MINISTRY OF EDUCATION EXAMINATION

NATIONAL ECONOMICS UNIVERSITY COURSE OF

INTERNATIONAL PAYMENT

Exam date : November 25th, 2021

School of Banking and Finance Exam time : 90 minutes
Department of International Finance

Exam No :2
Part I. Multiple Choice Questions (2 Points): Choose the best answer and explain briefly:

1. The exporter sent cargo (steel) to the buyer in CIF condition, Incoterms 2010. Before the
shipment, he did an inspection and everything was ok. The captain signed a clean Bill of Lading.
The problem was that, when the cargo arrived at port of destination, the buyer concluded that the
cargo were wet. The buyer is trying not to pay the cargo because of damages.
a. The buyer can refuse paying because of damages The risk of loss of or damage to the goods passes when the goods are on
b. The buyer has to pay the cargo board the vessel nominated by the port of loading. According to the CIF,
Sellers have to pay transportation fees, insurance fees, and other costs.
c. The buyer and the seller share the risk Moreover, the cargo was checked and signed by the captain. Because of
d. None of the above the two things above, the buyer can not refuse to pay the fee of the
merchandise.

2. Which of the following is not true regarding letters of credit?

a. They are issued by banks on behalf of the importer promising to pay the
exporter.
b. A revocable letter of credit can be cancelled or revoked at any time without
prior notification to the beneficiary.
c. They guarantee that the goods shipped are the goods purchased.
d. All of the above are true.

3. The seller pays for carriage to the named place, except for costs related to import
clearance and assumes all risks prior to the point that the goods are ready for unloading by
the buyer. Which rule in Incoterms 2010?
a. CFR
b. CIF DAT – Delivered at Terminal (named terminal at port or place of destination)
c. DAP Seller pays for carriage to the terminal, except for costs related to import clearance, and
assumes all risks up to the point that the goods are unloaded at the terminal.
d. DAT

4. The risk to the exporter is highest with the … Method.

a. Cash in Advance
b. Letter of credit
c. Collection
d. Open account Slide 15 Chap 7
Part II – Choose ONE question to answer (3 points)
Question 1: Comparing Bill of Lading and Seaway Bill. In which case, Seaway bill is
used instead of Bill of Lading?
Question 2: Comparing Clean Collection and Documentary Collection. Which is more
risky for the exporter.

Part III – Find and Correct mistakes of L/C (3 points)

On June 20th, 2021 Hoang Long export and import company, Vietnam and Johnson
Co,Ltd, USA signed an international sale contract:
Deliver term: CIF Haiphong port, Incoterms 2010
Payment Method: Deferred Letter of Credit (deferred term is 30 days)
Total value: USD500,000
On July 20th, 2021, Korean advising bank received a L/C as followings:
40A: Form of Documentary Credit 32B:Currency Code, Amount
REVOCABLE L/C 500,000 DOLLARS
31C:Date of Issue 41A: Draft at: At sight
150721 (dd/mm/yy) 42D:Drawee
40E:Applicable Rules Hoang Long export and import company
UCP 44A:Port of Loading
31D:Date and Place of Expiry HAIPHONG PORT
250721 (dd/mm/yy) 44B: Place of Final Destination
50:Applicant SAIGON PORT, VIETNAM
Johnson Co,Ltd, USA 44C: Latest Date of shipment
59:Beneficiary 180721
Hoang Long export and import company

Question: Find and Correct the mistakes of L/C?

Part IV – Case study (2 points):

On July 25th, 2021, Vietcombank Hanoi branch received a set of documents from Johnson
Co,.Ltd as followings:
- Bill of lading issued on July 20th, 2020, port of loading: Haiphong port, port of
discharge: Los Angeles port.
- A cover note indicating as followings:
+The amount of insurance coverage: 100% of the CIF value of goods
+ Currency code: EUR
Question: Will the bank pay for these documents?