国际结算复习资料

I. True or false

1. Without bank’s participation, modern int’l trade payment system would not exist any more T

2. The essence of both buyers and sellers concern is whether the counterpart fulfills the contract T 3. Int’l settlement and trade payment is a theory rather than a practice F 4. Int’l settlement can only be used in visible trade F

II. What do the following abbreviations stand for?

1. ICC 国际商会The International Chamber of Commerce 2. FDI Foreign Direct Investment外商直接投资 3. FX Foreign Exchange 外汇 4. FAS Free Alongside Ship 船边交货条件 5. FOB FREE ON BOARD 装运港船上交货条件 6. CIF COST, INSURANCE AND FREIGHT 成本加运保费交货条件 7. SWIFT The Society For Worldwide Inter-bank Telecommunications(环球银行间金融电讯协会) 8. CNY China Yuan 人民币 9. GBP Great Britain Sterling Pound 英镑 10. JPY Japanese yen 日元 11. HKD Hong Kong dollar 港币 12. AUD Australian Dollar,澳元 13. SGD 新加坡元Singapore dollar 14. NZD 新西兰元New Zealand dollar 15. CAD 加拿大元Canada Dollar

Financial

A. Term explanation

1. draft

a bill of exchange, esp. any bill before it has been accepted, or a bank bill, or a sight bill, or an inland bill. Any written order to pay money 2. acceptance

act of accepting responsibility for paying the value of a bill) 3. guarantee

a 3rd party to a draft, the guarantor, who promises to pay the draft when presented if it’s a sight draft or to accept when presented and to pay when it is due if it’s a time draft When it is dishonored by non-payment or non-acceptance, the guarantor becomes reliable for the draft 4. protest

a formal declaration in writing made by a notary public, witnessing & recording the dishonor of a draft or promissory note

5. right of recourse

the right of the payee or holder of a draft that is dishonored at its maturity to demand payment from the other parties, such as the drawer or an endorser, unless these parties have written the words without recourse or sans recours against their signatures. 6. presentment

a sight draft has to be presented duly for payment;a time draft, has to do so duly for acceptance 1st and to be presented again for payment at maturity 7. payment

performed when a draft is paid 8. notice of dishonor

a written information given to the drawer & each endorser on the next business day after the dishonor of the draft. 9. issue

1) to draw and sign a draft; 2) to deliver it to the payee, based on the Bills of Exchange Act After the 2 steps, the draft is irrevocable under the drawer’s firm promise for the drawee is to accept and pay for it. 10. endorsement

an act of negotiation. A payee or the holder of a draft should endorse it 1st if he transfers or passes its title to others; Still, the holder must do so on the back of it before he sells it to the buyer if he sells or discounts it. 11. guarantor

person who guarantees the acceptance and the payment of an instrument 12. dishonor

a failure or refusal to accept a time draft or pay a sight draft when it’s presented.

B. Based on the draft given below, please fill in the blanks with relative numbers in brackets and some other terms:

Exchange for GBP 1,250.00 (1) Beijing, 1 April, 200x At 90 d/s after sight (2) pay to the order of DEF C0. (3)

the sum of Pounds one thousand two hundred and fifty only To XYZ Bank London (4) For ABC Co., Beijing (5) (Signature) The draft is an unconditional order in writing addressed by (5__) to (_4_) signed by (_5_) giving it requiring (_4_) to whom it is addressed to pay (_2_) the sum of (_1_) to (_3_). The holder of the draft is (_3_) who must firstly present it to (_4_) for _acceptance__. At maturity, the holder must present it for _payment__ .

D. Fill in the following blank form to draw a draft with the information given below:

Date: 31 Aug., 2005; Amount: USD8,690.64;

Tenor: at 30 d/s after sight Drawer: Peter Hardley, London; Payee: John Smith or bearer

Drawee: Northern Bank Ltd, London;

Exchange for USD_ 8,690.64_ London, 31 Aug, 2005 At 30 d/s after sight, pay this 1st draft (2nd of same tenor

& date unpaid) to the order of __ John Smith _______or bearer, the

Sum of US Dollars ____ Eight thousand six hundred ninety ___________ and 64/100 only.

