Simple L/C Process

1.Buyer and seller agree to terms including means of transport, period of credit offered (if any), and latest date of shipment acceptable.

2.Buyer applies to bank for issue of letter of credit. Bank will evaluate buyer's credit standing, and may require cash cover and/or reduction of other lending limits.

3.Issuing bank issues LC, sending it to the Advising bank by airmail or electronic means such as telex or SWIFT.

4.Advising bank establishes authenticity of the letter of credit using signature books or test codes, then informs seller (beneficiary).

5.Seller should now check that LC matches commercial agreement and that all its terms and conditions can be satisfied.

6.Seller ships the goods, then assembles the documents called for in the LC (invoice, transport document, etc.).

7.The Advising bank checks the documents against the LC. If the documents are compliant, the bank pays the seller and forwards the documents to the Issuing bank.

8.The Issuing bank now checks the documents itself. If they are in order, it reimburses the seller's bank immediately.

9.The Issuing bank debits the buyer and releases the documents (including transport document), so the buyer can claim the goods from the carrier.


Participants in LC Process
______________________________
Buyer
Issuing Bank
Advising Bank
Seller (Beneficiary)

L/C CHECKLIST FOR THE EXPORTER/ Seller

1) Is the Letter of Credit (L/C) irrevocable and issued subject to current International Chamber of Commerce (I.C.C.) rules?

2) Are you satisfied with the bank and country that issued the L/C or do you need it confirmed (guaranteed by a local bank)?

3) Does the expiry date allow sufficient time to present all the requested documentation to the bank indicated?

4) Is the name and address of your company and that of the buyer correct?

5) Is the amount of the credit as agreed? Has the correct tolerance (if any) been applied?

6) Are the payment/credit terms as agreed?

7) Are the goods, their value, unit prices, weight, quantity, quality described correctly?

8) Are all the transport details, such as place and date of shipment, the destination, method of carriage, Incoterm correct?

9) Does the Letter of Credit contain any spelling mistakes?

10) Is the L/C payable/negotiable in XXX Country at the counters of XXX bank?

11) Can the goods be shipped prior to the latest shipment date or in accordance with the shipping schedule outlined in the Letter of Credit?

12) Can the documents required be obtained and produced in the format required by the Letter of Credit?

13) Is transshipment allowed?

14) Is partial shipment allowed, if necessary?

15) Can all the conditions outlined be met?

16) Who pays the various banks’ charges?

Presentation of Documents Under Payment-Sight LC

Negotiation Letter of Credit

Letter of Credit Negotiations

Letter of Credit negotiation is defined within Uniform Customs & Practice for Documentary Credits as the "giving of value". In effect, by negotiating export documents under a Letter of Credit, the nominated Bank will pay the customer and the Exporter, with its own funds, and will rely on the reimbursement by the Issuing Bank at a later date. Letters of Credit that are both available at sight or Usance are capable of being negotiated.

Negotiation of documents under a Letter of Credit can either be with or without recourse to the customer. If the export documents are compliant with the Letter of Credit terms and the Letter of Credit is confirmed by the nominated Bank, then negotiation will be without recourse to the customer. On the other hand, if the Letter of Credit is not confirmed, then negotiation will be with recourse to the customer. 

(What is meant by “with recourse” is that in the event the Issuing Bank refuses to pay or accept documents under the Letter of Credit, the nominated Bank will have the right to claim reimbursement, with interest, on the funds that have been advanced to the customer.).

Benefits

• The customer will be able to receive funds in advance, which can be used to repay the pre-shipment loans that the customer may have taken to produce the goods, pay the suppliers if the customer was an intermediary or fund the working capital requirements. This is especially useful if the customer had granted credit terms to the buyer under the Letter of Credit.

Methods of Trade Settlement | Letter of Credit

Letters of Credit Basics Training

CDCS SAMPLE TEST 9/25 With Answers

1. Which of the following documents MUST be signed?

a) Packing list.

b) Certificate of origin.

c) Commercial invoice.

d) Weight specification.

2. You customer has presented documents under a freely negotiable irrevocable letter of credit. Upon examination of documents, you find that the description of goods in the invoice is not as per L/c. However, your customer wants to be paid before the documents are dispatched to the issuing bank. Which of the following options do you have as a nominated bank?

