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Article 31 : Partial Drawings or Shipments

1. A LC is issued for about USD 300,000 prohibiting partial shipment. Which of these drawings is discrepant?A. USD 285,000B. USD 290,000C. USD 315,000D. None of the above2SLIDE #

1. A LC is issued for about USD 300,000 prohibiting partial shipment. Which of these drawings is discrepant?A. USD 285,000B. USD 290,000C. USD 315,000D. None of the above3SLIDE #

02. Extract from a LC:• Amount: EUR 10,000• Goods: 1,000 pairs of running shoes• Partial shipment: Allowed• Which of the following presentations are NOT acceptable under the above LC:A. Invoice for EUR 9,000 covering 900 pairs of running shoes of grade A 74B. Invoice for EUR 8,000 covering 990 pairs of running shoesC. Invoice for EUR 10,000 covering 1,008 pairs of running shoes4SLIDE #

02. Extract from a LC:• Amount: EUR 10,000• Goods: 1,000 pairs of running shoes• Partial shipment: Allowed• Which of the following presentations are NOT acceptable under the above LC:A. Invoice for EUR 9,000 covering 900 pairs of running shoes of grade A 74B. Invoice for EUR 8,000 covering 990 pairs of running shoesC. Invoice for EUR 10,000 covering 1,008 pairs of running shoes5SLIDE #

03. Documentary credit is silent regarding partial shipment. Whether partial shipment is permitted or not permitted?.A. PermittedB. Not permittedC. Do not Know6SLIDE #

03. Documentary credit is silent regarding partial shipment. Whether partial shipment is permitted or not permitted?.A. PermittedB. Not permittedC. Do not Know7SLIDE #

04. What is Partial shipment?A. Indirect shipment from one port to anotherB. Shipment through more than one vesselC. Transfer of goods from one vessel to another vesselD. Shipment of goods in more than one lot8SLIDE #

04. What is Partial shipment?A. Indirect shipment from one port to anotherB. Shipment through more than one vesselC. Transfer of goods from one vessel to another vesselD. Shipment of goods in more than one lot9SLIDE #

06. Credit prohibits partial shipments. Beneficiary makes three separate shipments on different dates, from different ports, to the same destination through the same vessel and makes a single presentation. The B/L shows the following on boarding dates• 02nd March• 04th March• 05th March• Documents are to be presented to the negotiating bank within 15 days from the date of shipment. The latest date by which beneficiary could present the documents for negotiation is:A. 16th MarchB. 18th MarchC. 19th MarchD. 20th March10SLIDE #

06. Credit prohibits partial shipments. Beneficiary makes three separate shipments on different dates, from different ports, to the same destination through the same vessel and makes a single presentation. The B/L shows the following on boarding dates• 02nd March• 04th March• 05th March• Documents are to be presented to the negotiating bank within 15 days from the date of shipment. The latest date by which beneficiary could present the documents for negotiation is:A. 16th MarchB. 18th MarchC. 19th MarchD. 20th March11SLIDE #

07. A documentary credit is received without a stipulation of whether partial shipments are allowed or not in this case.A. They are allowedB. Refer to the Issuing bankC. Refer to the BeneficiaryD. They are prohibited12SLIDE #

07. A documentary credit is received without a stipulation of whether partial shipments are allowed or not in this case.A. They are allowedB. Refer to the Issuing bankC. Refer to the BeneficiaryD. They are prohibited13SLIDE #

Article 32 : Instalment Drawings or Shipments

1. Credit stipulates installment shipment as below:• 100 Units before 31st January• 225 Units during the month of February• 175 Units between 20th to 24th March• 200 Units after 5th April but before 10th April• Which of the following shipments are acceptable?A. 100 Units on 27th JanuaryB. 225 Units on 15th FebruaryC. 175 Units on 31st MarchD. 200 Units on 8th AprilOptions:A. A & B onlyB. A, B & C onlyC. A, B & D onlyD. B, C & D only15SLIDE #