Drawn to Northern Bank Ltd, London Peter Hardley, London (Signature)

E. Multiple choices

1. If a draft is termed like __, its exact time for payment is to be fixed by the payer after his acceptance. B

A. at sight B. at x x d/s after sight

C. at x x d/s after date D. at x x d/s after shipment

2. In the following drafts, it is not negotiable if marked with A__. A. Pay to Johnson Co. Ltd only

B. Pay to bearer

C. Pay to ABC Co. & its order

D. Pay to the order of Johnson Co. Ltd

3. On the face of a draft, _D_ is to be added to the end of the sum in words to prevent from being altered

A. OK B. end C. enough D. only

If a contract for the amount of GBP720,000 was approved for buyer’s credit up to 85% of the said amount by Bank of Oslo, Norway to BOC, Beijing. After the

payment, BOC would issue a Promissory note on 1st July, 2005 specifying that it is payable at 3 yrs after the above stated date to the order of BOO the sum of 85% of GBP720,000. Please write a promissory note by filling in the blanks of the following form:

Promissory Note

Issued in _ Beijing ___ the _1st July __ , 2005. On _1st July __, 2008 fixed, we promise to pay against this promissory note to

the order of _ BOO____, Norway the sum of GBP_612，000____ (say Pounds six hundred and twelve thousand only),

payable only in___ Oslo, Norway ____. For and on behalf_BOC, , Beijing ___ (Signature)

Fill in the following blanks with the numbers in brackets:

Check for USD3,00.00 (1) Shanghai, May 5, 200x Pay to the order of John Smith (2) the sum of three thousand US dollars. (3)

To: Bank of China, Shanghai, China (4) For China ABC Co., Shanghai (5) (signature)

The above check is addressed by _5_, the customer to _4__, the bank, authorizing that bank to pay on demand the sum of 1 or 3 _ to _2__. II. True or false?

1. Check can be considered as the demand draft drawn on a bank T 2. The writer of a check is not allowed to write a check with his signature which doesn’t comply with his signature left to a bank in advance. T 3. After the acceptance of a time draft, the acceptor becomes the payer as the primary debtor T 4. Traveler’s check is one of the checks. F

Fill in blanks with proper words

T/T M/T D/D A form of sending a form of payment a form of demand draft cable or telex or order or mail advice SWIFT

2. Examined by test key examined by signature examined by signature

3. A safe method not so safe as T/T not so safe as T/T

4. With _highest__ cost with lower_ cost with lower_ cost

5. The fastest and not so often used a useful method of most popular due to its slower_speed remittance & pay able

method of remittance by a bank rather than the paying bank

Fill in blanks with proper terms:

1. 4 parties to a remittance are remitter,remitting bank,paying bank & payee 2. Remittance through a bank from one country to another may usu. be made by one of the following methods:M/T, T/T and D/D. True or false

1. D/D stands for demand draft T 2. Among T/T, M/T & D/D, T/T is the cheapest method of payment F 3. SWIFT is the speediest form of payment T 4. SWIFT stands for Society for Worldwide Inter-bank Financial Telecommunications T Multiple choice

1. SWIFT is _______B____________________. A. in the U.S.A.

B. a kind of communications belonging to T/T system for inter-bank’s fund transfer C. an institution of the UN; D. a government organization

2. Mail transfers are sent to the correspondent bank C_, unless otherwise instructed by clients.

A. by courier service B. by ordinary mail C. by airmail D. by sea-mail

3. The various methods of settlement all involve the same book keeping, only different at the A . A. method by which the overseas bank is advised about the transfer B. method by which the beneficiary is advised about the transfer C. the speed D. the beneficiary

4. A D payment doesn’t take as long as an M/T payment A. SWIFT B. T/T C. D/D D. A or B

Term explanation

1. M/T

funds are transferred against a payment order or a mail advice, or sometimes a debt advice issued by a remitting bank, at the request of the remitter. 2. T/T

a quick way of sending money by cabled bank transfer to a person in another country. The payee can be paid either in cash or by credit to his bank a/c. Test key is used to verify its authenticity (whether the cable is true or not). 3. D/D

a negotiable instrument drawn by a bank on its overseas branch or its correspondent abroad, instructing the latter to pay on demand the stated amount to the holder. 4. reverse remittance

different directions for the way of funds & settlement instruments to be transferred.The movement of draft & proceeds in different direction, with payment asked for by the payee as the exporter initiatively Fill in blanks with proper words or letters:

a. The abbreviation for Delivery of documents against payment is D/P. b. The abbreviation for Delivery of documents against acceptance is D/A. c. Collection means the handling by banks of documents in accordance with instructions received in order to 1) obtain payment &/or acceptance or 2) deliver documents against payment &/or against acceptance.

d. Financial documents means bills of exchange, promissory notes, checks. Commercial documents mean invoices, transport documents, documents of title or other similar documents.

e. Parties in a collection incl. drawer (or seller), remitting bank, collecting bank (or presenting bank), and drawee (or buyer).

