BUS
108 Export/Import
Letter of Credit Exam 54
points
The
following questions arespecific to the
letter of credit (L/C) you have been given.
Answer them based on informationcontained
in the L/C. (Note: Brazilians date their documents
like the Europeans do: year –month –day. So 940925 is September 25, 1994 [yes,
a long time ago].)
1.
What is the name and address of
the opening/issuing bank? (2 points)
2.
What is the name and address of
the advising bank? (2 pts)
3.
Identify the beneficiary of the
L/C : (2 pts)
4.
What is the tenor of the draft
that will be presented under this L/C? (2 pts)
5.
When will the letter of credit
expire and where? (4 pts)
6.
How does the letter of credit
describe the goods? (2 pts)
7.
By what date do the goods have
to be exported? (2 pts)
8.
What specific documents
described in the L/C must be presented to the bank in order to fulfill the
terms and conditions and for the exporter to be paid? (6 pts)
9.
Comment on the following: The
exporter actually makes shipment on the 5th of September.(6 points)
10.
The exporter actually makes
shipment on the 1st of September. By what date do the documents have
to be presented to the bank? (2 pts)
11.
What two reference numbers must
appear on every document presented to the banks under the L/C? (4 pts)
12.
How many shipments are allowed
under this L/C (one, 2 or more than 2)? (2pts)
The
following questions aregeneral questions
pertaining to letters of credit. They are not specific to the L/C you have
been given.
13.
What is the term for ‘mistakes’
in documents or in meeting other requirements of the L/C? (2pts)
14.
Exporter ABC Company does not
believe they can meet the terms and conditions of the letter of credit and asks
that changes be made. What is the name of the document that will be sent to the
exporter advising that changes to the letter of credit terms and conditions
have been made? (2 pts)
15.
What doesSWIFTmean? (2 pts)
16.
What is the difference between
a confirmed and an unconfirmed letter of credit? (4 pts)
17.
Comment on the following
situation: (4 pts)
The issuing bank’s letter of credit has
been advised and is now in the hands of the exporter. The exporter makes shipment and delivers the
documents to the bank, all within the timeframes specified by the L/C. However,
the importer has decided they no longer want the goods and have instructed
their bank not to pay the draft when it is presented and to cancel the L/C. The
importer agrees to pay for return freight back to the exporter.
18.
What is the difference between
a letter of credit and a documentary collection? (4 pts)
