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Terms in this set (60)
1. The vendor may un the isk of accepting the following fo ms of payment:
Cash in advance
I revocable letter of credit
Bank collection time draft
1A time draft signed and stamped by a merchant is:
Banke 's acceptance
Bank collection sight draft
1. An air waybill has functions as:
Document of title
Contract of carriage
Shippe 's receipt of goods
B and C
revocable letters of credit:
Can be amended by the issuing bank with agreement of pa ties to sale contract
Cannot be amended
Can be canceled before the expi y date without agreement of all pa ties to the credit
Cannot be canceled without the agreement of the confi ming and issuing bank
The beneficia y is allowed to receive an advance on the letter of credit before presentation of the necessa y documents. This type of financing is:
Transferable letter of credit
Red clause credit
Discrepancies that can be corrected by a w itten waiver from the buyer are:
1. In documenta y collection, the isk of nonpayment is higher in the case of:
Sight draft, documents against payment
Sight draft, documents against acceptance
Time draft, documents against acceptance
Time draft, documents against payment
1. Some proactive measures can be applied to avoid fraud in documenta y credits. Choose the inco rect one:
Ve ify the background and credibility of your pa tner
Seller to choose FOB trade te m rather the CIF in a sales contract
Check the validity of the letter of credit as well as the credibility of the issuing bank.
Banks can unde take an investigation into the validity, genuineness or accuracy of the documents before payment
1. In the case that the seller breaches a sales or se vice contract, a bank's guarantee to the beneficia y (buyer) that a pa ticular amount of money would be paid to the beneficia y is:
Pe fo mance bond
Standby letter of credit
1. In letters of credit, the buyer pays the issuing bank on or before the draft matu ity date.
11. Counte trade is negatively co related with a count y's level of expo ts but positively co related with a count y's level of indebtedness.
11. Examples of counter trade include which of the following?
Indonesia negotiated for a power station project with Asea Brown Bove i and for an air traffic control system with Hughes Aircraft .
Counterpurchase obligations were to be 100 percent of the FOB values.
Lockheed Ma tin agreed to sell F 16 milita y aircraft to Hunga y in exchange for large investment and counterpurchase commitments. The fi m agreed to sell $250 million(U.S.) wo th of Ame ican goods.
D Taiwan purchased 60 Mirage 2000 5 from a French aviation company, Dussault. In retu n, Dussault unde took a joint venture with Taiwan's aerospace company, Chenfeng, for the production of key aircraft pa ts and components for local aircraft and expo t.
13. Which of the following is not a benefit of counte trade for buyers?
Transfer of technology
Alleviating balance of payments difficulties
Increased sales oppo tunities
Market access and maintenance of stable p ices
13. Which of the following statements is false?
Counte trade generates additional sales that would not othe wise be possible. It also enables ent y into difficult markets.
Counte trade provides expo ters access to a continuous supply of production components, precious raw mate ials, or other natural resources in retu n for sales of manufactured goods or technology.
Counte trade enables the expo ter to adjust the p ice of a product in exchange for underp iced commodities.
Counte trade is estimated to account for 20 to 30 percent of world trade.
13. What type of an a rangement allows two gove nments to agree to purchase a ce tain volume of each othe 's goods and/or se vices over a ce tain pe iod of time, usually a year?
Clea ing a rangement
13. Identify the transaction that best fits these examples: A Japanese company expo ts computer chip processing and design technology to Korea, Singapore, and Taiwan, with a promise to purchase a ce tain percentage of the output over a given pe iod of time. Levi Strauss transfers its know-how and trademark to a Hunga ian fi m for the production and sale of its products, with an agreement to purchase and market the output in Weste n Europe.
Clea ing a rangement
Simple ba ter
13. In.................. , a company sells goods and/or se vices to an impo ter with the promise to buy unrelated things from the impo ter or other companies in the impo ting count y.
13. This type of deal allows a foreign gove nment or producer to obtain the technical data needed to manufacture all or a po tion of a piece of machine y or component that o iginated in the expo ting nation. It is often based on a gove nment-to-gove nment agreement. It might contain a licensed gove nment-to-gove nment production.
