I. True or false1. Without bank’s participation, modern int’l trade payment system would notexist any more T2. The essence of both buyers and sellers concern is whether the counterpartfulfills the contract T3. Int’l settlement and trade payment is a theory rather than a practice F4. Int’l settlement can only be used in visible trade FII. What do the following abbreviations stand for?1. ICC 国际商会The International Chamber of Commerce2. 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 FinancialTelecommunications(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 dollar14. NZD 新西兰元New Zealand dollar15. CAD 加拿大元Canada DollarA. Term explanation1. drafta bill of exchange, esp. any bill before it has been accepted, or a bank bill, or asight bill, or an inland bill. Any written order to pay money2. acceptanceact of accepting responsibility for paying the value of a bill)3. guaranteea 3rd party to a draft, the guarantor, who promises to pay the draft whenpresented 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 draft4. protesta formal declaration in writing made by a notary public, witnessing & recordingthe dishonor of a draft or promissory note5. right of recoursethe 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. presentmenta 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 maturity7. paymentperformed when a draft is paid8. notice of dishonora written information given to the drawer & each endorser on the next businessday after the dishonor of the draft.9. issue1) to draw and sign a draft;2) to deliver it to the payee, based on the Bills of ExchangeAct After the 2 steps, the draft is irrevocable under the drawer’s fir m promise for the drawee is to accept and pay for it.10. endorsementan 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. guarantorperson who guarantees the acceptance and the payment of an instrument12. dishonora failure or refusal to accept a time draft or pay a sight draft when it’spresented.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, 200xAt 90 d/s after sight (2) pay to the order of DEF C0. (3)the sum of Pounds one thousand two hundred and fifty onlyTo XYZ BankLondon (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 bearerDrawee: Northern Bank Ltd, London;Exchange for USD_ 8,690.64_ London, 31 Aug, 2005At 30 d/s after sight, pay this 1st draft (2nd of same tenor& date unpaid) to the order of __ John Smith _______or bearer, theSum of US Dollars ____ Eight thousand six hundred ninety ___________ and64/100 only.Drawn to Northern Bank Ltd, London Peter Hardley, London(Signature)E. Multiple choices1. If a draft is termed like __, its exact time for payment is to be fixed by the payer after hisacceptance. BA. at sightB. at x x d/s after sightC. at x x d/s after dateD. at x x d/s after shipment2. In the following drafts, it is not negotiable if marked with A__.A. Pay to Johnson Co. Ltd onlyB. Pay to bearerC. Pay to ABC Co. & its orderD. Pay to the order of Johnson Co. Ltd3. On the face of a draft, _D_ is to be added to the end of the sum in words to preventfrom being alteredA. OKB. endC. enoughD. onlyIf 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 thepayment, 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 thefollowing form:Promissory NoteIssued in _ Beijing ___ the _1st July __ , 2005. On _1st July__, 2008 fixed,we promise to pay against this promissory note tothe 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, 200xPay to the order of John Smith (2) the sum of threethousand 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 T2. The writer of a check is not allowed to write a check w ith his signature which doesn’tcomply with his signature left to a bank in advance. T3. After the acceptance of a time draft, the acceptor becomes the payer as the primary debtorT4. Traveler’s check is one of the checks.FFill in blanks with proper wordsT/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 adviceSWIFT2. Examined by test key examined by signature examined by signature3. A safe method not so safe as T/T not so safe as T/T4. With _highest__ cost with lower_ cost with lower_ cost5. The fastest and not so often used a useful method of most popular due to its slower_s peed remittance & pay able method of remittance by a bank rather than thepaying bankFill in blanks with proper terms:1. 4 parties to a remittance are remitter,remitting bank,paying bank & payee2. Remittance through a bank from one country to another may usu. be made by one of thefollowing methods:M/T, T/T and D/D.True or false1. D/D stands for demand draft T2. Among T/T, M/T & D/D, T/T is the cheapest method of payment F3. SWIFT is the speediest form of payment T4. SWIFT stands for Society for Worldwide Inter-bank Financial Telecommunications T Multiple choice1. SWIFT is _______B____________________.A. in the U.S.A.B. a kind of communications belonging to T/T system for inter-bank’s fund transferC. an institution of the UN;D. a government organization2. Mail transfers are sent to the correspondent bank C_,unless otherwise instructed byclients.A. by courier serviceB. by ordinary mailC. by airmailD. by sea-mail3. The various methods of settlement all involve the same book keeping, only different at theA .A. method by which the overseas bank is advised about the transferB. method by which the beneficiary is advised about the transferC. the speedD. the beneficiary4. A D payment doesn’t take as long as an M/T paymentA. SWIFTB. T/TC. D/DD. A or BTerm explanation1. M/Tfunds 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/Ta quick way of sending money by cabled bank transfer to a person in another country. Thepayee 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/Da negotiable instrument drawn by a bank on its overseas branch or its correspondentabroad, instructing the latter to pay on demand the stated amount to the holder.4. reverse remittancedifferent 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 initiativelyFill 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 instructionsreceived 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. Commercialdocuments 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 presentingbank), and drawee (or buyer).True or false?1. If the instructions are D/P, the importer’s bank will release the documents to the importeronly against payment. T2. The principal is usu. the importer. F3. Promissory notes are commercial documents. F4. Banks have no liability for any delay or loss caused by postal or telex failure. T5. In the case of documents payable at sight the presenting bank must make presentation forpayment without delay. T6. 