A) Return the documents to the beneficiary for correction

B) Send message to the issuing bank for permission to negotiate despite the

    discrepancy

C) Send message to the applicant for permission to negotiate despite the

    discrepancy

D) Request the beneficiary to obtain an amendment from the issuing bank

    changing the description of goods

a) A & B

b) A, B & C

c) A, B & D

d) All of the above

3. Bank A receives documents from the nominated bank under a letter of credit issued by it. The nominated bank’s schedule states that they have negotiated documents under reserve due to discrepancies. The schedule also lists down the discrepancies. Which of the following statements is true?

a) Bank A must reimburse the nominated bank since they have negotiated

    documents

b) Bank A is not required to send a notice of refusal

c) Bank A is required to send a notice of refusal, only if it finds discrepancies other than the ones mentioned in the nominated bank’s schedule

d) Bank A may choose to waive the discrepancies mentioned in the schedule and reimburse the nominated bank 

4. Your bank had issued an irrevocable documentary credit which expires on March 20^th and is available with and confirmed by bank N. Beneficiary makes compliant presentation to bank N on March 20^th. The presentation is not honored by Bank  N. The beneficiary then sends the documents directly to you on March 25^th for payment. Which of the following correctly reflects your position?

a) You are not liable to pay the beneficiary as documents were not received by   

    you within the expiry date of the L/c

b) You should urge bank N to pay the beneficiary, since they have added

    confirmation and then reimburse bank N

c) You should return the documents to the beneficiary and request them to send

    the documents through another bank

d) You should pay the beneficiary

5. Which of the following statements is false:

a) In case of non-confirming documents, there is no liability for the nominated

    bank to pay beneficiary

b) Payment made by issuing bank to beneficiary is without recourse

c) Payment made by issuing bank to confirming bank is without recourse

d) Payment made by nominated bank to beneficiary is without recourse

6. L/c stipulates that credit would only be honored at the counters of the issuing bank. The advising bank receives documents what should it do?

a) Examine documents and inform beneficiary of any discrepancies found

b) Examine documents and pass it on to the issuing bank

c) Forward documents directly to the issuing bank without any document checking

d) Ask beneficiary to route the documents through any other bank

7. Bank Good Hope negotiates a set of documents presented by its customer and forwards it to the issuing bank. Issuing bank accepts the documents and forwards them to the applicant. Applicant finds that the certificate of analysis does not conform to the L/c and insist that the issuing bank refund the money debited from its account. Who is responsible?

a) Negotiating bank

b) Beneficiary

c) Issuing bank

d) Applicant is not allowed to check documents

8. Where a presentation has been made by a beneficiary to his bank. Which of the following statement is most suitable?

a) Notice of refusal need not be given

b) Notice of refusal must be given by telecommunication only

c) Oral notice of refusal may be given if the beneficiary is in discussion with the 

   document checker at the counters of the bank

d) Oral notice of refusal may not be given even is the beneficiary is in discussion with the document checker at the counters of the bank as it is not allowed by UCP 600.

9. Which of the following statements are true while handling pending dishonoured documents

A) The documents are held at the disposal of the applicant

B) The documents securely stored

C) The presenter needs to be informed at regular intervals

D) The presenter need not be informed at regular intervals

a) A&B

b) A&C

c) B&C

d) B&D

10. Bank I receives documents under a L/C it has issued on 6^th March. Bank finds the documents to be discrepant. Which of the following notice of refusal sent by Bank I is valid? [ 7^th March is Friday, Bank I does not work on Saturdays and Sundays , there are no bank holidays in March ]

a) A message sent on 13^th March by tele – transmission stating “we received your documents presented under our L/C. However we refuse to pay as the documents are discrepant. Meanwhile we are holding documents at your disposal”

b) message sent on 12^th March by tele – transmission stating “We refuse your presentation as the documents contain the following discrepancies – Late Shipment, partial shipment. We are returning the documents to by courier”

c) A message was sent on 10^th March through tele – transmission stating “We refuse payment as the documents contain the discrepancy late shipment. We will effect payment when documents are accepted by the applicant”

d) A message was sent on 16^th March through tele – transmission ststing “ We refuse payment as the documents contain the discrepancy late shipment. We are holding documents pending further instructions ”

11. Your customer presents an document under an L/C confirmed by yourself. You find the documents to be in compliance with the credit terms and negotiate the documents and forward the same to the issuing bank for payment, which reach the issuing bank on the same day. Issuing bank refuses the documents after five banking days stating a valid discrepancy. Which of the following statements is true?

