LIBF Level 4 Certificate for Documentary Credit

®
Specialists (CDCS )
Session code: Specimen paper A
Length of examination: 3 hours
___________________________________________________________________________

Supporting Documentation for In-Basket Exercises 1–3

In-Basket 1 should be referred to when answering Questions 71–75

In-Basket 2 should be referred to when answering Questions 76–80

In-Basket 3 should be referred to when answering Questions 81–85

Applicable current ICC rules apply throughout.

Instructions to candidates

1. Read the instructions on both sides of the answer sheet carefully.

2. Use the examination answer sheets provided for your answers. Please do not note your
answers in this booklet or in the simulation booklet, as they will not be recorded.

3. Refer to the relevant in-basket supporting documentation, as indicated above, when answering
questions 71–85 in the question paper.

4. Hand in all the examination materials before you leave the examination, including the answer
sheet, the question paper and the in-basket / simulation booklets and have them checked by the
invigilator. Failure to do so will invalidate your entry.

The London Institute of Banking & Finance is a registered charity, incorporated by Royal Charter.

The International Chamber of Commerce (ICC) is the largest, most representative business organization in the world.

This qualification is regulated by the regulatory authorities for England and is incorporated into the Regulated Qualifications Framework
(RQF) at Level 4.
 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

Supporting
Documentation
In-Basket 1

You should refer to in-basket 1 when answering questions 71–75.

Introduction

You are a documentary credit specialist at an advising bank and receive the attached documentation
today. Questions 71–75 relate to a documentary credit issued by a SWIFT MT700 message.

Documents attached

1. SWIFT MT700

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

INCOMING SWIFT MT700

FROM ISSUING BANK

TO ADVISING BANK
MESSAGE USER REFERENCE 57665602

27: SEQUENCE OF TOTAL 1/1

40A: FORM OF DOCUMENTARY CREDIT IRREVOCABLE

20: DOCUMENTARY CREDIT NUMBER 9876543210

31C: DATE OF ISSUE 06 MARCH XXXX

40E: APPLICABLE RULES UCP LATEST VERSION

31D: DATE AND PLACE OF EXPIRY 06 NOVEMBER XXXX USA

50: APPLICANT XYZ CO

59: BENEFICIARY ABC CO

32B: CURRENCY AND AMOUNT USD 1,000,000-00

41D: AVAIL. WITH/BY ISSUING BANK BY ACCEPTANCE

42C: DRAFTS AT 120 DAYS SIGHT

42D: DRAWEE XYZ CO

43P: PARTIAL SHIPMENTS PROHIBITED

43T: TRANSHIPMENTS PROHIBITED

44C: LATEST DATE FOR SHIPMENT 06 OCTOBER XXXX

44E: PORT OF LOADING / MUMBAI

AIRPORT OF DEPATURE

44F: PORT OT DISCHARGE / SAO PAULO

AIRPORT OF DESTINATION

45A: DESCRIPTION OF GOODS ABOUT 1,000,000 PIECES OF FROZEN

CHICKEN LEGS AT ONE US DOLLAR PER
PIECE CIF

46A: DOCUMENTS REQUIRED +SIGNED COMMERCIAL INVOICE IN

THREEFOLD

+PACKING LIST IN THREE FOLD

+CERTIFICATE OF ORIGIN IN
1 COPY
+BENEFICIARY’S CERTIFICATE STATING
THAT THE FOLLOWING HAVE BEEN
FORWARDED TO THE XYZ COMPANY WITHIN
FIVE DAYS AFTER THE SHIPMENT DATE:
ONE COPY COMMERCIAL INVOICE ONE
COPY CERTIFICATE OF ORIGIN ONE COPY

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

INSURANCE CERTIFICATE ONE ORIGINAL

BILL OF LADING

+INSURANCE POLICY COVERING ALL RISKS

ISSUED IN TWO ORIGINALS INDICATING
THAT CLAIMS ARE PAYABLE IN BRAZIL

+FULL SET OF OCEAN BILLS OF LADING

CONSIGNED TO ORDER OF APPLICANT
MARKED FREIGHT PAID

47A: ADDITIONAL CONDITIONS 1. BENEFICIARY MUST PROVIDE APPLICANT

WITH DETAILS OF WITH DETAILS OF SHIPMENT VIA EMAIL

2. SHIPMENT MUST BE MADE ON VESSEL

BUTTERFLY

3. GOODS MUST BE INSPECTED BY

APPLICANT PRIOR TO SHIPMENT

4. GOODS MUST BE OF INDIAN OR CHINESE

ORIGIN

48: PERIOD FOR PRESENTATION WITHIN 20 DAYS AFTER THE DATE OF

SHIPMENT BUT WITHIN CREDIT VALIDITY

49: CONF INSTRUCTIONS CONFIRM

78: INSTRUCTIONS ON RECEIPT OF DOCUMENTS BY US IN

COMPLIANCE WITH THE CREDIT WE WILL
REIMBURSE YOU IN ACCORDANCE WITH
YOUR INSTRUCTIONS AT MATURITY

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

Supporting
Documentation
In-Basket 2

You should refer to in-basket 2 when answering questions 76–80.

Introduction

A bank has issued the attached Standby Letter of Credit.

No advice of non-renewal has been issued.

