According to URC 522 of ICC, which of the following documents is a financial instrument? 

•  Invoice

  
  

•  Contract

• Bill of lading 

  
  

• Bill of exchange 

  
  

Answer explanation

Bill of exchange. According to Article 2 of URC 522, financial instruments are used for payment of goods or services, including bills of exchange, promissory notes, and cheques. Commercial documents, on the other hand, include documents such as invoices, contracts, bills of lading, and certificates of origin.

Can certain provisions of URC 522 - 1995 ICC be contrary to the basic principles of Vietnamese law? 

• Yes

• No

Answer explanation

 Yes. URC 522 is a set of guidelines and standards issued by the ICC and is not the law of any specific country. Therefore, in some cases, certain provisions of URC 522 may not be in line with the basic principles of Vietnamese law. In such situations, the parties involved in the transaction should discuss and adjust the provisions to comply with both parties and the relevant Vietnamese laws. (DQUYNH)

 URC 522 applies to which of the following transactions? 

• Domestic transactions only 

  
  

• International transactions 

  
  

•  Both domestic and international transactions

  
  

Bank A issues a collection instruction D/P and the accompanying documents to bank B for collection. However, bank B, due to its good relationship with the importer, hands over the documents and allows the importer to pay after 15 days. The exporter knows about this and demands compensation from bank A for choosing bank B without authorization. Is bank A responsible for the actions of bank B?

• Yes

• No

Answer explanation

No. According to Article 5(c) of URC 522, if the customer does not specify the collecting bank, the remitting bank may use any of its own banks or a bank of its choice in the country of payment.

Bank B receives a collection instruction from bank A with the importer's information as "ACB Company, 56 Tran Xuan Soan, District 7, Ho Chi Minh City." However, there is no company with this name at the mentioned address; instead, there is a company named "ABC Company, 90 Tran Xuan Soan, District 7, Ho Chi Minh City." Bank B takes one month to clarify the information of the importer, causing a delay in obtaining the documents from the importer. Is bank B liable for this delay?

• Yes

• No

Answer explanation

No. According to Article 4 of URC 522, the collection instruction needs to clearly state the name and address of the drawee. If the address is incomplete or incorrect, the collecting bank may attempt to determine the appropriate address and is not liable for any delays caused by the incomplete or incorrect address provided.

 If there are provisions in URC 522 ICC that are contrary to Vietnamese law, how should the exporter apply the collection method?

• 1. URC 522 1995 ICC 

• 1. According to Vietnamese law with the condition of clearly specifying alternative provisions in the collection instruction. 

• 1. According to Vietnamese law without specifying anything. 

• 1. Both parties apply the law of a third country agreed upon by both. 

 Bank A received a collection instruction from the exporter on 19/01. However, bank A can not handle a collection or any instructions related to it because of some Force Majure reasons. So, what should bank A do?

• 1. Ignore the exporter 

• 1. Notify the exporter that we can not handle on 19/10

• 1. Immediately, send an announcement via email that we can not handle 

Answer explanation

According to Article 1, for any reason, if a bank decided not to handle a collection or any related instructions that received from the party gave it to the bank. The bank must advise the party from whom it received the collection or the instructions by telecommunication or, if that is not possible, by other expeditious means, without delay.

In case of partial payment, the presenting bank will release the documents to the drawee (the buyer) when they have just received the first payment from the drawee. According to URC 522, the presenting bank is not without fault, isn’t it?

• yes

• no

Answer explanation

According to Article 19, the presenting bank will release the documents to the drawee only after full payment has been received.

Due to Acts of God, the bank’s business was interrupted so that the principal is to be borne a loss. As a result, the principal asked the bank for compensation. Is the bank liable for this loss?

• yes

• no

Answer explanation

 According to Article 15, banks assume no liability or responsibility for consequences arising out of the interruption of their business by Acts of God, riots, civil commotions,... or any other causes beyond their control.

 If the payment of interest has been refused, which parties will be informed by the presenting bank?

• 1. the remitting bank

• 1. the principal

• 1. the lawyer

Answer explanation

According to Article 20, when payment of interest has been refused, the presenting bank must inform the bank from which the collection instruction was received  by telecommunication or, if that is not possible, by other expeditious means without delay.