Bill of Lading Quiz - CDCS Specimen Paper
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Questions and Answers

What should the issuing bank do when the beneficiary presents documents that fully comply with the credit terms after the cancellation notice?

  • Seek further instructions from the beneficiary
  • Honour the documents (correct)
  • Refuse the documents as the credit has ceased to exist
  • Return the documents unchecked

    • Which of the following documents is used to obtain the release of the underlying goods?

  • Charter party bill of lading and Non-negotiable sea waybill
  • Bill of lading and Charter party bill of lading
  • Air transport document and Bill of lading (correct)
  • Air transport document and Non-negotiable sea waybill

    • What does a marine bill of lading act as?

  • Evidence of the contract between the seller and the forwarding agent
  • Acknowledgement of receipt of the goods by the carrier, evidence of a contract of carriage and a document of title for the goods (correct)
  • A document of title for the goods and evidence of a contract of carriage
  • Acknowledgement of receipt of the goods by the carrier and evidence of a contract of carriage

    • When does the cancellation of the documentary credit become effective?

    <p>Ten days after the date of the issue of the cancellation notice</p> Signup and view all the answers

    What happens when the beneficiary presents documents to the issuing bank after the cancellation notice?

    <p>The issuing bank honours the documents</p> Signup and view all the answers

    What is the purpose of a bill of lading?

    <p>All of the above</p> Signup and view all the answers

    What happens to the documentary credit after the beneficiary is notified that the applicant has ceased trading?

    <p>The credit is cancelled ten days after the date of the cancellation notice</p> Signup and view all the answers

    What is the role of the issuing bank in relation to the documentary credit?

    <p>To honour the documents presented by the beneficiary</p> Signup and view all the answers

    What is the significance of the date of the cancellation notice in relation to the documentary credit?

    <p>It marks the start of the ten-day period before the cancellation becomes effective</p> Signup and view all the answers

    Why would the issuing bank refuse to honour the documents presented by the beneficiary?

    <p>Because more than ten days have elapsed since the issue of the cancellation notice</p> Signup and view all the answers

    Study Notes

    Bill of Lading Details

    • Types of bills of lading are B (evidencing shipment from France), C (on-board notation dated 21 May), and D (goods packed in six cartons on two pallets).
    • Packing list discrepancy: Bill of lading D states six cartons but packaging details lack pallet information.

    Documentary Credit and Shipment

    • A documentary credit for USD300,000 covers 300 TV sets CIF New York, allowing partial shipments via Bank N.
    • Amended credit details: USD280,000 covering 350 TV sets FOB Hong Kong.
    • Final presentation to the issuing bank includes 280 TV sets for USD280,000 CIF New York, without additional communication from the beneficiary or Bank N.
    • Issuing bank's required action includes options such as:
      • Paying USD280,000
      • Contacting the applicant for instructions
      • Sending a notice of rejection due to discrepancies
      • Returning documents for presentation through Bank N

    Payment Timeline

    • Delivery of goods occurred on 08 October; documents presented include CMR dated 15 days prior to delivery.
    • Credit terms dictate payment is due 30 days after dispatch.
    • Expected payment date calculation:
      • 08 October plus 30 days results in a payment date of 07 November, falling on Monday 08 November.

    Draft Maturity Date

    • Issued credit specifies drafts payable at 30 days after the bill of lading date.
    • Bill of lading timeline:
      • Goods receipt by carrier on 11 June, on-board notation for vessel A on 13 June, and transhipment on vessel B with amended on-board notation to 15 June.
    • Draft maturity date falls on 15 July based on the amended notation.

    Documentary Credit Presentation Requirements

    • A documentary credit mandates an invoice in three copies; compliance requirements include:
      • All copies must be original.
    • In accordance with ISBP provisions, invoices may include specific adjustments:
      • Deduction for discounts not mentioned in the credit.
      • Over-shipments marked as free of charge.
      • Goods not specified in the credit must be highlighted as free of charge.

    Additional Documentary Credit Issuance

    • A documentary credit is issued for approximately GBP40,000 with drafts set for 30 days from the shipment date.
    • Documents presented on 22 September correspond to bills of lading dated 01 September.

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    Description

    Test your knowledge on bill of lading with questions extracted from the CDCS Specimen Paper. Questions cover scenarios such as indicating shipment from France, on-board notations, and discrepancies between packing list and actual packing of goods.

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