1. Credit stipulates installment shipment as below:• 100 Units before 31st January• 225 Units during the month of February• 175 Units between 20th to 24th March• 200 Units after 5th April but before 10th April• Which of the following shipments are acceptable?A. 100 Units on 27th JanuaryB. 225 Units on 15th FebruaryC. 175 Units on 31st MarchD. 200 Units on 8th AprilOptions:A. A & B onlyB. A, B & C onlyC. A, B & D onlyD. B, C & D only16SLIDE #

02. A documentary credit indicates the following instalmentdrawing schedule: USD50,000 to be drawn in April. USD50,000 to be drawn in May. • Which of the following is correct? The:Select one:A. Documentary credit must prohibit partial drawings.B. Beneficiary cannot draw in May if it did not draw in April. C. liability of the issuing bank at the time of issuance is USD50,000.D. beneficiary can draw USD40,000 in April and USD60,000 in May. 17SLIDE #

02. A documentary credit indicates the following instalmentdrawing schedule: USD50,000 to be drawn in April. USD50,000 to be drawn in May. • Which of the following is correct? The:Select one:A. Documentary credit must prohibit partial drawings.B. Beneficiary cannot draw in May if it did not draw in April. C. liability of the issuing bank at the time of issuance is USD50,000.D. beneficiary can draw USD40,000 in April and USD60,000 in May. 18SLIDE #

03 A credit allowing partial shipment includes the following shipping schedule: Quantity Shipment period1,000 yards Latest by 15th March2,500 yards 16th March to 15th April2,000 yards Latest by 15th May3,000 yards 16th May to 31st MayWhich of the following shipments made by the beneficiary under the LC is acceptable?A. 1000 yards shipped on 15th March• 2800 yards shipped on 04th April• 2000 yards shipped on 10th April• 3100 yards shipped on 18th MayB. 750 yards shipped on 15th March• 1900 yards shipped on 25th March• 2600 yards shipped on 17th April• 3000 yards shipped on 28th MayC. 3100 yards shipped on 02nd March• 2550 yards shipped on 25th March• 2900 yards shipped on 16th MayD. 1950 yards shipped on 14th March• 3600 yards shipped on 14th April• 3300 yards shipped on 16th May19SLIDE #

03 A credit allowing partial shipment includes the following shipping schedule: Quantity Shipment period1,000 yards Latest by 15th March2,500 yards 16th March to 15th April2,000 yards Latest by 15th May3,000 yards 16th May to 31st MayWhich of the following shipments made by the beneficiary under the LC is acceptable?A. 1000 yards shipped on 15th March• 2800 yards shipped on 04th April• 2000 yards shipped on 10th April• 3100 yards shipped on 18th MayB. 750 yards shipped on 15th March• 1900 yards shipped on 25th March• 2600 yards shipped on 17th April• 3000 yards shipped on 28th MayC. 3100 yards shipped on 02nd March• 2550 yards shipped on 25th March• 2900 yards shipped on 16th MayD. 1950 yards shipped on 14th March• 3600 yards shipped on 14th April• 3300 yards shipped on 16th May20SLIDE #

04. According to article 32, if a beneficiary does not ship the goods within the period allowed for an instalment, the credit will cease to be available for that and any subsequent instalment. If an instalment is missed and the beneficiary requests the applicant to amend the credit in respect of the shipment schedule, is the credit still available for that and any subsequent instalment? 21SLIDE #

04. According to article 32, if a beneficiary does not ship the goods within the period allowed for an instalment, the credit will cease to be available for that and any subsequent instalment. If an instalment is missed and the beneficiary requests the applicant to amend the credit in respect of the shipment schedule, is the credit still available for that and any subsequent instalment? • Yes,……………. the applicant may request that the issuing bank issue an amendment to reinstate the schedule and the credit. Article 3222SLIDE #

Article 33:Hours of PresentationA bank has no obligation to accept a presentation outside of its banking hours.