True or false?

1. If the instructions are D/P, the importer’s bank will release the documents to the importer only against payment. T 2. The principal is usu. the importer. F 3. Promissory notes are commercial documents. F 4. Banks have no liability for any delay or loss caused by postal or telex failure. T 5. In the case of documents payable at sight the presenting bank must make presentation for payment without delay. T 6. Goods should not be dispatched direct to the address of a bank or consigned to a bank wi- thout prior agreement on the part of that bank. T

Term explanation

1) collection

obtaining payment of a debt, e.g. a bill of exchange (draft), check, etc. through banks from the debtor 2) clean collection

a means of collection settlement in which the seller asks his bank to collect his proceeds from the buyer by presenting the bank a clean draft without shipping documents attached. It’s contrary to documentary collection, it’s not accompanied by commercial invoices, such as invoice B/L, etc.

3) documentary collection

collection on financial instruments with commercial documents or collection on commercial documents without financial instruments, i.e. the collection of a sum due from a buyer by a bank against delivery of certain documents, say, a draft. 4) D/P

a means of getting payment for export shipments, by which the exporter or his agent sends the shipping documents to a bank at the port of destination with an order to hand the documents to the buyer or his agent only when the draft has been paid 5) D/A

a means of settlement for the importer to get the documents he needs in order to get possession of the goods after he accepts the draft presented by bank Multiple choice

1. parties to a collection involve A A. drawer, remitting bank, collecting bank, drawee B. drawer, drawee, holder, endorser, C. drawer, endorser, endorsee, payer

D. holder in due course, drawer, guarantor, payer

2. Ownership of the goods belongs to D before the importer pays or accepts the documentary collection

A. payer B. collecting bank, C. shipping company D. drawer

3. Under collection, the payer for the draft should be B A. exporter B. importer C. remitting bank D. collecting bank

4. Settlement for collection is based on trade credit because C . A. no banks participate B. commercial draft is drawn

C. banks have no obligation to ensure payment

5. If drawee refuses to pay when collecting bank presents him the documents, the bank is to C A. ask the payer to explain why B. write “dishonored” on the draft C. Inform the drawer of the dishonor at once D. try to protest the draft

6. The major difference between D/P & D/A lies at that B C .

A. D/P belongs to documentary collection, while D/A belongs to clean collection

B.under D/P,documents are delivered after pay-ment, while under D/A, after acceptance

C.under D/P, payment is made at sight, while under D/A, after sight

D. under D/P, payment is made after sight, while under D/A, made at sight Briefly answer the following question:

a. What is the difference between D/P & D/A? Delivery at different time: D/P: exporter’s documents are delivered after importer’s payment D/A: exporter’s documents are delivered after importer’s acceptance Payment at different time: D/P: importer has to pay at sight (sight draft); D/A: importer may pay after sight ( time one) Seller with different risk D/P: the exporter suffers low risk D/A: the seller possible to loss both goods and proceeds

b. What’s collection based on as a form of settlement? Commercial credit and trade credit

c. What int’l rules should be observed for the business of collection at present?

The uniform rules for collections（URC522）、The uniform rules for collections is the internationally recognized codification of rules unifying banking practice regarding collection operations for drafts and for documentary collections

d. What is the nature of D/A, and that of D/P?

D/P:not only importer can get goods,but also exporter can get payment in time D/A: importer may pay after sight,favorable for importer to get the B/L in time,unfavorable for exporter. Both belong to documentory collection.

e.How many basic parties concerned are there in collection and who are they? Four、 drawer、 remitting bank、 collecting bank、 drawee

f. How many ways are there in collection & what are they?