a) You have recourse to the beneficiary

b) You have recourse to the issuing bank

c) You have recourse to the applicant

d) You have no recourse neither to the beneficiary or the issuing bank

12. An LC issued by Bisco Bank evidences the following:

Quantity is 30000 pairs

Amount is USD 555,000.00

Bisco Bank issued an amendment on 18^th March changing the following

Quantity as 50000 pairs

Amount as USD 700,000

Beneficiary did not communicate its acceptance of the amendment but shipped 50000  pairs of shoes on 5^th March 2007 for USD 700,000 and sent the documents directly to Bisco bank. The documents reached the Bisco bank on 20^th March 2007.

a) Issuing bank is not liable to pay as the shipment was effected before the L/c

    amendment date

b) Issuing bank should ascertain from the applicant if beneficiary was informed of the amendment before its issuance

c) Issuing bank is liable to pay as the documents comply with LC and amendment

d) Issuing bank is not liable to pay because beneficiary did not communicate

    acceptance of the amendment

13. You receive an L/c with the following conditions:

Certificate stating that the ship will not sail to any Israeli port

Quality certificate from a first class agency

Beneficiary presents the following documents

Beneficiary certificate stating that the ship will not sail to any Israeli port

Quality and Quantity certificate issued by a subsidiary of the beneficiary

a) Both documents are acceptable

b) Both documents are unacceptable

c) Ist acceptable but II is not

d) II is acceptable but I is not

14. Which of the following is true regarding sending documents on approval basis?

a) Issuing bank need not examine documents

b) Documents do not meet L/c requirements

c) Negotiating bank send documents only after it gets approval from issuing bank

d) All of the above

15. Which of the following is not a transport document?

a) Charter party bill of lading

b) House bill of lading

c) House air way bill

d) Forwarder’s cargo receipt

16. If a documentary credit calls for a certificate of origin to be issued by official authority, which of the following issuers are not acceptable?

a) Manufacturer (who is different from the beneficiary)

b) Chamber of commerce

c) Government

d) None of the above

17. An L/c in which partial shipment is prohibited is issued for USD 100,000.00 with a tolerance of +10% applicable. Subsequently an amendment is issued reducing the LC amount to USD 90,000.00. The beneficiary did not expressly communicate his acceptance/rejection to the amendment, however, presented documents for USD 98,000.00. Then,

a) The beneficiary has accepted the amendment and documents presented are

    clean

b) The beneficiary has rejected the amendment, but documents are discrepant as

    partial shipment is prohibited

c) The presentation is not valid, as the beneficiary has not mentioned whether the amendment is accepted/rejected

d) The presentation is clean, though beneficiary’s acceptance/rejections is not

    determinable

18. If a credit issued by MT 999 and without stating “full details to follow”, do you regard the transmission as the “operative instrument”

a) Credit is sent via SWIFT medium, hence it is an operative instrument

b) Credit does not state “full details to follow”, hence it is an operative instrument

c) Both A & B are true

d) Credit is not an operative instrument

19. Which of the following statement is/are False:

a) Unless the nominated bank is the confirming bank, a nomination by the issuing bank does not constitute any undertaking by the nominated bank to pay, to incur a deferred payment undertaking, to accept drafts or to negotiate

b) The issuing bank can only request and cannot instruct a bank to add confirmation to a credit even if the bank is its own correspondent bank

c) Credits are rarely issued as available with issuing bank

d) The nominated bank does not have to accept the nomination of the issuing bank, but mere fact of nomination imposes an obligation on nominated bank

20. The additional conditions in LC states “shipment to be effected on Full Container Load (FCL) basis”. The condition should be satisfied in which of the documents:

a) Invoice

b) Bills of lading

c) Separate certificate should be issued by the carrier/agent stating the above  

    condition is fulfilled

d) Should be disregarded since the L/c does not specify the document which need

    to evidence the above condition

21. Bank A receives documents from the nominated bank under a letter of credit issued by I. The nominated bank’s schedule states that they have negotiated documents under reserve due to discrepancies. The  schedule also lists down the discrepancies. Which of the following statements is true?

