CDCS practice test 5 discussion

[jmitra]

Hi friends,
I was confused with some of the answers of the a/m test. I’d be glad to discuss them with you if you have time.

1. Bank B confirmed an irrevocable letter of credit issued by in Bank A. The credit was available by beneficiary's draft on the issuing bank at “30 days from the date of negotiation”. Beneficiary presented credit compliant documents to Bank B for negotiation. Which of the following actions by Bank B, is as per the provisions of UCP500?
b) Send documents to issuing bank and request them to advice the maturity date
c) Pay the beneficiary and send documents to the issuing bank informing them the maturity date
Here, I thought the answer be “c”. As I understand from UCP500, 9, if credit is available by negotiation, confirming banks liability is to negotiate (giving value of docs and/or drafts). Therefore, I expect confirming bank “firstly to pay” to beneficiary and inform issuing bank the maturity since it will be calculated from the date of negotiation by confirming bank. How can issuing bank determine maturity?

9. A documentary credit is issued with the following terms
ð Partial shipment not allowed
ð Goods:
10000 MT of sugar – EUR 950,000
Freight charges - EUR 50,000
Total CFR - EUR 1,000,000

Which of the following presentations by the beneficiary is acceptable?

a) Documents evidencing shipment of 9500 Mts of sugar for EUR 925000 and freight charges EUR 50000 – Total EUR 975, 000
b) Documents evidencing shipment of 9500 Mts of sugar for EUR 900000 and freight charges EUR 45000 – Total EUR 945,000
c) Documents evidencing shipment of 10200 Mts of sugar for EUR 915000 and freight charges EUR 35000 – Total EUR 950,000
d) Documents evidencing shipment of 10500 Mts of sugar for EUR 997500 and freight charges EUR 52500 – Total EUR 1,050,000

ii) A & B
iv) A & CMy answer to this question was “A and C”, because as per UCP 600 30,b and (UCP 500 39, b) a tolerance should not exceed %5 more or less. EUR 945.000.- not comply this rule as it is below the limit.

20. A L/C calls for a presentation of a Multimodal Transport Document, which of the following is true?
d) A received for shipment B/L without a on board notation will be acceptable
Can we accept such a document?
.
Regards
Navi

answer from sunny
Hi all,
Regarding first Navi's question: I believe the answer provided is correct because : THE DRAWEE establish the maturity and not the confirming bank. Regarding last question: i think it is the nature of multimodal BL not to have an onboard date when first leg of carriage is by other means than sea.
Regards
Sunny

[jmitra]

i think i will go with Navi. if the document is complying, confirming bank must negotiate. and the LC terms says that the maturity date will be calculated from the date of negotiation. unless the confirming bank advice the negotiation date, how the issuing bank will determine the maturity date. so think answer C is correct if the presentation is complying.

about question 9, i think only A is the correct answer

about 20, here is a definition from business dictionary

B/L which serves only as a receipt for goods accepted for shipment on a named ship (vessel), and does not certify their placement aboard the vessel. Used where the goods arrive at the port of departure before the vessel does, this type of B/L is not considered a complete B/L and is replaced by a shipped on board bill of lading when the goods do go onboard.

i think c should be correct but not entirely

more comments appreciated