Three、D/P 、 D/A、 acceptance documents against payment

Fill in blanks with proper words

a. Under an irrevocable L/C, the issuing bank must bear the 1st reliability for payment. b. An irrevocable credit can neither be cancelled normodified without the agreement of the issuing bank, the confirming bank (if any) & thebeneficiary c. If a credit is issued by BOC, Guangzhou & confirmed by BOC, New York, the payment is ensured by both banks.

d. A confirmed credit is favorable to exporter, but not favorable to importer. e. if an L/C is attached with no transport documents & allows payment to be made only against a draft, it’s a clean credit. f. Because it’s too risky on the side of exporter, revocable credit is hardly used in international trade.

Who are

A. paying bank B. issuing bank C. reimbursement bank, D. confirming bank E. beneficiary F. advising bank G. negotiating bank H. applicant respectively? (Match work)

1. whose obligation is to arrange for an L/C to be opened or issued in favor of the exporter H 2. referred to sb. who can benefit from the L/C by its assurance of payment to him & this payment term is usu. incorporated in the S/C at the request of the exporter. E 3. the bank that issued the documentary credit on behalf of the applicant B 4. the bank that has the task of informing the beneficiary that credit has been issued in his favor so that the beneficiary may make necessary preparation for shipping the goods & drafting the documents stipulated in the credit. F 5. The bank that is authorized to pay the beneficiary or accept or negotiate his drafts, against his presentation of proper documents. A 6. The bank that buys an exporter’s draft submitted to it under a documentary credit G 7. The bank that is requested to add its own commitment ( make payment to the beneficiary) to the documentary credit. D

8. The bank that, at the request of the issuing bank, is to authorized to pay, or accept and pay time drafts under the L/C C

What do the following abbreviations stand for?

1. UCP

Uniform Customs and Practice 2. L/C

Letter of credit 3. B/L bill of lading 4.N/N

non-negotiable 5. A/C

account 6. H/O

HEAD OFFICE

Multiple choice

1. A is the 1stly reliable payer under an L/C. A. issuing bank B. negotiating bank

C. applicant D. advising bank

2. The most important thing for a beneficiary of an L/C to examine the L/C is to make sure C .

A. the L/C’s authenticity B. the issuing bank’s authenticity;

C. if the terms & conditions of the L/C comply with those in the S/C; D. the political background of the issuing bank

3. “strict consistency” in L/C business refers to the consistency between C_. A. L/C & S/C B. L/C & goods concerned

C. documents & L/C D. documents & goods concerned

4. According to UCP500, an L/C is B L/C if it’s not marked “irrevocable” or “revocable.

A. revocable B. irrevocable C. either revocable or irrevocable D. none of A, B & C

Questions

1. ABC Co., an exporter, who ships the goods & delivers the documents concerned to its negotiating bank under an L/C, but the importer, EFG Co. is bankrupt suddenly & unable to make the payment. If so, can the exporter gets the proceeds? Why or why not?

Yes, because issuing bank is the 1stly reliable payer under an L/C, if the documents presented by the seller are in compliance with the terms & conditions of the L/C, the issuing bank is to pay the seller, even the applicant is bankrupt or in default.

2. If L/C specifies the date for shipment as “on/or about 15th May” & the beneficiary presents the B/L dated “ May 20”, can the negotiating bank negotiate the document? Why or why not?

Yes，According to the UCP 600, if the expression “ on or about ” or similar expressions are used, banks will interpret them as a stipulation that shipment is to be made during the period from five days before to five days after the specified date, both end days included.

Fill in blanks with proper words:

A. A credit can be transferable once only

B. Bank charges when a credit is transferable are payable by the first beneficiary

C. The benefit of an irrevocable documentary L/C may be available to a 3rd party if the 1st beneficiary uses it as security to obtain another documentary L/C in favor of the actual supplier

D. The 1st beneficiary is the Middleman of the back-to-back L/C & the 2nd beneficiary is the actual supplier

E. Red clause credits belong to partial sum to be paid in advance credits

F. There are 2 kinds of revolving credits, one may revolve in relation to time, another may revolve in relation to amount

G. 3 modes of restoration to the original credit amount:

a. if automatically restored to the original amount when it is exhausted. It’s automatic restoration to revolve;

b. if restored to the original amount only on receipt of issuing bank’s notice, it’s non-automatic restoration to revolve;

c. if the negotiating bank is mot informed of stopping restoration to the original amount at the beginning of the next period, it’s Semi-automatic restoration to revolve.