a) Bank A must reimburse the nominated bank since they have negotiated   

    documents

b) Bank A is not required to send a notice of refusal

c) Bank A is required to send a notice of refusal, only if it finds discrepancies other

    than the ones mentioned in the nominated bank’s schedule

d) Bank A may choose to waive the discrepancies mentioned in the schedule and

    reimburse the nominated bank

22. The issuing bank which receives a request or authority to pay againt discrepant documents from a nominated bank

a) Need not refer the discrepancies to the applicant, if the discrepancies are

    acceptable to it

b) Must refer the discrepancies to the applicant for their approval

c) Must replay to the nominated bank within 5 banking days following the date of 

    receipt of such request

d) The issuing bank is not bound to check documents if it authorises the

    nominated bank to pay

23. Your customer has presented documents under a documentary credit which had the following terms

Documents required – Certificate of origin issued by chamber of commerce

Documents required – Manually signed commercial invoice

Special condition – All packages to be mark with country of origin – India

Which of the following statements are most appropriate?

a) A separate certificate or an certification on the invoice stating all packages

    are marked with country of origin is required

b) Certificate of origin must show all packages are marked with country of origin

c) A separate certificate is not required,  is the certificate of origin states all

   packages are marked with country with country of origin

d) Special condition can be ignored

24. The confirming bank receives documents on Friday 02 April and finds them to be in order on 05^th April. Tenor is 30 days after the bill of lading date. The bill of lading is dated 01^st April, and the confirming bank agrees to pay the beneficiary immediately. On what date would the confirming bank expect to receive funds from the issuing bank?

a) 05^th April

b) 12^th April

c) 30^th April

d) 03^rd May

25. If an applicant requests that the documentary credit expires for presentation at the issuing bank with drafts drawn on the issuing bank 90 days after sight, how should the documentary credit be made available?

a) By sight payment

b) By deferred payment

c) By acceptance

d) By negotiation

26. A documentary credit  that will become available for presentation of shipping documents to the issuing bank only after it has received and approved a performance guarantee is usually described as :

a) Standby

b) Revocable

c) Inoperative

d) Advance Payment

27. In accordance with UCP, what is the maximum number of banking days (inclusive of presentation date) that a confirming bank is allowed to refuse the documents?

a) One

b) Three

c) Five

d) Six

28. If an applicant request that the documentary credit expires at the counters of beneficiary’s bank with drafts drawn on that bank at 60 days after shipment date, how should the documentary credit be made available?

a) By mixed payment

b) By deferred payment

c) By negotiation

d) By acceptance

ANSWERS

1.                  B

2.                  C

3.                  D

4.                  D

5.                  D

6.                  C

7.                  C

8.                  C

9.                  D

10.             B

11.             B

12.             C

13.             A

14.             B

15.             D

16.             D

17.             D

18.             D

19.             D

20.             D

21.             D

22.             A

23.             D

24.             D

25.             C

26.             C

27.             D

28.             D

CDCS SAMPLE TEST 8/25 With Answers

1. The applicant showed to the beneficiary a written undertaking from the issuing bank for its agreement to issue a letter of credit subject to UCP 600. However, due to change in financial position of the applicant, the issuing bank later decided not to do so. The beneficiary wrote to the issuing bank to force its commitment in writing.

Is the beneficiary successful?

2. Under which condition that a confirmed letter of credit subject to UCP 600 may become unconfirmed without the consent of the beneficiary?

3. An issuing bank sent its refusal notice to a presentation under UCP 600 to a presenting bank overseas by courier.

Is this acceptable?

4. A documentary credit is issued for an amount of approximately GBP 40,000.00 payable with drafts drawn at 30 days from date of shipment. Documents are presented on 22 September XXXX with bills of lading dated 01 September xxxx and for value GBP 38,000.00.

Which of the following drafts would be accepted?

1. 30 days from 01 September XXXX for approximately GBP 40,000.00.

2. 30 days from date of shipment – value GBP 38,000.00.

3. Due 01 October XXXX – value GBP 38,000.00.

4. 30 days from bill of lading date 01 September XXXX – value GBP 38,000.00.

a) 1 and 2 only.

b) 1 and 3 only.

c) 2 and 4 only.

d) 3 and 4 only.

5. Which of the 'additional conditions' are deemed to be non-documentary?

1. Beneficiary must provide the applicant with details of the shipment.

2. Shipment must be made on a vessel named Butterfly.

3. Goods must be inspected by the applicant prior to shipment.

4. Goods must be of Indian or Chinese origin.

a) 1 and 2 only.

b) 1 and 3 only.

c) 2 and 4 only.

d) 3 and 4 only.

6. A L/c was issued by 60 days deferred payment from the date of bill of lading. The presented document shows the BL date as 30^th Sep 2008 while the document was received by the issuing bank on 5^th Oct 2008. The issuing bank raised discrepancy on 10^th of Oct 2008. The document was later accepted by the applicant on 15^th Oct 2008. The issuing bank communicated its acceptance on 16^th Oct 2008.