Article 34 :Disclaimer on Effectiveness of Documents

1. Letter of Credit requires presentation of an inspection certificate. The issuing bank receives a complying presentation. The applicant gives a letter to the issuing bank to reject the documents since he has positive information that the quality of the goods shipped are inferior to the goods submitted for inspection. As an issuing bank, what would be your stand?A. Accept the documents and make paymentB. Reject the documents based on applicant’s letterC. Both of the above D. None of the above25SLIDE #

1. Letter of Credit requires presentation of an inspection certificate. The issuing bank receives a complying presentation. The applicant gives a letter to the issuing bank to reject the documents since he has positive information that the quality of the goods shipped are inferior to the goods submitted for inspection. As an issuing bank, what would be your stand?A. Accept the documents and make paymentB. Reject the documents based on applicant’s letterC. Both of the above D. None of the above26SLIDE #

02.Is it part of a bank’s responsibility to ensure that for documents issued by parties other than the beneficiary, that they have been issued by the stated company and signed by an authorized person of that company? 27SLIDE #

02. Is it part of a bank’s responsibility to ensure that for documents issued by parties other than the beneficiary, that they have been issued by the stated company and signed by an authorized person of that company? • Banks have no responsibility with regard to the creation and signing of documents or the data that appears therein. Sub-article 14 (a) and article 34 make it clear that banks determine, based on the documents alone, whether or not, on their face, the documents comply with the terms and conditions of a credit. 28SLIDE #

Article 35 :Disclaimer on Transmission and Translation

SLIDE #301. A bank assumes no liability for:A. Delay in the transmission of messagesB. Loss of messages in transitC. Mutilation of messagesD. All of the above

SLIDE #311. A bank assumes no liability for:A. Delay in the transmission of messagesB. Loss of messages in transitC. Mutilation of messagesD. All of the above

1. Your client (who is the beneficiary) presented documents under a LC available with any bank by negotiation. The documents were found compliant but the beneficiary did not require negotiation of the documents. Documents were lost in transit (on the way to the issuing bank). Which of the following is TRUE?A. The issuing bank is liable to pay as the documents were credit compliantB. The issuing bank is not liable to pay since the documents did not reach their countersC. The issuing bank is not liable to pay as the documents were not negotiated by your bankD. The beneficiary must recreate and resend all original documents in order to get payment32SLIDE #

1. Your client (who is the beneficiary) presented documents under a LC available with any bank by negotiation. The documents were found compliant but the beneficiary did not require negotiation of the documents. Documents were lost in transit (on the way to the issuing bank). Which of the following is TRUE?A. The issuing bank is liable to pay as the documents were credit compliantB. The issuing bank is not liable to pay since the documents did not reach their countersC. The issuing bank is not liable to pay as the documents were not negotiated by your bankD. The beneficiary must recreate and resend all original documents in order to get payment33SLIDE #

02. Nominated bank examines the documents, finds the documents to be in order and forwards to confirming bank to the address specified in the Credit. Docs got lost in transit. Then:A. Nominated bank is responsible and has to pay beneficiaryB. Since the credit is confirmed, confirming bank to reimburse nominated bankC. The issuing bank should reimburse confirming bankD. All the above34SLIDE #

02. Nominated bank examines the documents, finds the documents to be in order and forwards to confirming bank to the address specified in the Credit. Docs got lost in transit. Then:A. Nominated bank is responsible and has to pay beneficiaryB. Since the credit is confirmed, confirming bank to reimburse nominated bankC. The issuing bank should reimburse confirming bankD. All the above35SLIDE #

03. In an unconfirmed Letter of Credit, the nominated bank scrutinizes the documents, finds docs in order and pays the beneficiary. Documents are then forwarded to Issuing bank. In the absence of specific instructions in credit, the nominated bank uses its own delivery service and docs are lost in transit. Which of the following is correct?1. The nominated bank has to get funds back from beneficiary2. The issuing bank has to reimburse nominated bank3. The issuing bank need not reimburse nominated bank, since the nominated bank has used its own delivery service4. The issuing bank can ask copies of documents from Nominated bankOptions:A. 2B. 2, 4C. 3, 4D. 1, 436SLIDE #