H. Difference between assignment & transfer in a transferable L/C:

The beneficiary has the right to assign any proceeds within his share to a 3rd party; The beneficiary transfers his right to perform under the credit to a third party

A. Pls issue an assignment of proceeds instruction based on the following details:

Issuing bank: Mellon Bank NA, New York (1) Negotiating bank: ICBC, Guangzhou Branch (2) Beneficiary: Dafeng Trading Co., Guangzhou (3) Assignee: Bailee Development Co., Shenzhen (4) Credit No.34967 (5) for USD24000.00 to expire on or before 31, May, 200x (6)

Assignment of Proceeds Instruction To: _(2 )_ We hereby issue an irrevocable assignment of proceeds instruction to you to accept our instru-ction of assignment to assign 90% of the credit proceeds being USD _(21600 )__ to

which we might be or become entitled under credit No _(5 )__ of _( 1 )__, New York to assignee _( 4 )_. The credit is available by negotiation with ICBC, Guangzhou and does not allow partial shipments. This instruction will expire _( 6 )_. For ___( 3 )__ (Signature)

B. Issue a standby L/C with following data:

beneficiary: (1) Bank of Asia, Guangzhou

Issuing bank: (2) Sanwa Bank Ltd, Shenzhen Credit No.: (3) 6251470 Applicant: (4) ABC Co.

Total amount of : (5) USD3.2 mil.

(6) Signed statement in duplicate issued by you certifying that the amount drawn hereunder represents & covers the unpaid balance of debt due to yourselves by “ABC Co.” under “agreement”

(7) We engage with drawers that such drafts drawn under & in incompliance with the terms of this credit shall be duly honored on due presentation to us for payment on or before 30 Dec., 200x

A Standby L/C by Sanwa Bank Ltd, Guangzhou Issuing date: 18 Jan., 200x To: Beneficiary: _( 1 )_ From: Issuing bank: _( 2)_ Standby L/C No. ( 3 )

with reference to the Loan Agreement dated & signed on 18 Jan., 200x by ABC Co. & Bank of Asia, Shen-zhen, we hereby open our irrevocable standby L/C No. _(3 )__ in your favor for a/c of _(4 )_, a sum or sums not over a total amount of _( 5)_, available by your draft drawn on ourselves at sight for 100% of statement value to be accompanied by the following documents: _(6)_. All drafts drawn hereunder must be marked the words “Drawn under the Sanwa Bank Ltd., Shenzhen, Standby L/C No.6251470 dated on 18 Jan., 200x”.in this credit is available as from 18 Jan., 200x. This credit _( 7)_ and this standby L/C is subject to ISP 98. The Sanwa Bank Ltd, Shenzhen

(signature)2

C. Issue a reciprocal credit with following data

Issuing bank: (1) the Fuji Bank Ltd, Tokyo Beneficiary: (2) ABC Co., Guangzhou Advising bank: (3) Bank of Asia, Guangzhou Credit amount for JPY25 mil. To be converted at USD/JPY 100 into (4) USD 0.25 mil. Applicant: (5) Nashi Trading Co. Ltd., Tokyo Draft drawn on (6) us at sight.

This is a (7) reciprocal L/C against Bank of Asia, Gua- ngzhou, Credit No. 12009 favoring Nashi Trading Co., Ltd., Tokyo, covering shipment of 10000 sets of MP5. Signing Bank: (8) the Fuji Bank Ltd., Tokyo Reciprocal Credit Form ( 1 )______ Tokyo, 20 May, 200x Credit No. 118-10063 Advised through ( 3 )

To: (2 ) Dear Sirs

We hereby issue an irrevocable documentary credit No.118-10063 for USD ( 4 ) in your favor for a/c of ( 4 ), Tokyo, available with advising bank by negotiation of your draft drawn on (5 ) at sight for 100% of invoice value accompanied by the following documents: xxx This is a (7)

For ( 8 ) (signature)

Choose the best answer

A. “This credit shall be renewable automatically twice for a period of 1 month each for an amount of USD 50000 for each period making a total of USD 150000”

If a credit has such a statement, it must be (a). automatic (b). non-automatic (c). Semi-automatic restriction to revolve

B. “Should the negotiating bank not be advised of stopping renewal within a week, the unused balance of this credit shall be increased to the original amount at beginning of the next week after each negotiation”.