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. TTerm explanation1) collectionobtaining payment of a debt, e.g. a bill of exchange (draft), check, etc. through banks from the debtor2) clean collectiona means of collection settlement in which the seller asks his bank to collect his proceeds from the buyer by prese nting 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 collectioncollection 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/Pa 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 paid5) D/Aa 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 bankMultiple choice1. parties to a collection involve AA. drawer, remitting bank, collecting bank, draweeB. drawer, drawee, holder, endorser,C. drawer, endorser, endorsee, payerD. holder in due course, drawer, guarantor, payer2. Ownership of the goods belongs to D before the importer pays or accepts thedocumentary collectionA. payerB. collecting bank,C. shipping companyD. drawer3. Under collection, the payer for the draft should be BA. exporterB. importerC. remitting bankD. collecting bank4. Settlement for collection is based on trade credit because C .A. no banks participateB. commercial draft is drawnC. banks have no obligation to ensure payment5. If drawee refuses to pay when collecting bank presents him the documents, the bank is toCA. ask the payer to explain whyB. write “dishonored” on the draftC. Inform the drawer of the dishonor at onceD. try to protest the draft6. 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 collectionB.under D/P,documents are delivered after pay-ment, while under D/A, after acceptanceC.under D/P, payment is made at sight, while under D/A, after sightD. under D/P, payment is made after sight, while under D/A, made at sightBriefly 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 paymentD/A: exporter’s documents are delivered after importer’s acceptancePayment 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 riskD/P: the exporter suffers low riskD/A: the seller possible to loss both goods and proceedsb. What’s collection based on as a form of settlement?Commercial credit and trade creditc. 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 collectionsd. 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 timeD/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、draweef. How many ways are there in collection & what are they?Three、D/P 、D/A、acceptance documents against paymentFill in blanks with proper wordsa. Under an irrevocable L/C, the issuing bank must bear the 1st reliability for payment.b. An irrevocable credit can neither be cancelled nor modified without the agreement of theissuing bank, the confirming bank (if any) & the beneficiaryc. If a credit is issued by BOC, Guangzhou & confirmed by BOC, New York, the payment isensured 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 ininternational trade.Who areA. paying bankB. issuing bankC. reimbursement bank,D. confirming bankE. beneficiaryF. advising bankG. 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 H2. 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. E3. the bank that issued the documentary credit on behalf of the applicant B4. 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.F5. The bank that is authorized to pay the beneficiary or accept or negotiate his drafts, against his presentation of proper documents. A6. The bank that buys an exporter’s draft submitted to it under a documentary credit G7. The bank that is requested to add its own commitment ( make payment to the beneficiary) to the documentary credit. D8. 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 CWhat do the following abbreviations stand for?1. UCPUniform Customs and Practice2. L/CLetter of credit3. B/Lbill of lading4.N/Nnon-negotiable5. A/Caccount6. H/OHEAD OFFICEMultiple choice1. A is the 1stly reliable payer under an L/C.A. issuing bankB. negotiating bankC. applicantD. advising bank2. The most important thing for a beneficiary of an L/C to examine the L/C is to make sureC .A. the L/C’s authenticityB. 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 bank3. “strict consistency” in L/C business refers to the consistency between C_.A. L/C & S/CB. L/C & goods concernedC. documents & L/CD. documents & goods concerned4. According to UCP500, an L/C is B L/C if it’s not marked “irrevocable” or “revocable.A. revocableB. irrevocableC. either revocable or irrevocableD. none of A, B & CQuestions1. ABC Co., an exporter, who ships the goods & delivers the documents concerned to itsnegotiating 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 beneficiarypresents 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 onlyB. Bank charges when a credit is transferable are payable by the first beneficiaryC. The benefit of an irrevocable documentary L/C may be available to a 3rd party if the 1stbeneficiary uses it as security to obtain another documentary L/C in favor of the actual supplierD. The 1st beneficiary is th e Middleman of the back-to-back L/C & the 2nd beneficiary is theactual supplierE. Red clause credits belong to partial sum to be paid in advance creditsF. There are 2 kinds of revolving credits, one may revolve in relation to time, another may revolve in relation to amountG. 