Technology transfer production
13. Which of the following is a conce n of the WTO with regard to counte trade?
Counte trade represents a significant depa ture from the p inciples of free trade based on comparative advantage.
Counte trade results in higher transaction costs.
Counte trade is inconsistent with the national treatment standard which is embodied in most trade agreements.
D All of the above
20. What is the U.S. policy toward counte trade?
It prohibits federal agencies from promoting counte trade in their business or official contracts.
It adopts a hands-off approach toward those a rangements that do not involve the U.S. gove nment or that are pursued by p ivate pa ties.
It provides special accommodations for cases involving such transactions.
A and B
20. The objectives of expo t controls are:
national secu ity and nonproliferation of weapons of mass dest uction prevention of excessive draining of scarce natural resources
fu ther the foreign policy objectives of the United States, that is, human ights, regional stability and antite ro ism All of the above
20. Expo t controls cover following areas: Technology expo ts from the United States
Re-expo ts by any pa ty of commodities, software, or technology expo ted from the United States
U.S. fi ms or individuals from expo ting foreign-o igin items or from providing se vices that may cont ibute to the proliferation of weapons of mass dest uction
All of the above
20. ELAIN Expo t License Application and Info mation Network) is a compute ized method for filing shippe 's expo t declarations.
20. STELA System for tracking Expo t License Applications) is an automated voice response system that provides applicants with the status of their license and product classification applications.
T T ue
25. Some exceptions to the antiboycott prohibitions include which of the following?
Compliance with impo t requirements of a boycotting count y
Compliance with a boycotting count y's requirements regarding shipment and trans-shipment of expo ts
Compliance with immigration, passpo t, visa, employment, and local requirements of a boycotting count y
All of the above
25. According to Foreign Co upt Practices Act, payments are not considered co upt if:
They are lawful under the laws of the foreign count y.
The money was spent as pa t of demonstrating a product or pe fo ming a contractual obligation.
B ibe y of foreign officials by U.S. individuals and corporations to obtain or retain a business
A and B
25. Institutions that enforce U.S. antit ust laws:
The Depa tment of Justice initiates civil or c iminal suits against alleged violators.
The Federal Trade Commission initiates only civil cases.
A and B
None of the above
25. $2 million for corporations and/or a maximum of five years imp isonment are penalties for officers, directors, or employees who commit willful violations of the FCPA.
25. Anti t ust law's c iminal penalties are fines up to $100,000 and imp isonment for up to three years for individuals and up to $1 million for corporations.
25. The Foreign Trade Antitrust Improvements Act FTAIA2000 limits the application of the She man Act to trade with foreign nations in case such conduct has a direct, substantial and reasonably foreseeable effect on domestic trade or commerce.
25. All goods impo ted into the United States are subject to duty or duty-free ent y, depending on their classification under the applicable ta iff schedule and their count y of o igin.
25. Trade inte media ies and se vices include customs brokers, free-trade zones, indust ial zones and bonded warehouses.
25. Bonded warehouses are secured, nongove nmental-approved warehouse facilities in which expo ted goods are stored or manipulated with payment of duty until they are removed and entered for consumption.
25. Which of the following are the three different methods used to levy ta iffs on dutiable products?
Ad valorem duty, specific duty, and merchandise duty
Ad valorem duty, specific duty, and se vices duty
Ad valorem duty, specific duty, and compound duty None of the above
25. Aerospace products, live animals and animal products, beverages, chemicals, combustibles, cosmetics, and d ugs are among the few products or product catego ies that ?
Have numerous impo t rest ictions
Are subject to ce tain rest ictions or requirements
Are generally prohibited
A and B
25. Under the GSP system, impo ts from eligible count ies are subject to ta iff exemptions or reductions if:
The merchandise is destined to the United States without contingency for diversion at the time of expo tation
The cost or value of mate ials produced in the beneficia y count y and/or the direct cost of processing pe fo med is no less than 45 percent of the appraised value of the goods
The UN ce tificate of o igin is prepared and signed by the expo ter and filed with the ent y of the goods
A and C
25. In order to receive the CBI duty-free treatment, the merchandise must be wholly produced or substantially transfo med in the beneficia y count y and meet the ................percent valueadded requirement similar to the GSP scheme.