If a credit has such a statement, it must be (a). automatic (b). non-automatic ( c). semi-automatic restoration to revolve Choose the better answer

a. Whether B/L is provided with the following functions or characteristics: 1) It’s a receipt of goods A. yes B. no 2) It’s a contract of carriage A. yes B. no 3) It’s a document of title A. yes B. no 4) It’s a negotiable document A. yes B. no

5) It may control the delivery of the goods A. yes B. no

b. A B/L has 2 basic parties, viz. carrier and

A. consignor B consigee

c. Consignor is also called shipper. Generally, the shipper is the seller or the

A. consignee B. beneficiary under commercial L/C. In special case, the shipper may be the buyer sometimes

d. Whether non-negotiable sea waybill is provided with the following function or characteristics

1). It’s a receipt of goods A. yes B. no

2). It’s a contract of carriage A. yes B. no 3) It’s a document of title A. yes B. no 4) It’s a negotiable document A. yes B. no 5) It may control the delivery of the goods A. yes B. no

e. Whether charter party B/L is provided with the following functions or characteristics 1) It’s a receipt of goods A. yes B. no 2) It’s a contract of carriage

A. yes B. it’s subject to charter party agreement 3) It’s a negotiable document

A. yes B. it’s subject to charter party agreement 4) It’s a document of title

A. yes B. it’s subject to charter party agreement 5) It may control the delivery of the goods

A. Yes B. it’s subject tot charter party agreement

6) Even if the credit requires presentation of a charter party contract, bank

A. will B. won’t examine such contract, but will pass it along without responsibility

1) A commercial invoice is the accounting document by which the seller claims payment from the A. shipper B. buyer for the value of the goods &/or services being

supplied

2) Unless otherwise specified in the L/C, commercial invoice A. need B. needn’t be signed 3) If an L/C calls for shipment of FOB Shanghai, then when a commercial invoice under this doesn’t specifically state “FOB Shanghai”

A. it’s a discrepancy B. it’s not a discrepancy

g. As for marine B/L and mail B/L, ___.

A. both are title to goods

B. both are negotiable title to goods

C. the former is the negotiable title to goods, but the latter isn’t

terms explanation:

a . insurance policy

a legal evidence of the agreement to insure, also a written contract between the insurance co. & the party insured. b. packing list

an important document for the customs & the importers to check goods. It details the packing of goods item by item such as assortment, weight, etc. The contents must be consistent with those on the commercial invoice. c. marine B/L

the most important transport document as the document of title as well as its wide usage in int’l settlement. Of the seaway B/L, banks only accept On Board B/L, Clean B/L. If L/C doesn’t forbid, banks also accept partial shipment & transhippment B/L, Charter Party B/L, etc. d. certificate of origin

a document evidencing the goods originated from a particular country, issued by the Inspection Bureau, or by the Council for Promotion of Int’l Trade, or by the exporter himself sometimes.

Choose a better answer

a. Whether CTD or Multimodal Transport Document provided part of the journey by sea has the following functions or characteristics? 1) it’s a receipt of goods a. yes b. no

2) it’s a contract of carriage a. yes b. no 3) it’s a document of titlea. yes b. no 4) It’s a negotiable document a. yes b. no 5) It may control the delivery of the goods a. yes b. no

B. Whether a parcel post receipt is provided with the following functions or characteristics? 1). It’s a receipt of goods a. yes b. no

2) it’s a contract of carriage a. yes b. no 3) it’s a document of title a. yes b. no 4) it’s a negotiable document a. yes b. no 5). It may control the delivery of the goods a. yes b. no

C. Whether a courier receipt provided with the following functions or characteristics? 1). It’s a receipt of goods a. yes b. no

2) it’s a contract of carriage a. yes b. no 3) it’s a document of title a. yes b. no

4) it’s a negotiable document a. yes b. no 5). It may control the delivery of the goods

a. yes b. no

D. 1) If the L/C ask for insurance policy, the presentation of an insurance certificate of it A.

is B. isn’t permissible.

2) Date of insurance document must be no later than the date of

A. shipment B. issuance of L/C

Briefly answer the following questions:

1. Is there anything in common for airway bill, railway bill, road transport document & postal receipt?

They are a receipt of goods and a contract of carriage. The functions of a them are similar to those of a bill of lading, except that they are not negotiable and they are not a document of title.

