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Export Credit & Letters of Credit Flashcards

7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Export Credit & Letters of Credit flashcards as text

  1. Under UCP 600, how many banking days does a nominated bank have to examine documents presented under a letter of credit?

    Answer: 5 banking days

    UCP 600 Article 14 allows a maximum of five banking days following the day of presentation to examine documents.

  2. Which type of letter of credit provides the exporter with the greatest payment security?

    Answer: Confirmed irrevocable LC

    A confirmed irrevocable LC adds the confirming bank's independent payment undertaking on top of the issuing bank's obligation, giving the exporter dual bank commitment.

  3. What is the primary function of the Export-Import Bank of the United States (EXIM Bank)?

    Answer: Provide financing and insurance to support US exports

    EXIM Bank's mission is to fill financing gaps left by the private sector, providing loans, guarantees, and insurance to facilitate US exports.

  4. A 'discrepancy' in an LC transaction refers to:

    Answer: A document that does not comply with LC terms and conditions

    A discrepancy occurs when presented documents contain errors or omissions that do not strictly conform to the terms of the letter of credit.

  5. Under a transferable letter of credit, the first beneficiary may transfer the LC to a second beneficiary primarily to:

    Answer: Allow a supplier to receive payment directly

    Transferable LCs allow an intermediary (first beneficiary) to direct payment to their supplier (second beneficiary), facilitating trade without the intermediary funding the transaction.

  6. Which document in an LC transaction serves as title to the shipped goods?

    Answer: Negotiable bill of lading

    A negotiable bill of lading is a document of title; whoever holds the original endorsed copy has the right to claim the goods from the carrier.

  7. What does 'at sight' mean in the context of a letter of credit?

    Answer: Payment is made upon presentation and examination of complying documents

    An 'at sight' LC requires the issuing or nominated bank to pay immediately upon determining that presented documents comply with LC terms.