Documents presented

1. Standby Letter of Credit

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER 234CB/20X5

Issued by: Date: 10 September XXXX

Worldwide International Bank Ltd
Guarantees Department
Lombard Street
London, United Kingdom
EC3V 2BB

To: Via:
North American Wheat Farmers Co-operative Inc Marsh Hope Bank Inc
th
Building # 6 (4 Floor) Wall Street
Avenue of the Americas New York, NY 10005
New York, NY 10024

Dear Sirs,

We hereby issue in your favour our irrevocable standby letter of credit No. 123DB/20X5 on behalf of Nicholas
Lord Ltd, Walwork Street, Oxford OX1 2BD covering the supply of cereal grain. This standby letter of credit is
for an aggregate amount of up to GBP2,100,000 [Two Million One Hundred Thousand Pounds Sterling].

This standby letter of credit will expire on 9 September XXXY and all demands must be presented at our
counters before this date.

This standby letter of credit is available by your drafts at sight drawn on ourselves accompanied by your dated
statement bearing our standby letter of credit number 123DB/20X5 indicating the amount demanded and
signed by an authorized official of North American Wheat Farmers Co-operative Inc, stating “We have shipped
the required goods and supporting documentation to Nicholas Lord Ltd and have not been paid the amount(s)
due and owing within 30 days from the date of our invoice(s)”.

Conditions applying:

1. The expiry date of this standby letter of credit will automatically be extended for a period of one
calendar year from its stated expiry date, unless you have received notice in writing from us at least 15
days prior to the said expiry date and such notice states that we will not be renewing the standby letter
of credit.
2. This standby letter of credit is transferable. Any transfer request must be in writing, authenticated by
your bankers, and be accompanied by the original advice of our standby letter of credit detailing your
requirements in respect of the transfer.
3. This standby letter of credit is divisible with both multiple drawings and partial drawings permitted.

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

4. All changes, costs and expenses incurred in respect of this standby letter of credit are for your
account.
5. Our standby letter of credit number 123DB/20X5 is to be included in all correspondence.
6. Demands under this standby letter of credit received by authenticated SWIFT message on or before
the standby letter of credit expiry date will be accepted, provided said authenticated SWIFT message
confirms that all required documents have been forwarded by courier to ourselves at the address
stated above.
7. This standby letter of credit and any subsequent amendment(s) thereto shall be subject to the
International Standby Practices, International Chamber of Commerce Publication No. 590 (‘ISP98’).

Yours faithfully,

For and on behalf of Worldwide International Bank Ltd

Frank A Gilman Sharna Top

Frank A Gilman Authorised ‘A’ signatory (G182) Sharna Top Authorised ‘A’ signatory (T411)

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

Supporting
Documentation
In-Basket 3

You should refer to in-basket 3 when answering questions 81–85.

Introduction

You are the documentary credit specialist at the issuing bank. The attached documentary credit
application is provided to you today.

Documents presented

1. Documentary credit application

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

Commercial Documentary Credit Application To: Commercial Bank International Department

Send By Full Cable/Telex Courier Date: July 1

Party to be Named as Applicant: (Name & Address) Beneficiary: (Name & Address)
USA CABLE COMPANY KOREA CABLE CO.
400 W. MAIN ST. 4 TAEGEAU BD
BOSTON, MA 4 SEOCHEO KU, SEOUL
USA KOREA
Contact at Beneficiary (Name and Phone No.):

Advising Bank: (If left blank, Issuer may select) Amount: (In figure and words)
ANY BANK IN KOREA US$ 26,500.00
TWENTY-SIX THOUSAND FIVE HUNDRED US DOLLARS
Currency: Tolerance:
US DOLLARS 5%
Covering 100% of invoice value (If blank 100%)

Available by: Expiration date: SEPTEMBER 16

Drafts at sight Place of Expiration: KOREA
By payment ______Days Sight Unless otherwise specified herein, the Credit is to expire at
By Acceptance 60 Days after ship date Commercial Bank’s Counters.
Other ___________________
By Deferred
payment

Partial shipment: Permitted Not allowed Transhipment: Permitted Not allowed

Transferable letter of credit: Yes No Transferring bank: ANY BANK IN KOREA

Shipment from/Port of Shipment to/Port of Final destination Latest shipment date

loading discharge LAS VEGAS SEPTEMBER 1
BUSAN NEW YORK

Merchandise description as it appears in the letter of credit: TELEPHONE CABLE

Incoterms (price basis) EXW FCA FOB CFR CPT CIF CIP OTHER

Documents required:
Commercial invoice in 1 originals and 3 copies. Signed? Yes No
Packing list in 1 originals and 3 copies.
Certificate of origin in 1 originals and 3 copies.
Negotiable marine insurance certificate in 1 originals and 1 copies. _____ % Invoice value covered (If blank 110%)
Coverage to include all risks war risks WJOB TPND Other ___________________
Transport document: Ocean B/L Multimodal B/L Air waybill Truck B/L Other ___________________
Presented in 3 originals and 3 copies. (If B/L please note number in full set, such as 3 of 3, or 2 of 3)
Consigned to / to order of Applicant (if blank, consigned to order of Commercial Bank)
Marked notify: Applicant (if blank, notify applicant)
Marked freight: Prepaid Collect
Other documents: INSPECTION CERTIFICATE ISSUED BY AN INDEPENDENT SURVEYOR

Charges: Issuing bank: Applicant Beneficiary Advising bank: Applicant Beneficiary

Reimbursing bank: Applicant Beneficiary Negotiating bank: Applicant Beneficiary
Discount charges if any: Applicant Beneficiary

Special instructions to be included in the letter of credit: shipment required in 2 lots shipped 2 weeks apart

Documents to be presented to place of expiry within 21 days of date of shipment as noted on transport document.

Special instructions:
________________________________________________________________________________________________

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – In-Basket

APPLICANT’S AGREEMENT AND SIGNATURE:

_______________________________________________________ _________________________________________
Applicant Authorized signature

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