Multiple choice: 1. D  2. TFTFT 3. CE 4. E 5. ACD 6. CD 7.B D  8.  A 9. BC  10. AC

The date of delivery:  2014 june 23

The loading port: Port of Koper

The port of arrival/destination: Port of Mar Sao Paolo

The required documents are:  commercial invoice, certificate of origin, packing list, bill of lading(clean,full set, blank endoresed), insurance policy(blanked endoresed)

The promissory note:       16 200 000*0,25= 4 050 000

I, Ministry of Agriculture of Croatia, Zagreb promise to pay against this promissory note to the order of Mercantica Meccanica, Sao Paolo 4 050 000 Euros, four million and fifty thousand euros at UniCedit Bank Zagreb.

Tenor: 6th May 2014

Zagreb 5th april 2014                                                                                   Ministry of agriculture of Croatia


endorsee                                                                                                endorser

Banco Paribas AV pres….                                                                     Mercantica Meccanica, Sao Paolo

Please make the freight forwarding deal!

Face value: 4 050 000 euros

(4 050 000*28*0,012)/365= 3728 euros

4 050 000-3728 = 4 046 272 euros

Banco Paribas pays this amount for buying the P/N

1.Who is the issuing bank of the documentary credit? buyer’s bank-UniCredit Bank

2.Which bank is the confirming bank- Banco Paribas

3.Who is the applicant in the doc credit?- Ministry of agriculture of croatia

4.Who are the contracting parties in the contract of reinbursment? buyer+issuing bank

5.What securities could be involved in the contract of reinbursment? Bill of exchange, promissory note

6.What is a documentary credit by its legal nature? It’s a contract which is a subject to the civil law and to the icc usage ucp 600. Including two contracting parties: the issuing bank and the beneficiary ( supplier)

7.What duties should be performed by the advising bank? The advising bank verifies the authentity of the doc credit and forwards it to the beneficiary.

8.List 2 similarities between the letter of crredit and the doc. credit. : Both of them documents that testifies that there is a debt. Payment obligations.

9.Which type of documentary credit include two documentary credits as banking undertaking? Please name the actors.  Irrevocable Doc. Credit. Actors: Issuing bank, Advising Bank, Beneficiary(seller)

10.What does negotiation in a documentary credit mean? Before deadline of the payment after the examination and acceptence of docs a bank may advance payment to thte beneficiary. Freely negotiable doc credit: any bank may advance if the issuing bank is credit worthy.

11.What is a nomination? Contract of appointment between issuing bank and an involved bank. Types: nomination for advising,for conformation, for payment

12.What is a techincal and legal base of banks cooperation? Technical base: Swift system/electronic massage transfer. Legal: Correspondent banking relationship and ucp 600

What law is to be applied to the ddocumentary credit? The country where the issuing bank is located, laws of Croatia.

13.Who pays the banking charges of the documentary credit? buyer-ministry of agriculture of Croatia

14.Please define the situation where the banks are empowered to dishonor! Please apply the principles. Not precise specification of place of amount. Evident fraud in doc credit. Moratorium discrepency between docs sent by beneficiary, missing documents, late submission of documents.

15.Why should the documents of title be blank endoresed? Since they serve as securities in the hands of the issuing bank, so they are blank endoresed not to name the bank as owner.

16.Who is the guarantor? Buyer’s bank-Unicredit Bank Zagreb

17.Who instructs the bank for opening the guarantee? bidder-Mercantica Meccanica

18.What law is to be applied to the guarantee? State law of the guarantor

19.Who pays the banking charges of the guarantee? The beneficiary

20.Please put the right wordings of the principle of independence! The banks are dealing with documents and have no regard on the real transaction.

21.What law is to be applied to the promissory note? Place of insurance- Croatian law

What does abstract nature of B/E mean? It means that B/E is not drawn to special goods.

What does the principle „ with recourse” mean? The bank(Banco paribas) has the right to reclaim the price paid when and of the main obligers

24. 1,Drawer-payer

2,name of doc.=promissory note and evident promise to pay

3,payee, and that he has the right to order upon this promissory note

4,tenor=expiry date

5,sum of money(claim)

6,date and place of issuance

7,signature of drawer

8,place of payment

25,They can provide a loan for the croatian purchaser  and/or act as a security agent

26,As there exists a warranty guarantee , they can inform the buyer so he can  call for a substitution or repair.

27, As the documentary credit is an independent irrevocable tool it is independent of the underlying transaction therefore the bank shouldobey.

28,payment at sight


30,a, give him the documents that are in full compliance