The word “clean” need not appear on a transport document, even if a credit has a requirement for that transport document to be “clean on board”.
22. The date of the insurance document must be no later than the date of shipment, unless it appears from the insurance document that the cover is effective from a date not later than the date of shipment.
23. The war risks both under CIC and ICC are can be covered independently.
24. Insurance against F.P.A. means that the insured cannot obtain compensation from the insurer if particular average occurs.
25. The insurance endorsement cannot be used as a dependent document. It is only a supplementary document attached to insurance policy or certificate.
26. Warsaw-Oxford Rules clearly explain the thirteen kinds of trade terms in current use. 27. According to INCOTERMS2000, FCA is suitable for all kinds of transportation.
28. The main difference between a CIF contract and a DES contract lies in the fact that the former is a symbolic delivery of goods, whereas the latter is a physical delivery of goods. 29. In general, soft currency should be chosen for exports and hard currency for imports.
30. The United Nations Convention on Contracts for the International Sale of Goods does not limit the forms of contracts.
31. The “receipt rule” insists that delaying or missing of an acceptance on the way constitutes an effective contract.
32. The conformity of goods with samples refers, according to the CISG, to the conformity of the quantity, quality, description and packing of goods with those of the sample.
33. When the goods do not conform to the sales contract, the bank may stop payment immediately even if the documents are correct and complete.
34. According to INCOTERMS 2000, FAS is suitable for all kinds of transportation.
35. Unless otherwise stated in the Credit, a transferable Credit can be transferred more than once. 36. After issued of the letter of credit, the Issuing Bank may refuse payment if the applicant becomes bankrupt.
37. According to the UCP500, a freely negotiable credit must stipulate a place for presentation of documents for negotiation.
38. When the goods are posted, the latest date of shipment refers to the date of Post Receipt. 39. If the Issuing Band appoints the Bank of China as its Advising Bank of L/C, then the Issuing Bank may ask the Bank of Asia to advise amendments to the L/C. 40. The instrument of payment used in M/T is cheque.
41. According to international trade practice, you cannot have the goods insured if you did not have insurable interest in the goods.
42. Under CIC, no additional risk can be purchased to insure goods independently.
43. The insurance endorsement cannot be used as a dependent document. It is only a supplementary document attached to insurance policy or certificate. 44. Institute Cargo Clause (A) has the widest coverage among all its clauses.
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45. When there are optional ports in the S/C, where the goods are to be unloaded must be decided and confirmed by the buyer at least 48 hours before the ship arrives at the first optional port. 46. A letter of indemnity is issued by the seller to the buyer to certify that the goods delivered are in good condition.
47. When the ship-owner speeds up his ship and arrives at the destination at an earlier date than is stipulated, he can obtain dispatch money from the shipper.
48. According to the interpretation of the Revised American Foreign Trade Definition, FAS is suitable for all kinds of transportation.
49. The Neutral packing means the packing without the name of the origin.
50. Price terms are mainly applied to determining the prices of commodities in international trade. 51. Warsaw-Oxford Rules clearly explain the thirteen kinds of trade terms in current use. 52. As an exporter, you concluded a deal with an American on basis of EXW; then your transaction risk is reduced the minimum degree.
53. According to the interpretation of the Revised American Foreign Trade Definition, FAS is suitable for all kinds of transportation.
54. On CIP terms, the seller must pay the freight rate and insurance premium as well as bear all the risks until the goods have arrived at the destination.
55. A letter of indemnity is issued by the seller to the buyer to certify that the goods delivered are in goods condition.
56. According to the UCP 500, a bill of lading which is issued subject to a Charter Party must be accepted unless the Credit stipulates otherwise.
57. When you transport your goods by a Time Charter, you have to pay for loading and unloading. 58. When the ship-owner speeds up his ship and arrives at the destination at an earlier date than is stipulated, he can obtain dispatch money from the shipper.
