Do you or your staff need to upgrade their skill in documentary credits, cargo insurance or Incoterms 2010?
Here are a few simple questions to help you judge for yourself (care: there are a few ‘googlies’):

  1. Is there any relation between CIP Incoterms 2010 and Institute Cargo Clause C? How are these two linked?
  2. LC ‘place of expiry’ is in the issuing bank’s country; the documents are to be sent in two consecutive lots. The second lot reaches the issuing bank after the LC has expired. Under the UCP, can the issuing bank refuse the presentation?
  3. Where there are more details in documents presented than specified in the LC, will the presentation be deemed to be discrepant? (If ‘yes’, under what condition?)
  4. Incoterms rules deal with (pick one): (i) Contract of sale; (ii) Payment obligations between seller & buyer, viz., when, how, against what documents; (iii) Transfer of ownership of or title to the goods; (iv) Mainly the tasks, costs and risks involved in the delivery of goods by seller to buyer, or (v) The manner, mode and logistics for the transportation of the goods from the seller to the buyer.
  5. Is the applicant’s (buyer) consent or approval a “must” (or necessary) before the issuing bank decides to refuse, or pay against, a presentation under its own documentary credit?
  6. Are the following statements correct: (a) “An issuing bank may also be a nominated bank”; (b) An issuing bank doesn’t ‘negotiate’, it only ‘honours’; (c) a confirming bank cannot refuse to negotiate or honour a complying presentation?
  7. Name all the ‘parties’ to a documentary credit.
  8. Under an LC, when does a bank ‘honour’ and when does it ‘negotiate’ a complying presentation? Is there any difference?
  9. How many days (maximum) are allowed as presentation period if only copies of transport documents are to be presented, and the LC does not limit the maximum number of days for presentation? (UCP 600 Article 14)
  10. LC states: ‘Period of shipment is between 12 May and 20 May’. Accordingly, which of the following statement would NOT be correct: (a) Shipment may be effected on 12 May, (b) Shipment may be effected on 20 May, (c) Shipment may be effected on any date between 12 and 20 May – including the dates stated (i.e. also on 12 or 20 May), or (d) Shipment may be effected on any date between 12 and 20 May, but NOT on (i.e. excluding) 12 and 20 May.
  11. UCP 600 sub-article 10(c) states, ‘If the beneficiary fails to give such notification, a presentation that complies with the credit and to any not yet accepted amendment will be deemed to be notification of acceptance by the beneficiary of such amendment.’ What does it mean?
  12. When an advising bank adds its confirmation to a credit, it (i) is automatically entitled to negotiate documents as a nominated bank; or (ii) it must also be a ‘nominated’ bank if it is to negotiate or honour a complying presentation; or (iii) it cannot negotiate a presentation unless the beneficiary agrees to the confirmation.
  13. Distinguish between LCs available by (i) sight payment, (ii) deferred payment, (iii) acceptance and (iv) negotiation. (UCP 600 Article 6)
  14. Under CIF Incoterms 2010:
    (a) Where does effective “delivery” take place? (b) At which point is the risk transferred from the seller to the buyer? (c) The “I” in CIF means “insurance”; but specifically/precisely which type? (d) Who is supposed to procure it – the seller or the buyer? (e) The insurance is supposed to cover which segment of the transit of the cargo (e.g. only port to port, warehouse to warehouse, only sea journey, land+sea, from seller’s warehouse to buyer’s warehouse…)?
  15. What do you understand by (a) non-documentary condition, (b) data conflict, (c) silent confirmation (d) Uberrimae fldei ?
  16. LC condition: ‘Goods must be of Australian origin.’ Is the beneficiary/exporter required to (a) certify the goods’ origin on the commercial invoice, or (b) include a certificate of origin in his presentation, or (c) need not do anything at all?
  17. The first advising bank is requested by the issuing bank to add its confirmation to the credit. The first advising bank does not do so, but requests the second advising bank to add their confirmation. Is it in order under the UCP rules?
  18. When the consignment is transported from the warehouse of the seller to that of the buyer – both being located far inland – how would you identify whether the LC issued through SWIFT MT700 requires the presentation of a bill of lading (BL) or a multi-modal transport document (MMTD)?
  19. “Incoterms 2010 rules do not recommend the use of ‘CIF’ or ‘FOB’ for air cargo or container shipment.” Is the statement correct? Give reasons.
  20. Explain what you understand by the term ‘insurable interest’. Apart from the seller or the buyer, can any other party acquire ‘insurable interest’ on the export cargo in transit?

The above is only the tip of the iceberg.

If you need to need to know more about letters of credit, UCP 600, ICC documentation rules (ISBP 745), Incoterms 2010, marine cargo (transit) insurance – simply email to for a training session at a location of your choice.

Banks, Institute of Bankers, and trade association in Africa are most welcome to get in touch.

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