B. the bill is paid or accepted
C. the buyers has cleared the goods D. both A and B
3) The importance of distinction between
financial documents and commercial
documents lies in that it helps decide whether it is __D__ A. inward collection
collection
or
outward
exporter.
b) A bill of lading is an evidence of the
contract for carriage between the exporter and the carrier.
c) A bill of lading is a quasi-negotiable document.
d) A bill of lading acts as a document of title to goods being shipped overseas.
2) What are the final procedures of export
L/C?
Dispatching documents and making reimbursement claim are the final procedures of export L/C.
3) What are the liabilities of the negotiating
bank?
The liabilities of the negotiating bank are to assert whether the documents appear on their face value, to be in compliance with the terms and conditions of the credit and that there is no inconsistency. 4) Is the beneficiary liable for the risk of
delivery loss of documents from the nominated bank to the issuing bank? The beneficiary is not liable for the risk of delivery loss of documents from the nominated bank to the issuing bank. 5) What does the dual mature dates mean?
A credit with dual mature dated contains both an expiry date and a date for the latest shipment, if these two dates are the same ,an amendment can be applied to extend the credit expiry date.
B. bill collection or goods collection C. cash collection or check collection D. clean collection or documentary collection
4) When is a bill of lading issued?__B__ A. When the shipper makes up the
order B. When the carrier received the goods C. When the producer manufactures
the goods D. When the carrier delivers the goods
to the consignee 5) A commercial invoice is __B__ A. a contract for delivery of the
ma=erchandise
B. a demand for payment
C. a statement describing the
merchandise, its cost, and shipping charges
D. a promise of payment
5. Answer the following questions 1) What are the functions of B/l?
There are four main functions of B/L: a) A bill of lading acts as a receipt of the
goods from the shipping company to the
Chapter 10
1.Put the following phrases into English 信誉调查 credit investigation 提货担保 转移风险 第二还款来源 信用额度 shipping guarantee transfer risk the second source of repayment credit line 26
2.Put the following sentences into English
1) 国际贸易融资是银行向进口商和出口商提供的国际结算项下的融资服务。
International trade finance is a financial service under the international trade settlement provided by banks for importers and exporters.
2) 信用额度内容和贸易融资产品是构成贸易融资的重要因素。
Credit line structure and trade financing facilities constitute important factors of trade finance.
3) 在信用证业务下，银行应该特别关注贸易背景和市场。
The bank should always keep an eye on the trade background and its market under the
letter of credit.
4) 监督是控制打包放款风险的重要措施。
Supervision is an important step to control the risk of packing loan.
5) 出口押汇是出口银行提供的贸易融资产品。
Export bill purchased refers to a financing facility provided by exporter’s bank.
3. True or False
1) Trust Receipt (T/R) is not a kind of credit line granted by the bank to the importer.(F) 2) Business of letter of credit is not a contingent liability of a bank.(F)
3) The bank should establish a credit file for the importer, and is ready to cut the proportion of loan tat any time if there is any sign of risk.(T)
4) The bank must be careful when it makes a packing loan for a transferable letter of credit.(T) 5) The bank can only purchase the documents and bills when thy comply with the terms and
conditions of the credit, because the issuing bank is obliged to effect payment upon the conformity of documents with the letter of credit.(T) 4.Multiple Choice
1) To the exporter, the fastest and safest
method of settlement is __B__ A. letter of credit B. advance payment C. collection
D. banker’s draft
2) To the importer, the fastest and safest
method of settlement is __C__ A. letter of credit B. advance payment C. collection D. banker’s draft
3) The cost for the production will decrease
if the goods are produced on a large
scale. This is called __A__ A. economies of scale B. variety of style C. specialization
D. patterns of demand
4) Invisible trade consists of such items as
__D__ A. transportation services
national borders
B. foreign tourist expenses
across
C. insurance services across national
borders D. product exchange across national
borders 5) In international trade, the seller ships the
goods to the buyer when there is no
purchase made. The seller retains title to the goods until the buyer has sold them. This is __C__ A. bidding B. agency C. consignment D. auction
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5. Answer the following questions
1) What are the facilities of trade finance included?
Those facilities include letter of credit issuing, bill purchased, trust receipt, shipping guarantee, receivables and warehouse bill as pledge, anticipatory credit, packing loan, bill discounted, factoring and forfeiting. 2) What does the soft clause mean?
The soft clauses of a letter of credit are important factors to affect the refund of a packing loan. The soft clauses are those which beneficiaries cannot or are hard to fulfill even if they make grate efforts.
3) Why will the bank be well informed about the market?
The bank should also be kept informed about the market, because the market is changeable, and the operation of a letter of credit will last more than one month. 4) What does Forfaiting refer to?
Forfeiting is the term generally used to denote the purchase of obligations falling due at some future date, arising from deliveries of goods and services—mostly exporter transactions – without recourse to any previous holder of the obligation. 5) What is export financing?
Export financing is a fund arrangement provided by banks for export-oriented transactions.
