1. A documentary credit for USD 120,000.00 calls for shipment of fertiliser in February, March, April
and May. Each shipment is to be for about 500 tonnes. Shipment was effected as follows:
1. 450 tonnes sent 24 February for value USD 27,000.00.
2. 550 tonnes sent 12 April for value USD 33,000.00.
3. 460 tonnes sent 30 April for value USD 28,000.00.
4. 550 tonnes sent 04 June for value USD 33,000.00.
Which of the above shipments will be honoured on presentation?
A 1 only.
B 1 and 3 only.
C 2 and 4 only.
D 1, 2 and 3 only.
2. In accordance with ISP98, which of the following statements is correct? The issuer of a standby
letter of credit MUST:
A validate the breach of any underlying transaction.
B ensure the accuracy of any documents presented.
C ensure the genuineness of any documents presented.
D honour presentations that appear on their face to comply.
3. An issuer of a standby credit subject to ISP98 is responsible for:
A accuracy of any document.
B act of omission by the nominated bank.
C observance of law as stated in the standby.
D performance of any underlying transactions.
4. A reimbursing bank has received a valid claim under its reimbursement undertaking and is
instructed by the issuing bank NOT to honour the claim. In accordance with the URR525, the
reimbursing bank should:
A request the claiming bank to cancel the claim.
B instruct the claiming bank to contact the beneficiary.
C honour the claim and debit the issuing bank’s account.
D dishonour the claim as per the issuing bank’s instruction.
5. An importer requires goods of a stipulated quality while the exporter requires certainty of payment.
Which of the following would BEST meet all requirements?
A Confirmed standby credit payable on demand calling for beneficiary’s quality certificate.
B Confirmed documentary credit payable at sight calling for beneficiary’s quality certificate.
C Confirmed documentary credit available by acceptance with drafts drawn on confirming
bank calling for third party quality certificate.
D Unconfirmed documentary credit payable at sight with drafts on issuing bank calling for
third party quality certificate.