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State the “Issuing Bank’s Undertaking” as enshrined in Article 7 a (i – v), b and c when it issues a credit on behalf of its customer under the current International Chamber of Commerce (ICC) Publication in respect of Uniform Customs and Practice for Documentary Credit – UCP 600.
[Total Marks 20]
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a) Under the ICC Uniform Customs and Practice for Documentary Credits (UCP) 600, how is a documentary credit defined? (10 Marks)
b) Describe the contractual relations between the parties to documentary credits. (10 Marks)
(Total: 20 Marks)
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The company has now identified a South African supplier, who can meet the raw material needs of RT, but only against Secure Methods of Payment. Goods will be shipped under CIF Terms. Tema Port. In a meeting with the Chief Operating Officer today, you have been asked to establish an Irrevocable Letter of Credit in favour of the South African suppliers. Your customers advised you during the meeting that they do not understand the implications of this Secure Method of Payment to the new suppliers as they were used to Documents Against Acceptance with their Ukraine Suppliers.
In order to give them proper understanding, you are required to provide answers to the following:
a) Define Documentary Credit under UCP 600. What implication does the definition have on Roofing Technologies? [2 marks each] [4 Marks]
b) Mention two (2) risks each to RT and the beneficiary. [1 mark each] [4 Marks]
c) Mention three (3) documents (excluding Bill of Exchange) which RT should call for. Mention one (1) detail on each document which RT would expect to find if the bank agreed to establish the Letter of Credit. [2 marks each] [6 Marks]
d) Mention three (3) precautions that RT can take to ensure that they receive the right goods, while at the same time satisfying the seller’s needs. [2 marks each] [6 Marks]
[Total Marks 20]
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Explain the following terms as used in the context of Documentary Credits.
i. Confirmed Credits (6 Marks)
ii. Back-to-Back Credits (6 Marks)
iii. Revolving Credits (6 Marks)
iv. Red Clause Credits (6 Marks)
v. Standby Letters of Credit (6 Marks)
[Total =30 Marks]
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
State the “Issuing Bank’s Undertaking” as enshrined in Article 7 a (i – v), b and c when it issues a credit on behalf of its customer under the current International Chamber of Commerce (ICC) Publication in respect of Uniform Customs and Practice for Documentary Credit – UCP 600.
[Total Marks 20]
Find Related Questions by Tags, levels, etc.
a) Under the ICC Uniform Customs and Practice for Documentary Credits (UCP) 600, how is a documentary credit defined? (10 Marks)
b) Describe the contractual relations between the parties to documentary credits. (10 Marks)
(Total: 20 Marks)
Find Related Questions by Tags, levels, etc.
The company has now identified a South African supplier, who can meet the raw material needs of RT, but only against Secure Methods of Payment. Goods will be shipped under CIF Terms. Tema Port. In a meeting with the Chief Operating Officer today, you have been asked to establish an Irrevocable Letter of Credit in favour of the South African suppliers. Your customers advised you during the meeting that they do not understand the implications of this Secure Method of Payment to the new suppliers as they were used to Documents Against Acceptance with their Ukraine Suppliers.
In order to give them proper understanding, you are required to provide answers to the following:
a) Define Documentary Credit under UCP 600. What implication does the definition have on Roofing Technologies? [2 marks each] [4 Marks]
b) Mention two (2) risks each to RT and the beneficiary. [1 mark each] [4 Marks]
c) Mention three (3) documents (excluding Bill of Exchange) which RT should call for. Mention one (1) detail on each document which RT would expect to find if the bank agreed to establish the Letter of Credit. [2 marks each] [6 Marks]
d) Mention three (3) precautions that RT can take to ensure that they receive the right goods, while at the same time satisfying the seller’s needs. [2 marks each] [6 Marks]
[Total Marks 20]
Find Related Questions by Tags, levels, etc.
Explain the following terms as used in the context of Documentary Credits.
i. Confirmed Credits (6 Marks)
ii. Back-to-Back Credits (6 Marks)
iii. Revolving Credits (6 Marks)
iv. Red Clause Credits (6 Marks)
v. Standby Letters of Credit (6 Marks)
[Total =30 Marks]
Find Related Questions by Tags, levels, etc.
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