WorksheetsUCP 600 Test
Total questions: 50
Worksheet time: 2hrs 40mins
Name
Class
Date
1.
UCP 600 applies to
a)
Documentary Credits only
b)
Standby Credits Only
c)
Guarantees Only
d)
Documentary Credits & Standby Credits
e)
Documentary Credits, Standby Credits & Guarantees
2.
You as a Beneficiary have received a credit evidencing in additional condition “Applicant shall be bound by and liable to indemnify the banks against all obligations and responsibilities imposed by foreign laws and usage does not apply”. Can a credit be issued in this manner?
a)
Yes
b)
No
3.
Negotiation means the purchase by the nominated bank of
a)
drafts drawn on itself
b)
drafts drawn on a bank other than itself
4.
LC is restricted to BKA Bank, Jakarta, Indonesia by Negotiation. Can BKA Bank, Bandung, Indonesia negotiate the documents?
a)
Yes
b)
No
5.
A documentary credit is available with ABC Bank, Hong Kong by negotiation at 30 days after shipment date. Which of the following actions by ABC Bank, Hong Kong will constitute negotiation, when credit compliant documents are presented?
A. Forward documents to issuing bank for payment at maturity date
B. Pay the beneficiary and forward documents to issuing bank
C. Agree to pay the beneficiary, once the documents are accepted by the issuing bank and forward the documents to issuing bank
a)
B Only
b)
C Only
c)
B & C
d)
A & B
6.
If a documentary credit requires presentation of a “Phytosanitary Certificate issued by a competent authority”. The phytosanitary certificate must be issued by
a)
Government authority
b)
Department of Agriculture
c)
Anyone except the beneficiary
7.
LC states it is available for one month but does not give expiry date. How should the Beneficiary interpret the expiry date
a)
One month from date of advising
b)
One month from the date of issue
c)
One month from the date of invoice
d)
Any of the above
8.
LC states shipment to be made during the middle of the month. How should this period be interpreted
a)
10th to 20th day of month
b)
11th to 20th day of month
c)
10th to 21st day of month
d)
11th to 21st day of month
9.
LC states that shipment to be made on or about 27 September. Which of the following shipment dates would be acceptable?
a)
2022-09-20
b)
2022-10-02
c)
2022-10-03
10.
If a documentary credit requires that shipment to be effected “immediately” upon receipt of L/C. LC issue date is 10th January 2012 and Expiry Date is 20th January 2012. When the shipment should be effected under the L/C
a)
10th to 15th Jan
b)
Latest by 20 Jan 2022
c)
within 2 days from LC advising date
d)
within 5 days from issuance date
11.
LC evidences goods description as Cotton Shirts. However, the applicant of the credit after receipt of the goods checks and finds that a few shirts are not Cotton Shirts. Documents presented to the Issuing Bank evidences that all the documents are Cotton Shirts. Can the Issuing Bank refuse the documents on the basis that a few shirts shipped are not Cotton Shirts?
a)
Yes
b)
No
12.
Your customer presents credit compliant documents under a L/C available with you by negotiation. You negotiate and dispatch documents to the issuing bank by courier, however the documents are lost in transit and do not reach the issuing bank. Is the issuing bank responsible to reimburse your bank?
a)
Yes
b)
No
13.
ABC Ltd presented documents to Citi, Mumbai under an LC issued by Citi, Nigeria and available with HSBC, Mumbai by Negotiation. Citi, Mumbai dispatches the documents to Citi, Nigeria by courier, however the documents are lost in transit and do not reach the Issuing Bank. Is issuing bank obliged to pay based on the copy documents?
a)
Yes
b)
No
14.
XYZ Ltd receives a LC that is available with Citi, Congo by payment. Citi, Congo has advised the credit but have not confirmed the Credit. XYZ Ltd ships the goods as they are confident the Citi, Congo will pay, because Credit says so.
a)
XYZ Ltd is correct, as nominated bank i.e Citi, Congo has to pay
b)
Citi, Congo is not obligated to pay as they have not confirmed the credit and specifically indicated that they will pay
c)
Citi, Congo will pay if they are satisfied about XYZ Ltd’s creditworthiness
d)
We do not know
15.