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’snon-automatic restoration to revolve;c. if the negotiating bank is mot informed of stopping restoration to the original amount atthe 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 partyA. 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 InstructionTo: _(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 )__towhich 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, GuangzhouIssuing bank: (2) Sanwa Bank Ltd, ShenzhenCredit No.: (3) 6251470Applicant: (4) ABC Co.Total amount of : (5) USD3.2 mil.(6) Signed statement in duplicate issued by you certifying that the amount drawn hereunderrepresents & 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 termsof this credit shall be duly honored on due presentation to us for payment on or before 30 Dec., 200xA Standby L/C by Sanwa Bank Ltd, GuangzhouIssuing date: 18 Jan., 200xTo: 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 date d 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)2C. Issue a reciprocal credit with following dataIssuing bank: (1) the Fuji Bank Ltd, TokyoBeneficiary: (2) ABC Co., GuangzhouAdvising bank: (3) Bank of Asia, GuangzhouCredit amount for JPY25 mil. To be converted at USD/JPY 100 into (4) USD 0.25 mil.Applicant: (5) Nashi Trading Co. Ltd., TokyoDraft 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., TokyoReciprocal Credit Form( 1 )______Tokyo, 20 May, 200xCredit No. 118-10063Advised through ( 3 ) To: (2 )Dear SirsWe 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: xxxThis is a (7)For ( 8 ) (signature)Choose the best answerA. “This credit s hall be renewable automatically twice for a period of 1 month each for anamount 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-automaticrestriction to revolveB. “Should the n egotiating bank not be advised of stopping renewal within a week, theunused 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-automaticrestoration to revolveChoose the better answera. Whether B/L is provided with the following functions or characteristics:1) It’s a receipt of goods A. yes B. no2) It’s a contract of carriage A. yes B. no3) It’s a document of title A. yes B. no4) It’s a negotiable document A. yes B. no5) It may control the delivery of the goods A. yes B. nob. A B/L has 2 basic parties, viz. carrier andA. consignor B consigeec. Consignor is also called shipper. Generally, the shipper is the seller or theA. consigneeB. beneficiaryunder commercial L/C. In special case, the shipper may be the buyer sometimesd. Whether non-negotiable sea waybill is provided with the following function orcharacteristics1). It’s a receipt of goods A. yes B. no2). It’s a contract of carriag e A. yes B. no3) It’s a document of title A. yes B. no4) It’s a negotiable document A. yes B. no5) It may control the delivery of the goods A. yes B. noe. Whether charter party B/L is provided with the following functions or characteristics1) It’s a receipt of goods A. yes B. no2) It’s a contract of carriageA. yesB. it’s subject to charter party agreement3) It’s a negotiable documentA. yesB. it’s subject to charter party agreement4) It’s a document of titleA. yesB. it’s subject to charter party agreement5) It may control the delivery of the goodsA. YesB. it’s subject tot charter party agreement6) Even if the credit requires presentation of a charter party contract, bankA. willB. won’t examine such contract, but will pass it along without responsibility1) A commercial invoice is the accounting document by which the seller claims paymentfrom the A. shipper B. buyer for the value of the goods &/or services being supplied2) Unless otherwise specified in the L/C, commercial invoice A. need B. needn’t be signed3) If an L/C calls for shipment of FOB Shanghai, then when a commercial invoice under thisdoesn’t specifically state “FOB Shanghai”A. it’s a discrepancyB. it’s not a discrepancyg. As for marine B/L and mail B/L, ___.A. both are title to goodsB. both are negotiable title to goodsC. the former is the negotiable title to goods, but the latter isn’tterms explanation:a . insurance policya legal evidence of the agreement to insure, also a written contract between the insurance co. & the party insured.b. packing listan 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/Lth e 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 a ccept 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 origina 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 answera. Whether CTD or Multimodal Transport Document provided part of the journey by seahas the following functions or characteristics?1) it’s a receipt of goods a. yes b. no2) it’s a contract of carriage a. yes b. no3) it’s a document of title a. yes b. no4) It’s a negotiable document a. yes b. no5) It may control the delivery of the goods a. yes b. noB. Whether a parcel post receipt is provided with the following functions or characteristics?1). It’s a receipt of goods a. yes b. no2) it’s a contract of carriage a. yes b. no3) it’s a document of title a. yes b. no4) it’s a negotiable document a. yes b. no5). It may control the delivery of the goodsa. yesb. noC. Whether a courier receipt provided with the following functions or characteristics?1). It’s a receipt of goods a. yes b. no2) it’s a contract of carriage a. yes b. no3) it’s a document of title a. yes b. no4) it’s a negotiable document a. yes b. no5). It may control the delivery of the goodsa. yesb. noD. 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 ofA. shipmentB. issuance of L/CBriefly 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。