Which one of the following is the correct maturity date of the bill?

a) 29^th Nov 2008

b) 4^th Dec 2008

c) 14^th Dec 2008

d) 15^th Dec 2008

7. Is this refusal notice acceptable for a DC subject to UCP 600?

"We refuse to pay you due to the following three discrepancies:

1. The commercial invoice does not meet the terms and conditions of the DC.

2. Third party B/L presented.

3. Unclean B/L presented.

Meanwhile we are holding the documents at your disposal and risk."

8. A presenting bank had the following messages in its covering letter/schedule dated 24 July 2007 presented against a DC subject to UCP 600.

"We have found the following discrepancies in the documents:

1. The port of discharge in the B/L is not the same as that stated in the DC.

2. Presentation after expiry.

3. Corrections in the certificate of origin are not authenticated by the issuer.

The documents are now presented for collection. Please approach the applicant for a waiver and give us your authority to negotiate by SWIFT message."

The issuing bank sent its refusal notice as follows:

"After consulting the applicant, we determine to refuse the documents due to the three discrepancies with the underlying reasons as stipulated in your covering letter/schedule dated 24 July 2007.

Meanwhile, we are holding the documents at your disposal and risk."

Who is wrong in this case- issuing bank or nominated bank ?

9. An issuing bank sent its refusal notice on the 5th banking day after receipt of the documents presented under UCP 600. In fact a simple set of documents was presented for sales of kitchenware, consisting of a total of 12 pages of documents.

Is this refusal notice sent within reasonable time?

10. Under UCP 600, can a beneficiary, through a presenting bank, have the right to present documents against a confirmed letter of credit directly to the issuing bank?

11. A beneficiary made a compliant presentation under a documentary credit subject to UCP 600. The applicant showed to the issuing bank that the same beneficiary had made fraudulent presentation under another documentary credit issued by another bank and instructed the issuing bank not to pay the beneficiary. The issuing bank did not follow the instruction and paid the beneficiary. The applicant refused to reimburse the issuing bank.

Is the applicant right in doing so?

12. Your customer has received the following amendment under L/c which prohibits partial shipments

1. Decrease in amount of L/c from USD 100000 to USD 90000

2. Inspection certificate from SGS instead of Ministry of Agriculture

What options does your customer have in terms of documents presentation?

a) Reject the amendment in writing, if not it will be assumed that he has

    accepted the amendments

b) Present documents for USD 100000 and inspection certificate from SGS

c) Present documents for USD 90000 and inspection certificate from Ministry of

   Agriculture

d) Present documents for USD 100000 and inspection certificate from Ministry of

    agriculture

13. An advising bank acts as per UCP

a) If it refuses to add confirmation to a documentary credit upon request from the

    issuing bank but still advises the credit to the beneficiary

b) If it passes an incomplete documentary credit to the beneficiary without

    mentioning the fact that the credit appeared incomplete

c) If it takes no action upon receipt of an incomplete documentary credit,

   assuming that the issuing bank will provide all necessary information later

d) If it treats mail confirmation as the LC while it has received by LC through both

    through tele transmission and mail

14. A DC subject to UCP 600 specified a reimbursement instruction that reads:

"Upon receipt of full set of documents in conformity with the letter of credit terms and conditions, we will effect payment as per your instructions".

Compliant presentation was made to the nominated negotiating bank that had given value to the beneficiary and claimed for reimbursements.

The documents were however lost in transit by the courier company.

The issuing bank refused reimbursement because reimbursement would only be effective "upon receipt of documents" as specified in the reimbursement instruction quoted above.

Is the issuing bank correct in its refusal decision?

15. In a DC subject to UCP 600, the issuing bank gave a refusal notice that read:

"We refuse payment due to following discrepancies:

The commercial invoice and the bill of lading are not consistent with each other.

Meanwhile we hold documents at your risk and disposal".

Is this refusal notice valid?

16. You receive an L/c with the following condition

Beneficiary – ABC Co, Taiwan

Manufacturer-XYZ Co, China

Certificate of origin issued by local chamber of commerce

Export License issued by a official authority in the exporting country

Beneficiary presents the following documents

1. Certificate of origin issued by a chamber of commerce in Hong Kong

2. Export license issued by XYZ Co in China

a) Both documents are not acceptable

b) Both documents are acceptable

c) 1 is acceptable but 2 is not

d) 2 is acceptable but 1 is not

17. When advice of refusal states 5 discrepancies and nominated bank observe 3 of them are not valid, is the advice of refusal valid ?