03. In an unconfirmed Letter of Credit, the nominated bank scrutinizes the documents, finds docs in order and pays the beneficiary. Documents are then forwarded to Issuing bank. In the absence of specific instructions in credit, the nominated bank uses its own delivery service and docs are lost in transit. Which of the following is correct?1. The nominated bank has to get funds back from beneficiary2. The issuing bank has to reimburse nominated bank3. The issuing bank need not reimburse nominated bank, since the nominated bank has used its own delivery service4. The issuing bank can ask copies of documents from Nominated bankOptions:A. 2B. 2, 4C. 3, 4D. 1, 437SLIDE #

Article 36 : Force Majeure

1. Which of the following statements are FALSE?I. If the beneficiary is unable to ship the goods on the last date for shipment due to a strike in the port, banks will accept documents that evidence shipment on the following business day when the port reopensII. If the beneficiary chooses to present documents directly to the issuing bank (after by passing the nominated bank) but is unable to present documents on the last presentation date as it is a non banking day, the issuing bank will not accept documents presented on the next banking dayIII. If the beneficiary is unable to present documents to the nominated bank on the LC expiry date as it is a non banking day, the nominated bank will accept documents presented on the next banking dayIV. If the beneficiary is unable to present documents to the confirming bank on the LC expiry date as it was closed due to an act of terrorism, the confirming bank is obliged to accept documents presented on the following banking day when it reopens?Options:A. I and IIB. I, II and IIIC. II and IVD. I, II and IV39SLIDE #

1. Which of the following statements are FALSE?I. If the beneficiary is unable to ship the goods on the last date for shipment due to a strike in the port, banks will accept documents that evidence shipment on the following business day when the port reopensII. If the beneficiary chooses to present documents directly to the issuing bank (after by passing the nominated bank) but is unable to present documents on the last presentation date as it is a non banking day, the issuing bank will not accept documents presented on the next banking dayIII. If the beneficiary is unable to present documents to the nominated bank on the LC expiry date as it is a non banking day, the nominated bank will accept documents presented on the next banking dayIV. If the beneficiary is unable to present documents to the confirming bank on the LC expiry date as it was closed due to an act of terrorism, the confirming bank is obliged to accept documents presented on the following banking day when it reopens?Options:A. I and IIB. I, II and IIIC. II and IVD. I, II and IV40SLIDE #

2. A bank assumes no liability or responsibility for the consequences arising out of the interruption of its business byA. Acts of GodB. RiotsC. Civil commotionsD. InsurrectionsE. WarsF. Acts of terrorismG. StrikesH. LockoutsI. All of the aboveSLIDE #41

2. A bank assumes no liability or responsibility for the consequences arising out of the interruption of its business byA. Acts of GodB. RiotsC. Civil commotionsD. InsurrectionsE. WarsF. Acts of terrorismG. StrikesH. LockoutsI. All of the aboveSLIDE #42

03. A bill under a credit is due on 05.02.2008. Issuing bank employees announce a strike on 05.02.2008. In this circumstance, when will the bill be settled - on 04.02.08 or 06.02.08? 43SLIDE #

03. A bill under a credit is due on 05.02.2008. Issuing bank employees announce a strike on 05.02.2008. In this circumstance, when will the bill be settled - on 04.02.08 or 06.02.08? • Answer: As the bank is closed on the date that the payment is due it would be payable on the next working day. However, in most cases the settlement of the bill would require action at some point prior to the due date in order that the funds were received in the place of payment by the due date. In which case, the fact that the issuing bank was closed on the due date would not affect the settlement to the nominated bank or beneficiary on the due date. 44SLIDE #

04 . The beneficiary can mitigate the risk of ‘force majeure’ by requesting that the documentary credit be made available with:A. Any bank.B. The issuing bank.C. The advising bank.D. The confirming bank45SLIDE #

04 . The beneficiary can mitigate the risk of ‘force majeure’ by requesting that the documentary credit be made available with:A. Any bank.B. The issuing bank.C. The advising bank.D. The confirming bank46SLIDE #

05 . By obtaining confirmation beneficiary precludes;A. Country and issuing bank risksB. Goods and foreign exchange risksC. Force Majeure and Foreign exchange risksD. Fraud and Country risks47SLIDE #