ABC Bank negotiates documents presented by SKT Ltd and forwards it to issuing bank. Issuing bank accepts documents and forwards it to the applicant. Applicant finds that the inspection certificate does not conform to the LC and demands issuing bank reverse debit, Who is responsible?
a)
Applicant
b)
Issuing Bank
c)
ABC Bank
d)
Reimbursing Bank
16.
LC evidences
Applicant: Sundar Son Ltd, Chittagong
Issuing Bank : Sampath Bank Ltd, Chittagong
Beneficiary : Smith Ltd, Newyork
Nominated Bank : HBC Bank, Newyork
Confirming Bank : DBS Bank Ltd, Chicago
LC is available by : Negotiation
Credit compliant documents are presented to HBC Bank, Newyork for Negotiation. HBC Bank, Newyork checks the documents and finds in goods order but is not willing to negotiate. Smith Ltd sends the documents to DBS Bank Ltd and requests DBS Bank Ltd, Chicago to negotiate the documents. What is the course of action for DBS Bank Ltd?
a)
Negotiate without recourse
b)
Negotiate with recourse
c)
Send the docs to Sampath Bank Ltd on Approval basis
17.
A Confirmed Credit constitute a irrevocable undertaking of the Confirming Bank provided
1. Terms and conditions of the Credit are complied with
2. Documents are presented to Issuing Bank
3. Documents are presented to Confirming Bank
4. Documents are presented to Confirming Bank or Nominated Bank
a)
1 & 2
b)
1 & 3
c)
1 & 4
d)
All options
18.
If a Bank elects not to advise the Credit, it must inform_________ without delay
a)
Applicant
b)
Beneficiary
c)
Second Advising Bank
d)
Issuing Bank
19.
An Authenticated teletransmission LC is dispatched by the Issuing Bank to the Advising Bank. Subsequently the Advising Bank gets airmail confirmation of the LC and they pass notice without checking to the beneficiary. Beneficiary notices some of the terms were different but they had already shipped the goods in terms of teletransmission and presented the relating documents to the advising bank for negotiation. Advising bank check documents and find documents confirm to terms as outlined in the tele transmission but not to the mail notification. Issuing Bank reject the documents stating discrepancies as per airmail confirmation. Is Issuing bank correct?
a)
Yes
b)
No
20.
An LC amendment extends the Late Shipment Date and Curtails the LC Expiry Date. Beneficiary wishes to accept the extension of late shipment date but not the other. The beneficiary:
a)
Is only permitted to accept or reject both terms
b)
Can choose to accept either term without giving notice to anyone
c)
Can choose to accept either term by giving notice to the issuing bank
21.
A bank requests another bank to add its confirmation to a letter of credit. The issuing bank subsequently amends the credit and the confirming bank advises the beneficiary of the amendment without stating whether they have/ have not added confirmation. Confirming bank subsequently refuses to pay compliant documents on the basis that its confirmation was not extended to the amendment. Do you :
a)
Agree with confirming bank
b)
Disagree with the confirming bank
22.
Which are the parties involved in a Credit who need to agree to an amendment
a)
Advising Bank, Issuing Bank, Applicant and Beneficiary
b)
Issuing Bank, Advising Bank and Beneficiary
c)
Issuing Bank, Confirming Bank and Beneficiary
23.
A Credit is issued for USD10,000.00 and evidences Partial Shipments Allowed. An amendment to the Credit is issued increasing the credit amount to USD20000. Documents are presented for USD20000.00.
a)
Beneficiary has accepted the amendment
b)
Beneficiary has not accepted the amendment as the beneficiary has not given an express communication.
24.
A Credit is issued for USD10,000.00 and evidences Partial Shipments Allowed. An amendment to the Credit is issued increasing the credit amount to USD20000. Documents are presented for USD10000.00.
a)
Beneficiary has accepted the amendment
b)
Beneficiary has not accepted the amendment as the beneficiary has not given an express communication.
c)
We do not know at this juncture. We can know only when the next drawing is made
25.