18. In a confirmed credit, if the drafts are drawn on the confirming bank, can the confirming bank negotiate ?

19. A credit stipulated under additional conditions, “shipment to be effected on FCL/FCL basis”. Is it necessary for the bill of lading to indicate shipment effected on FCL/FCL basis?

20. An issuing bank has issued a sight documentary credit to a beneficiary authorising a nominated bank to pay the beneficiary for all documents presented in accordance with the documentary credit terms and conditions. Upon receipt of complying documents drawn under the documentary credit direct from the beneficiary, the issuing bank should:

a) Examine the documents and pay the beneficiary

b) Verify the documents and pay the nominated bank

c) Return the documents to the beneficiary for presentation to the nominated bank

d) Remit the documents to the nominated bank for examination

21. A confirming bank examines documents under a documentary credit, which requires presentation of an invoice, certificate of origin and an ocean bill of lading.

The documentary credit also includes the following clause: “special condition- all packages must be clearly marked with the country of origin”.

Where the documents do NOT show that the packages have been marked in this way and are otherwise in order, the confirming bank should:

a) Reject the documents and suggest to the beneficiary that he present a

   certificate evidencing that this condition has been complied with

b) Reject the documents and suggest to the beneficiary that the certificate of

    origin be amended to include the special condition

c) Contact the issuing bank and withhold payment until clarification is received

d) Ignore the special condition and honour the beneficiary’s presentation of

   documents

22. An LC subject to UCP 600 was issued on 1 August 2007 stating the total value of the goods as "USD 200,000 CIF Hong Kong" and a commercial invoice stating "USD 200,000 CIF Hong Kong Incoterms 2000" was presented.

The Issuing Bank considered this as a discrepancy.

The reasons are:

"CIF" does not exist only in Incoterms. It is also found in other trade terms, such as the USA Trade Definitions, the Warsaw Trade Terms and the like. The Applicant may not mean Incoterms.

Even if the parties do mean Incoterms, it may be Incoterms 1990 other than Incoterms 2000.

Is the Issuing Bank correct in its determination of this discrepancy?

23. Documents under a documentary credit are tendered at the counters of the confirming bank and are mistakenly found to comply with its terms and conditions. The confirming bank pay the beneficiary and forwards the documents to the issuing bank. Upon receipt by the issuing bank, the documents are checked and found to be discrepant. The issuing bank notifies the confirming bank of all discrepancies ten banking days after receipt and refuses to reimburse. In considering whether the confirming bank can recover funds paid, which of the following statements are correct? It:

1) Can recover from the beneficiary

2) Cannot recover from the beneficiary

3) Can recover from the issuing bank

4) Cannot recover from the issuing bank

a) 1 and 3 only

b) 1 and 4 only

c) 2 and 3 only

d) 2 and 4 only

24. A credit was issued by ABC Bank Ltd on 1^st of Oct 2008 and was confirmed by XYZ Bank Limited. The credit was “30 days after sight” available with confirming bank by acceptance. On presentation of documents by the beneficiary on 1^st Nov 2008 to the confirming bank, the confirming bank communicated its acceptance to the beneficiary on the same day and forwarded the documents to the issuing bank. The issuing bank communicated its acceptance on 5^th Nov 2008. What is correct maturity under this presentation?

a) 31^st Oct 2008

b) 1^st Dec 2008

c) 5^th Dec 2008

d) None of the above

25. L/c is available by sight payment with issuing bank and requires presentation of documents within 21 calendar days from the date of shipment

a) Beneficiary must present documents to their banker within 21 calendar days

    from the date of shipment without fail but within the validity of the credit

b) Beneficiary or their banker must dispatch documents within 21 calendar days

    from the date of shipment but not later than expiry of the credit

c) Beneficiary must present documents to their banker before expiry of the credit

d) None of above

ANSWERS

1. NO
2. IF CONFIRMING BANK ADVISES THE AMENDMENT WITHOUT ADDING CONFIRMATION
3. YES
4. D
5. B
6. A
7. NOT VALID
8. ISSUING BANK
9. YES
10. YES
11. NO
12. D
13. A
14. NO
15. NO
16. B
17. YES
18. NO
19. NO
20. A
21. D
22. NO
23. C
24. B
25. D