2. Where do the applicant for an L/C, issuing bank & beneficiary appear on a marine B/L respectively?P120

Fill in the blanks with proper words:

1. If the documents don’t meet the L/C requirement, the bank concerned can only act in one of the following ways:

a. return the document to the beneficiary for amendment b. the document is to be passed to theissuing bank for approval or rejection c. return the document to the beneficiary for him to represent document to the issuing bank for approval

d. pay, accept or negotiate “underreserve” to keep the right of recourse against the beneficiary if the issuing bank refuses to provide repayment

Choose a better answer

1. If an L/C issued by ABC Bank, London is available by negotiation with EDF Bank, Shenzhen against the documents & draft presented by the beneficiary, the drawee’s name in such a draft is ABC Bank DEF Bank

2. If a credit stipulates that shipment to be effected not latter than 20 June, 2006,

then A. 21, June, 2006 B. 19, June, 2006 as the shipment date on the B/L is considered as late shipment”

True or false

1. If an insurance policy to be presented is specified by an L/C, then a bank can not accept an insurance certificate to deal with negotiation. T 2. GSP origin of certificate (Form A) is designed as an origin of certificate for developing counties to enjoy the generalized system of preference by the UN. T

4. as a compensation & substitution of a trade credit, L/G is similar to & different from standby L/C;

True or false

1. Every bank loan is to satisfy the needs of woking capital of the firm F 2. An irrevocable guarantee can be cancelled or amended at any moment F 3. All L/Gs are irrevocable T 4. L/G must be non-transferable T 5. L/G is more widely applicable than L/C T 6. L/G with guarantor bank as the 1st payer is now the most prevailing one in the world T Multiple choices

1. One of the main function of a banker is to acceptD m his customers A. money b. cash C. advance D. deposit 2. Bank loans with ___ ＜ 1 year are called short term loan A. expiry date B. maturities C. time D. period

3. All guarantees should include the principal debtor, the __ and the guarantor A.beneficiary B.creditor C.Mortgagee D. lender

4. The bond should state that claims must be received ___ than the expiry date. A. a little earlier B. a little later

C. not earlier D. not later 5. ___ receives a L/G & has the right to claim for compensation from the guarantor bank A. applicant B. guarantor C. beneficiary D. advising bank

6. On an L/G, the effective time incl. __& ___ A. the date when the L/G becomes effective B. the latest day for presentation of documents C. the latest day for shipment D. the date when the L/G expires What is the difference & similarity between L/G & standby L/C?

Documents Required Standby L/C

Beneficiary: to ore- sent sight draft & the written eviden-ce proving the app- licant’s default L/G Draft: not a must, but beneficiary’s to present both documents to pro- ve his performance of the contract & the applicant’s default Basis for payment Standby L/C Issuing bank pays the beneficiary after examining documents to en- sure consistency L/G Under conditional L/G, guarantor bank pays only when all the conditions specified in the L/G are satisfied Rules to be observed Standby L/C

A globally accepted UCP L/G No globally accepted rule, but with reference to URCG

Choose the best answer

How many basic parties are there in a traveler’s check? A. 3 (drawer, drawee, payee) B. 2 (issuer, buyer) C. 4 (drawer, drawee, issuer & payer)

II. 2 holders use Visa Card to go shopping at the Friendship Store on April 1. 06, Zhang Dong held his Visa Card as follows:

and has been to the store to buy a digital camera for CNY 245 VISA CARD

Card No.5411 8001 0012 Valid date: Jan. 200x Expiry date: Dec. 200x

Card holder’s name: Zhang Dong Authorized signature: Zhang Dong Issued by HSBC, Hong Kong

and has been to the store to buy a digital camera for CNY 245

On April 3, 200x, Li Wei held his Visa card as follows: VISA CARD

Card No.: 5411 8001 0012 Valid date: Jan., 200x Expiry date Dec., 200x Card Holder’s name: Li Wei Authorized signature: Li Wei Issued by HSBC, Hong Kong

On April 3, 200x, Li Wei held his Visa card as follows: And has been to the store to buy a raincoat for CNY 180

1. Each one filled out a set of sales slips with his signature & handed them together with Visa Card to the salesman there who must check them & take the following steps:

A. Whether the credit card is written with the valid period? a. yes b. no

B. whether the signature on the sales slip agrees with that on the credit card? a. yes b. no C. Whether the card number is included in the list of cancelled number? a. yes b. no D. Is the sales slip amount ＞the floor limit as previously arranged?a. yes b. no

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