BUS 108 Export/Import Letter of
Credit Exam 54 points
The following
questions are specific to the letter of
credit (L/C) you have been given.
Answer them based on information contained
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 are general 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 does SWIFT
mean? (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)