A Credit is issued for USD10,000.00 and evidences Partial Shipments Not Allowed. An amendment to the Credit is issued increasing the credit amount to USD20000. Documents are presented for USD10000.00.
a)
Beneficiary has accepted the amendment
b)
Beneficiary has not accepted the amendment
26.
LC evidences
LC issue date : 06th April 2012
Issuing Bank : Export Import Bank, Tokyo
Beneficiary : Jaison Ltd, Mumbai
Applicant : Cars Japan Ltd
Partial Shipments : Not Allowed
Amount : USD200,000.00 G
oods Description : Hyundai Santro Car – 2 nos.
Nominated Bank : HSBC, Mumbai
LC Amendment No.1 is issued on 19th May 2012 Changes the goods description as Hyundai Santro Car – 5 nos and increases the LC amount to USD500,000.00 Documents are presented by HSBC, Mumbai to Export Import Bank,Tokyo on 20th May 2012, Further, the covering schedule evidences the discrepancies Overshipment effected and LC amount overdrawn. The Invoice presented evidences shipment of Hyundai Santro Car – 5 nos for USD500,000.00. BL evidences shipment date as 05th May 2012. Export Import Bank, Tokyo received the documents on 22nd May 2012 and wishes to refuse the documents quoting the discrepancy over shipment and LC amount overdrawn as they have issued the amendment on 19th May 2012 however, the shipment is made on 05th May 2012. Is the issuing bank correct?
a)
Yes
b)
No
c)
We don't know
27.
A preliminary advice of a Credit indicates the latest shipment date as 10th June 2012. The Applicant of the LC wishes to extend the same to 21st June 2012. Which of the following is allowed in UCP 600?
a)
Changing the date is not at all permissible
b)
Credit can be changed to reflect the change in the latest shipment date as it is beneficial to the beneficiary.
c)
Credit has to be issued with latest shipment date as 10th June 2012 and amendment changing the date to 21st June 2012 has to be issued
28.
XYZ Bank, London issued a letter of credit with the following terms;
Available with: ABC Bank, Hong Kong by acceptance
Drafts at: 60 days after bill of lading date
Drawn on: ABC Bank, Hong Kong
ABC Bank, Hong Kong has not added its confirmation to the L/C..
Beneficiary presented credit compliant documents to ABC Bank,
Hong Kong along with a draft drawn on ABC Bank, Hong Kong as
per L/C terms.
Should ABC Bank, Hong Kong accept the drafts?
a)
Yes
b)
No
29.
LC is restricted to Korea Exchange Bank, Seoul by Negotiation. Documents are presented to Korea Exchange Bank, Seoul. They find that the documents are in order. They do not wish to negotiate. However, the beneficiary wishes to compel them. Does the beneficiary have any grounds?
a)
Yes
b)
No
30.
Issuing bank shall not require a claiming bank to supply a certificate of compliance with the terms and conditions of the LC to the Reimbursing bank. This statement is
a)
True
b)
False
31.
The claiming bank incurred a loss as reimbursement is not provided by the Reimbursing Bank on first demand. Then
a)
Issuing Bank should bear the loss
b)
Advising Bank should bear the loss
c)
Claiming Bank should bear the loss
d)
Reimbursing Bank should bear the loss
32.
If LC is silent as who should bear the reimbursing bank’s charges.
a)
Reimbursing bank should waive its charges
b)
Claiming Bank
c)
Issuing Bank.
d)
None of the above
33.
Under terms and conditions of the LC there is a statement goods should be shipped on a vessel no more than 15 years of age. There was no further reference to the topic in the LC. Documents were presented and no mention was made of the age of the vessel. Negotiating bank should :
a)
Disregard the clause
b)
Request the beneficiary to confirm vessel age
c)
Refuse the documents
d)
Seek clarification from issuing bank
34.
A Negotiating Bank received a document not called for in the Credit. They paid the beneficiary for compliant documents but also returned the document in question to the beneficiary. Beneficiary did not realize document was returned. Applicant was unable to clear consignment because the document they asked the beneficiary for outside of the credit terms was not provided. Applicant now claims compensation from negotiating bank. Negotiating bank is:
a)
Liable
b)
Not Liable
35.