05 . By obtaining confirmation beneficiary precludes;A. Country and issuing bank risksB. Goods and foreign exchange risksC. Force Majeure and Foreign exchange risksD. Fraud and Country risks48SLIDE #

Article # 37 Disclaimer for Acts of an Instructed Party

01. A credit states that all banking charges are for the account of the beneficiary. The advising bank is unable to recover its advising charges from the beneficiary as they have filed for bankruptcy. From which of the following parties can the advising bank recover its charges?A. Issuing BankB. ApplicantC. Negotiating BankD. None of the above50SLIDE #

01. A credit states that all banking charges are for the account of the beneficiary. The advising bank is unable to recover its advising charges from the beneficiary as they have filed for bankruptcy. From which of the following parties can the advising bank recover its charges?A. Issuing BankB. ApplicantC. Negotiating BankD. None of the above51SLIDE #

02. A credit is issued with the following clause “All bank charges other than those of the issuing bank are for the account of the beneficiary even if the credit remains unutilized”. The credit expires without being utilized and the beneficiary refuses to pay the advising charges. Which of the following statements is TRUE?A. The beneficiary must pay the advising chargesB. The advising bank can recover the advising charges from the issuing bankC. he advising bank can recover the advising charges from the applicantD. The advising bank should bear the loss of their advising charges52SLIDE #

02. A credit is issued with the following clause “All bank charges other than those of the issuing bank are for the account of the beneficiary even if the credit remains unutilized”. The credit expires without being utilized and the beneficiary refuses to pay the advising charges. Which of the following statements is TRUE?A. The beneficiary must pay the advising chargesB. The advising bank can recover the advising charges from the issuing bankC. he advising bank can recover the advising charges from the applicantD. The advising bank should bear the loss of their advising charges53SLIDE #

03. If a LC subject to UCP 600 is silent regarding payment of charges, thenA. All bank charges are for the account of the beneficiaryB. All bank charges are for the account of the applicantC. All bank charges outside the country of issuance are for the account of the beneficiaryD. All bank charges outside the beneficiary’s country are for the applicant’s account54SLIDE #

Dcharges, thenA. All bank charges are for the account of the beneficiaryB. All bank charges are for the account of the applicantC. All bank charges outside the country of issuance are for the account of the beneficiaryD. All bank charges outside the beneficiary’s country are for the applicant’s account55SLIDE #

04. A bank utilizing the services of another bank for the purpose of giving effect to the instructions of the applicant does so for the account and at the risk of:• The applicant• The instructing bank• The instructed bank• The issuing bank56SLIDE #

04. A bank utilizing the services of another bank for the purpose of giving effect to the instructions of the applicant does so for the account and at the risk of:• The applicant• The instructing bank• The instructed bank• The issuing bank57SLIDE #

5. Intently True / False statement from the following • Question: An issuing bank or advising bank assumes no liability or responsibility should the instructions it transmits to another bank not be carried out, even if it has taken the initiative in the choice of that other bank. True or False?• Question: A bank instructing another bank to perform services is liable for any commissions, fees, costs or expenses ("charges") incurred by that bank in connection with its instructions. True or False?• Question: If a credit states that charges are for the account of the beneficiary and charges cannot be collected or deducted from proceeds, the issuing bank remains liable for payment of charges. True or False?• Question: A credit or amendment should not stipulate that the advising to a beneficiary is conditional upon the receipt by the advising bank or second advising bank of its charges. True or False?SLIDE #58

5. Intently True / False statement from the following • Question: An issuing bank or advising bank assumes no liability or responsibility should the instructions it transmits to another bank not be carried out, even if it has taken the initiative in the choice of that other bank. True or False?• Question: A bank instructing another bank to perform services is liable for any commissions, fees, costs or expenses ("charges") incurred by that bank in connection with its instructions. True or False?• Question: If a credit states that charges are for the account of the beneficiary and charges cannot be collected or deducted from proceeds, the issuing bank remains liable for payment of charges. True or False?• Question: A credit or amendment should not stipulate that the advising to a beneficiary is conditional upon the receipt by the advising bank or second advising bank of its charges. True or False?SLIDE #59