(02) A documentary Credit is received without a stipulation of whether partial shipments are allowed. Which of the following statements is applicable? A. They are allowed. B. Refer to the issuing bank. C. Refer to the beneficiary. D. They are prohibited.
(02) If the beneficiary does not bank at the bank on whom the draft is drawn, the funds will be treated as ( ).
A. uncollected B. uncleared C. unclaimed D. uncommitted
(02) The credit created for international settlement among bank not only provides a sense of security for the traders involved, but also a reliable source of finance for foreign trade where required. The credit created, in general, favors the exporter. In order to reduce the possible risk the export usually insists on the buyer establishing accredit in his favor before shipment is unloaded.
There are generally several types of credits. A “confirmed credit” guarantees payment to the beneficiary, provided that the credit terms and conditions are met and the standing of the advising bank in the beneficiary’s country is sound. A “revocable credit” may be cancelled at any time up to the moment the advising bank pays. This type of credit is the least favorable to the exporter. There is a risk that the goods may be shipped and the credit revoked before documents are presented to the advising bank. An “irrevocable credit” may not be cancelled or even amended without the consent of all the parties involved. This type of credit guarantees that no
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single party will revoke the contract already signed.
Within the credit arrangement, the issuing bank agrees to pay the advising bank, and the advising bank pays the exporter according to the terms of the documents which appear to fulfil the conditions of the credit. Banks, however, are not bound by, and therefore, not concerned with the underlying sales contract on which the credit requirements are based. As long as the documents are in good order and there are no apparent problems with the process, the buyer is still responsible for payment to the issuing bank although the goods received may be of inferior quality to those ordered.
(1) The word “credit” in the first line of the passage refers to: A. loan B. trust C. B/L D.L/C
(2) According to the passage, which of the following statements is correct? A. A “revocable credit” may be cancelled at any time. B. The credits are usually in favor of the exporter. C. An “irrevocable credit” may not be amended. D. The credits are usually in favor of the importer.
(3) Why does the exporter usually insist on the buyer establishing a credit in his favor before shipment is unloaded?
A. To collect the proceeds. B. To draw drafts.
C. To revoke the contract. D. To reduce the possible risk. (4) Which of the following credit is not mentioned in the passage? A. Irrevocable B. revocable C. standby D. confirmed (5) Who is not responsible for payment of L/C?
A. advising bank B. confirming bank C. buyer D. issuing bank
(02) describe the buyer credit procedure of providing loan to importer’s bank on-lending to the importer, in the order of the numbers given in the chart. exporter ② importer guarantee Government ③ ③ on-lending agency ⑤ Exporter ① Importer’s bank ’s bank guarantee ④ (03) The importer will require a full set of bills of lading in order to obtain the goods from overseas port. The bills of lading can only be obtained by payment of the bill of exchange (D/P), or by acceptance (D/A). Therefore, the importer cannot obtain the goods without paying or accepting the bill of exchange, and conversely an exporter 29
retains control of the goods until payment or acceptance of bill of exchange .When good are sent by air, the airway bill could show the importer’s bank as consignee. Once again the importer must pay or accept a bill of exchange to be able to obtain the goods. Once the importer has paid or accepted the bill of exchange, the importer’s bank will issue a delivery order. The delivery order is an authority, signed on behalf of the bank, authorizing the airport to release the goods to the named importer. An exporter should obtain the prior agreement of the importer’s bank before he consigns goods to that bank. In practice, the importer’s bank will not agree to be named as consignee, unless its own customer is of major importance.
When D/P terms are used, it is unnecessary to include a bill of exchange, since the overseas bank can release documents on payment of the invoice amount. However, sight drafts are usually include. (1) The meaning of D/P is ( ).
A. dollar against Pound B. document against payment C. delivery after payment D. dollar in payment (2) The importer can obtain the goods only by ( ). A. paying or accepting the bill of exchange B. paying in cash
C. opening a letter of credit or a L/C D. showing the bill of lading
(3) When goods are sent by air, ( ) can issue a delivery order to release the goods.
A. the exporter B. the exporter’s bank C. the importer D. the importer’s bank
(4) The importer’s bank will not agree to be named as consignee because ( ). A. its own customer is of major importance
B. the exporter will not obtain the prior agreement from it C. the exporter’s customer is not of major importance D. it worries about the importer’s potential default
(5) ( ) are the most important documents in international settlement. A. Commercial invoice, bill of lading and insurance documents B. Commercial invoice, insurance documents and airway bills C. Bill of lading, airway bills and a bill of exchange D. Sight drafts, delivery order and bill of lading
(04) A standby letter of credit, like a commercial letter of credit, is a promise by the issuer to honor the beneficiary’s presentation of the document or documents specified in the letter of credit. The standby letter of credit, however, is not typically used as a payment mechanism. In a standby letter of credit, the parties do not normally expect that the presentation of documents will occur. The issuer is merely “standing by” just in case the obligation in the underlying transaction is not performed by the obligor.
(1) The standby letter of credit is often used as a payment mechanism. A. Right. B. Wrong. C. Doesn’t say.
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