LC calls for bill of exchange. Beneficiary presents a bill of exchange satisfying the LC condition. The applicant is not willing to pay the Issuing Bank stating that bill of exchange format is not sufficient. Is his claim valid as per UCP 600?
a)
Yes
b)
No
36.
The issuing bank is obliged to contact the applicant if they receive discrepant documents, requesting permission to pay. The above statement is
a)
True
b)
False
37.
An issuing bank has refused documents under an LC and referred the same to the applicant who accepted the discrepancies. In this case, is the issuing bank obliged to make payment?
a)
Yes
b)
No
38.
Upon finding discrepancies in received documents, the issuing bank must
a)
Provide the presenter a notice of refusal
b)
List all discrepancies in the notice of refusal
c)
Hold the documents at the risk of the presenting bank
d)
All of the above
39.
LC calls for a Certificate of Quality. A Document titled ‘Certificate of Quality’ ONLY the following
“The Gross Weight and Net Weight as 1000 Kgs and 950 Kgs”.
Is this document acceptable?
a)
Yes
b)
No
40.
A letter of credit requires a “Certificate of inspection issued by XYZ Inspection Company”. The certificate of inspection presented was issued by XYZ Inspection Company and mentioned that the goods did not pass inspection. Is this acceptable?
a)
Yes
b)
No
41.
A letter of credit requires a “Certificate of inspection”. The certificate of inspection presented was issued by the beneficiary. Is this acceptable?
a)
Yes
b)
No
42.
Beneficiary of LC presented Invoice dated prior to the date of the LC for Negotiation. Otherwise documents were in order. The negotiating bank should
a)
Refuse the documents
b)
Treat invoice as complying with LC terms
c)
Request the beneficiary to change the date
43.
A letter of credit calls for a “Original Invoice”. The invoice presented is issued on the original stationery of the beneficiary without any signature or original stamp. Is this acceptable?
a)
Yes
b)
No
44.
A letter of credit calls for a “Certificate of Origin“. Can a Copy of Certificate of Origin be presented?
a)
Yes
b)
No
45.
LC calls for original invoice. Invoice presented states it is original but it (the invoice) is clearly a carbon copy and bears a perforated signature. Negotiating bank treats it as a copy and rejects the document. Are the negotiating bank correct in their reasoning
a)
Yes
b)
No
46.
LC calls for an Invoice. The presented invoice evidence that it is a Xerox copy of “Invoice marked original and signed”. Is this acceptable?
a)
Yes
b)
No
47.
LC calls for an Inspection Certificate to be presented in duplicate. Inspection Certificate presented evidences that it is issued in 3 originals. Which of the following is correct?
a)
Inspection Certificate presented in 2 copies
b)
Inspection Certificate presented in 3 originals
c)
Inspection certificate presented in 1 original + 1 copies
48.
LC calls for an Insurance Policy issued in duplicate. Which of the following is correct?
1. Insurance Policy can be issued in 2 originals and presented in 2 originals
2. Insurance Policy can be issued in more than 2 originals but at least 2 originals must be presented
3. Insurance Policy can be issued in more than 2 originals but all the originals should be presented
4. Insurance Policy can be issued in 1 original but should be presented in 1 original & 1 copy
a)
1 only
b)
1 & 2
c)
1 & 3
d)
1, 2 & 3
e)
1, 3 & 4
49.
Which of the following statements regarding a commercial invoice is false?
a)
It must be issued by the beneficiary
b)
It must be signed by the beneficiary
c)
Description of goods in invoice must correspond to the credit.
d)
It must be issued to the applicant
50.
LC evidences goods description as Diamonds. Invoice evidences goods description as Diamonds and BL evidences goods description as precious stones. The Confirming Bank refuses the documents quoting the discrepancy BL goods description differs from Invoice. The justification given by the Confirming Bank is that the BL evidences goods description as precious stones which can anything other than diamond also. Is the confirming bank justified in rejecting the document?
a)
Yes
b)
No
100 %