06. If a Credit states that charges are for the account of beneficiary and charges cannot be collected or deducted from proceeds, the ------------- remains liable for payment of chargesA. Issuing bankB. ApplicantC. BeneficiaryD. Nominated bank60SLIDE #

06. If a Credit states that charges are for the account of beneficiary and charges cannot be collected or deducted from proceeds, the ------------- remains liable for payment of chargesA. Issuing bankB. ApplicantC. BeneficiaryD. Nominated bank61SLIDE #

Article 38 : Transferable Credits

1. A transferable credit is available with Any Bank by Negotiation? Who is authorized to transfer the LC?A. Issuing BankB. Advising BankC. Any BankD. Bank specifically authorized in the LC63SLIDE #

1. A transferable credit is available with Any Bank by Negotiation? Who is authorized to transfer the LC?A. Issuing BankB. Advising BankC. Any BankD. Bank specifically authorized in the LC*****• In a freely available L/C, only a bank specifically designated in the L/C or issuing bank can transfer64SLIDE #

02. ABC Bank has received documents from its customer under a transferred letter of credit. The customer instructs ABC Bank to send documents directly to the issuing bank bypassing the transferring bank. Can ABC Bank send documents directly to the issuing bank?65SLIDE #

02. ABC Bank has received documents from its customer under a transferred letter of credit. The customer instructs ABC Bank to send documents directly to the issuing bank bypassing the transferring bank. Can ABC Bank send documents directly to the issuing bank?• No, unless expressly agreed to by the transferring bank second beneficiary’s documents must be sent to the transferring bank only66SLIDE #

03. Documents presented by the Second Beneficiary are Credit Compliant. The invoice substituted by First Beneficiary is discrepant. What is the course of action for the Transferring Bank?A. Forward discrepant documents to issuing bank.B. Request first beneficiary to rectify documents. If first beneficiary doesn’t rectify on first demand, send second beneficiary’s documents to issuing bank.C. Request first beneficiary to rectify documents. If first beneficiary doesn’t rectify till latest presentation date, send second beneficiary’s documents to issuing bank.67SLIDE #

03. Documents presented by the Second Beneficiary are Credit Compliant. The invoice substituted by First Beneficiary is discrepant. What is the course of action for the Transferring Bank?A. Forward discrepant documents to issuing bank.B. Request first beneficiary to rectify documents. If first beneficiary doesn’t rectify on first demand, send second beneficiary’s documents to issuing bank.C. Request first beneficiary to rectify documents. If first beneficiary doesn’t rectify till latest presentation date, send second beneficiary’s documents to issuing bank.68SLIDE #

04. A transferring bank confirms the master LC. Will the confirmation hold goods for the transferred credit?69SLIDE #

04. A transferring bank confirms the master LC. Will the confirmation hold goods for the transferred credit?• Yes, confirmation added to the master L/C will also hold good for the transferred L/C70SLIDE #

05. An irrevocable transferable L/C with following details is issued available with advising bank LC amount – USD 90,000 Quantity – Grade A 400 Pcs @ USD 100, Grade B 500 Pcs@ USD 100 Original L/C requires Insurance Policy for 110 % of invoice value First beneficiary requested the advising bank to issue two partial transfers as follows:• Transfer I – Grade A 400 Pcs @ USD 50• Transfer II – Grade B 500 Pcs @ USD 70Which is the percentage of insurance cover will you mention in each transfer? Transfer I Transfer IIA. 110% 110 %B. 110% 125%C. 220% 157.14%D. 220% 220%71SLIDE #

05. An irrevocable transferable L/C with following details is issued available with advising bank LC amount – USD 90,000 Quantity – Grade A 400 Pcs @ USD 100, Grade B 500 Pcs@ USD 100 Original L/C requires Insurance Policy for 110 % of invoice value First beneficiary requested the advising bank to issue two partial transfers as follows:• Transfer I – Grade A 400 Pcs @ USD 50• Transfer II – Grade B 500 Pcs @ USD 70Which is the percentage of insurance cover will you mention in each transfer? Transfer I Transfer IIA. 110% 110 %B. 110% 125%C. 220% 157.14%D. 220% 220%72SLIDE #

