fraud as: “An international trade transaction involves several parties buyer, seller, ship owner, charterer, ship’s master or crew, insurer, banker broker or agent. Maritime fraud occurs when one of these parties succeeds, unjustly or illegally, in obtaining money or goods from another party to whom, on the face of it, he has undertaken specific trade, transport and financial obligations.”