59. When the charterer fails to load or unload the goods within the stipulated period of time, he has to pay demurrage to the ship-owner.
60. Sometimes when the buyer cannot determine a specific port of discharge, he may require two or three ports to be written on the contract for option.
61. When there are optional ports in the contract, the goods may be unloaded at any one of the ports at the shipping company’s disposal.
62. When importing on FOB terms, we can generally stipulate the port of discharge. 14 An order bill of lading may be negotiable after being endorsed.
63. A bill of lading is a transport contract in which the shipping company promises to transport the goods received to the destination.
64. In China, insurance companies do not accept insurance based on Institute Cargo Clause. 65. Institute Cargo Clause (A) has the widest coverage among all its clauses. 66. Almost all the insurance companies provide door-to-door coverage service.
67. Insurance against F.P.A. means that the insured cannot obtain compensation from the insurer if particular average occurs.
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68. If you have insured your goods against All Risks, you will get compensated whatever risks occurs to your goods.
69. The quantity terms of goods is one the conditions of an effective sales contract.
70. In international trade, only the Metric System is allowed to indicate the quantity of goods. 71. If the parties to a sales contract do not in advance agree upon whether the quantity of goods is determined by gross weight or net weight, it will be determined by gross weight. 72. Net weight refers to the actual tare of all the packing materials.
73. Conditioned weight is, in fact, the actual weight of the moisture of a certain commodity. 74. The quantity terms of goods is one the conditions of an effective sales contract.
75. In international trade, only the Metric System is allowed to indicate the quantity of goods. 76. If the parties to a sales contract do not in advance agree upon whether the quantity of goods is determined by gross weight or net weight, it will be determined by gross weight. 77. Net weight refers to the actual tare of all the packing materials.
78. Conditioned weight is, in fact, the actual weight of the moisture of a certain commodity. 79. According to the CISG, if the quantity delivered by the seller is greater than that of the contract, the buyer can refuse all the goods.
80. The more or less Clause in a S/C allows the seller to deliver as more or as fewer goods as possible.
81. The only weakness of delivering fewer goods than stipulated is that the seller gets less paid. 82. The Beneficiary of a letter of credit may indicate his acceptance or rejection of the amendments till when he presents the relevant documents.
83. In our country goods for export must go through customs clearance.
84. When exporting goods on CFR, CPT or FOB terms, the seller must pay the insurance premium.
85. According to UCP500, if documents are in correspondence with L/C’s stipulations, discrepancies between the documents themselves are allowed.
86. Banks will refuse to pay if the documents which are not required by the L/C are presented to them.
87. When documents are presented to the Opening Bank, they shall be examined carefully within one month.
Keys to True or False:
01. F 0 2. T 03. F 04. F 05. T 06. F 07. F 08. T 09. T 11. T 12. F 13. F 14. T 15. T 16. F 17. T 18. F 19. T 21. T 22. T 23. F 24. F 25. T 26. F 27. T 28. T 29. F 31. F 32. T 33. F 34. F 35. T 36. F 37. F 38. T 39. F 41. F 42. T 43. T 44. T 45. T 46. F 47. F 48. T 49. T 51. F 52. T 53. T 54. F 55. F 56. F 57. T 58. F 59. T 61. F 62. T 63. T 64. T 65. F 66. T 67. T 68. T 69. F
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10. T20. F 30. T40. F50. F 60. T 70. T
71. F 72. F 73. F 74. T 75. F 76. F 77. F 78. F 79. F 80. F 81. F 82. T 83. T 84. F 85. F 86. F 87. F
Part III: Definitions 1. tariff 23. clean draft 2. surtax 24. TT 3. anti-dumping duty 25. documentary letter of credit 4. specific duty 26. sight L/C 5. ad valorem duty 27. standby L/C 6. quota 28. particular average 7. import license 29. general average 8. foreign exchange control 30. partial loss 9. shipper 31. constructive total loss 10. charter party 32. open policy 11. shipped B/L 33. warranty 12. clean B/L 34. receipt 13. straight B/L 35. acceptance 14. order B/L 36. force majeure event 15. stale B/L 37. private dispute resolution 16. foreign exchange 38. mediation 17. exchange rate 39. consular invoice 18. offer rate (of foreign exchange) 40. Customs invoice 19. definite offer 41. certificate of origin 20. acceptance 42. pro-forma invoice 21. commercial draft 43. packing list 22. usance draft 44. mate’s receipt
Keys to the Definitions:
1. A tariff is duty or fee is levied on goods being imported into (or exported out of) a country. 2. Surtax is an additional tax. It may also be temporary and discriminatory. In international trade,
import surtax is often collected to cope with international payment difficulties and to prevent dumping.