06. Which of the following is TRUE about transferable credits?A. The applicant faces lesser risk of loss or error than a non-transferable creditB. It provides for the second beneficiary to obtain payment against complying presentationC. It allows the second beneficiary to claim payment directly from the issuing bankD. It allows the actual supplier to provide the intermediary trader with the security of a credit73SLIDE #

06. Which of the following is TRUE about transferable credits?A. The applicant faces lesser risk of loss or error than a non-transferable creditB. It provides for the second beneficiary to obtain payment against complying presentationC. It allows the second beneficiary to claim payment directly from the issuing bankD. It allows the actual supplier to provide the intermediary trader with the security of a credit74SLIDE #

07. Which of the following terms cannot be changed on a transferred credit?A. Required documentsB. Presentation periodC. Amount of the creditD. Percentage of insurance cover75SLIDE #

07. Which of the following terms cannot be changed on a transferred credit?A. Required documentsB. Presentation periodC. Amount of the creditD. Percentage of insurance cover76SLIDE #

08. Which of the following is TRUE with regard to a transferable credit?A. A freely available credit can be transferred by any bankB. If partial shipments are allowed, a credit can be transferred from a second beneficiary to a third beneficiaryC. All terms in the transferred letter of credit must be identical to the master creditD. A specific nominated bank is authorized to transfer the credit77SLIDE #

08. Which of the following is TRUE with regard to a transferable credit?A. A freely available credit can be transferred by any bankB. If partial shipments are allowed, a credit can be transferred from a second beneficiary to a third beneficiaryC. All terms in the transferred letter of credit must be identical to the master creditD. A specific nominated bank is authorized to transfer the credit78SLIDE #

09. Consider the following situations when presentations are made to the transferring bank as below:I. Draft and invoice substituted by the first beneficiary are compliant, but bill of lading presented by the second beneficiary is discrepantII. Documents presented by the second beneficiary are compliant, but invoice substituted by the first beneficiary is discrepantWhich of the following statements is TRUE?A. In situation I, only first beneficiary gets paidB. In situation I and II, the first beneficiary does not get paid while the second beneficiary gets paid in situation II onlyC. In both situations, nobody gets paidD. In situation I, second beneficiary gets paid but first beneficiary does not get paid79SLIDE #

09. Consider the following situations when presentations are made to the transferring bank as below:I. Draft and invoice substituted by the first beneficiary are compliant, but bill of lading presented by the second beneficiary is discrepantII. Documents presented by the second beneficiary are compliant, but invoice substituted by the first beneficiary is discrepantWhich of the following statements is TRUE?A. In situation I, only first beneficiary gets paidB. In situation I and II, the first beneficiary does not get paid while the second beneficiary gets paid in situation II onlyC. In both situations, nobody gets paidD. In situation I, second beneficiary gets paid but first beneficiary does not get paid80SLIDE #

10. When a bank confirms an irrevocable transferable documentary credit, it assumes the credit risk of _______?A. The applicantB. The issuing bankC. The first beneficiaryD. The second beneficiary81SLIDE #

10. When a bank confirms an irrevocable transferable documentary credit, it assumes the credit risk of _______?A. The applicantB. The issuing bankC. The first beneficiaryD. The second beneficiary82SLIDE #

11. In a transferable letter of credit, which is the item which could be increased at the time of transferring the letter of creditA. AmountB. Unit PriceC. QuantityD. Percentage of insurance cover83SLIDE #

11. In a transferable letter of credit, which is the item which could be increased at the time of transferring the letter of creditA. AmountB. Unit PriceC. QuantityD. Percentage of insurance cover84SLIDE #

Article 39 : Assignment of Proceeds

1. Any assignment of proceeds by the beneficiary must be in accordance withA. Applicable law?B. UCP?C. ISBP?86SLIDE #

1. Any assignment of proceeds by the beneficiary must be in accordance withA. Applicable law?B. UCP?C. ISBP?Applicable Law87SLIDE #

02. Which of the following statements is TRUE?A. A beneficiary can assign proceeds only when the credit is transferableB. The assignee has the right to present documents under the creditC. The rights of the beneficiary to assign proceeds is governed by the applicable lawD. The beneficiary can assign proceeds only if it is specifically allowed in the credit88SLIDE #

02. Which of the following statements is TRUE?A. A beneficiary can assign proceeds only when the credit is transferableB. The assignee has the right to present documents under the creditC. The rights of the beneficiary to assign proceeds is governed by the applicable lawD. The beneficiary can assign proceeds only if it is specifically allowed in the credit89SLIDE #

03. Which statement is CORRECT with respect to assignment of proceeds under a letter of credit subject to UCP 600?A. The assignee must present credit complying documents to receive paymentB. The beneficiary has assigned the stated amount of proceeds to the assigneeC. The assignee will receive payment of the proceeds directly from the applicantD. The value of the documentary credit is reduced by the amount of the assignment90SLIDE #

03. Which statement is CORRECT with respect to assignment of proceeds under a letter of credit subject to UCP 600?A. The assignee must present credit complying documents to receive paymentB. The beneficiary has assigned the stated amount of proceeds to the assigneeC. The assignee will receive payment of the proceeds directly from the applicantD. The value of the documentary credit is reduced by the amount of the assignment91SLIDE #

04. Under a LC issued by Bank I in favour of your client Bee Ltd, your bank has agreed to assign proceeds under the LC to the extent of US$ 50,000 to Tee Ltd, Hongkong. Your bank received US$ 45,000 against a drawing from Bank I. Which of the following is your BEST course of action?A. Pay US$ 50,000 to Tee Ltd by debiting US$ 5,000 (being the difference) from Bee LtdB. Pay US$ 45,000 to Tee LtdC. Cancel your assignment of the proceeds letter to Tee LtdD. Pay US$ 50,000 to Tee Ltd even if you cannot recover US$ 5,000 from Bee Ltd92SLIDE #

04. Under a LC issued by Bank I in favour of your client Bee Ltd, your bank has agreed to assign proceeds under the LC to the extent of US$ 50,000 to Tee Ltd, Hongkong. Your bank received US$ 45,000 against a drawing from Bank I. Which of the following is your BEST course of action?A. Pay US$ 50,000 to Tee Ltd by debiting US$ 5,000 (being the difference) from Bee LtdB. Pay US$ 45,000 to Tee LtdC. Cancel your assignment of the proceeds letter to Tee LtdD. Pay US$ 50,000 to Tee Ltd even if you cannot recover US$ 5,000 from Bee Ltd93SLIDE #

05. Which of the following statements is TRUE regarding assignment of proceeds? A. A beneficiary cannot assign proceeds of a documentary credit which states “Non Transferable”B. A beneficiary can assign proceeds under a back – to – back creditC. Once the assignment is acknowledged by the nominated bank, the assignee is authorized to present documents under the LCD. Once the assignment is acknowledged by the nominated bank, the assignee is assured of payment under the LC94SLIDE #

05. Which of the following statements is TRUE regarding assignment of proceeds? A. A beneficiary cannot assign proceeds of a documentary credit which states “Non Transferable”B. A beneficiary can assign proceeds under a back – to – back creditC. Once the assignment is acknowledged by the nominated bank, the assignee is authorized to present documents under the LCD. Once the assignment is acknowledged by the nominated bank, the assignee is assured of payment under the LC95SLIDE #

06. Which of the following statements is correct when an assignment of proceeds has been effected under a documentary credit issued in accordance with UCP 600?A. The assignee must present complying documents to receive payment.B. The assignee will receive payment of the proceeds directly from the applicant.C. The value of the documentary credit is reduced by the amount of the assignment.D. The beneficiary has assigned its rights to the stated amount of proceeds to the assignee.96SLIDE #

06. Which of the following statements is correct when an assignment of proceeds has been effected under a documentary credit issued in accordance with UCP 600?A. The assignee must present complying documents to receive payment.B. The assignee will receive payment of the proceeds directly from the applicant.C. The value of the documentary credit is reduced by the amount of the assignment.D. The beneficiary has assigned its rights to the stated amount of proceeds to the assignee.97SLIDE #