3. Anti-dumping duty is a fee that is collected by the importing country when it believes that the
exporting country is selling a significant amount of goods to the importing country at prices much lower than in the exporting country.
4. Specific duty is a tax of a certain sum assessed and collected on an article without reference to
its value or market.
5. Ad valorem duty is a tax which is graded according to the cost, or market value, of the article
taxed.
6. A quota is a quantitative restriction or an upper limit in terms of physical quantity or value. 7. An import license is a permit for import issued by the government to control the import of
goods.
8. Foreign exchange control means various forms of restriction imposed by a government on the
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purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents.
9. Shipper: the person who makes the contract with the carrier and hands over the goods for
carriage.
10. Charter party: a written contract in charter shipping between the ship operator and the
charterer (shipper)
11. Shipped B/L: a B/L indicating that the goods have been shipped or loaded on board on a
named vessel, as evidenced by the pre-printed wording or the on board notation on the bill of lading
12. Clean B/L: a B/L bearing an indication that the goods are received without damage,
irregularities or short shipment
13. Straight B/L: a non-negotiable B/L in which the goods are consigned to a designated party 14. Order B/L: a negotiable bill of lading in which the goods are consigned to the order of a
named party, usually the shipper
15. Stale B/L: a B/L that is negotiated when the L/C has expired or one that will reach the
consignee after the arrival of the cargo
16. Foreign exchange is the currency of any foreign country which is the authorized instrument of
settlement and the basis for record keeping in that country
17. Like any other commodities, a foreign exchange has a price, which is expressed in another
currency. Exchange rate is the price relationship between the currencies of two countries or the price of one currency in terms of the other.
18. Offer rate is the price at which a bank is willing to sell foreign exchange to its customers.
19. A definite offer is one that clearly expresses the offerer’s willingness in concluding a
transaction by providing complete and clear information for the deal. Normally it includes all the necessary items for a transaction, specifies the time by which the offer is valid and the time the acceptance must be received, and uses the phrase “offer firm” meaning that the offer is made without reservations.
20. An acceptance is a statement made by the offeree indicating assent to an offer.
21. A commercial draft is a payment order issued by a firm, not a bank, directing another party to
pay a specified sum to the payee.
22. A usance draft is an order of payment that will be made in a specified number of days after
issue or acceptance of the draft or at a fixed future date.
23. A clean draft is one that is paid without the presentation of any other documents attached. 24. TT is a method of transferring funds by telecommunication system such as telex and cable. 25. Documentary letter of credit is a conditional bank undertaking or guarantee of payment.
26. A sight L/C is one by which the beneficiary is paid upon presentation of complying document. 27. A standby L/C is an L/C representing an obligation by the issuing bank on a designated third
party (the beneficiary) which is contingent on the failure of the bank’s customer to perform under the terms of a contract with the beneficiary.
28. Particular average means a loss that is borne solely by the owner of the lost property such as
damage of cargo by sea water.
29. General average means a partial, deliberate and reasonable sacrifice of the ship, freight, or
goods, undertaken for the common safety of the adventure in time of peril and/or extraordinary expenditure with the like object such as the charges for towing a stranded ship.
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