25. Which of the following is not a duty or responsibility of customs brokers?
Record of transactions
Diligence in co responding and paying monies
Proper filing of info mation
Provide banking mate ials on all impo t related items
25. Free Trade Zones FTZs) are operated as ...............utilities under the supe vision of the FTZ Board, which is autho ized to grant the p ivilege of establishing a zone.
25. Economic advantages of FTZs include which of the following?
Merchandise admitted into the zone is subject to pa tial customs duty until it is admitted into the customs te ito y.
Businesses can expo t a product subject to a high rate of duty and manipulate and manufacture it into a final product that is classified under a low rate of duty when impo ted into the customs te ito y.
Merchandise may be remarked but not reconditioned to confo m to ce tain requirements for ent y.
Duties are paid on the pa tial quantity of such foreign goods incorporated in merchandise transfe red from the customs te ito y into the zone of ent y.
25. Although the large gap between the ich and poor in count ies throughout the world, today's consumers tend to be quality/brand name conscious, and are willing to pay a higher p ice for good quality products.
25. Larger count ies (in te ms of population) impo t manufactured goods more frequently on a per capita basis because they tend to have a less diversified indust ial base.
25. Selection of the supplier should also be based on the integ ity of the product, which includes the assumptions that the impo ter does not violate any intellectual prope ty ights registered in the count y.
25. Trade shows provide impo ters with the following advantages:
A va iety of products to buy
Oppo tunities for personal contact
Info mation on competitors
All of the above
25. Which of the following other factors might have an impact on impo t levels, according to economic theo y?
P ice of impo ts, exchange rate, and p ice of inte national goods relative to expo ts
P ice of impo ts and exchange rate only
P ice of impo ts and p ice inte national goods relative to expo ts
P ice of impo ts, exchange rate, and p ice of domestic goods relative to impo ts
25. Which of the following does not play a significant role in choosing an overseas supplier?
Expo ter-freight fo warder relationships
25. Which elements are deemed c ucial while choosing the best supplier?
Protection of IPRs
Delive y time
Impo t duty implications
All of the above
25. Final selection of supplier is not based on: Inte national knowledge and expe ience of supplier
Supplie 's willingness to devote sufficient time to develop the product
Supplie 's willingness to provide training Reputation of supplier
25. Which of the following mistakes are potential impo ters likely to make?
Ability to develop an approp iate p ice st ucture
Insufficient knowledge of the market
Invest sufficient time and effo t to develop the business Sufficient working
25. Three major markets for impo ted goods in the United States are mass markets, trendy market and regular retailers. Among them, trendy market is ideal for new impo ters thanks to limited competition.
25. Liquidation is the first step in the asce tainment of the duties and drawback acc uing on an ent y by customs.
25. Impo t ent y is the act of filing the necessa y documentation with customs to secure release of impo ted merchandise.
25. Ent y documents generally consist of which of the following procedures?
An ent y manifest Fo m 7533 or application and special pe mit for immediate delive y
A commercial invoice
A packing list
All of the above
25. Identify the type of ent y: Under ce tain circumstances, such as if the impo ted mate ial is expo ted in the same condition as when impo ted or if the impo ted goods are used in the manufactu ing process and expo ted within five years of the date of impo tation, a refund of 99 percent of all customs duties is pe mitted.
Ent y for warehouse
Refund ent y
Drawback ent y
Tempora y impo tation under bond
25. Liquidation is required for all ent ies of impo ted merchandise with exception of which of the following?
Tempora y impo tation bond ent y
Transpo tation in bond
Impo ts subject to immediate expo tation
All of the above
25. Tempora y Impo tation Under Bond is used when ce tain types of goods that are not impo ted for sale (or sale on approval) are admitted without payment of duty, under bond.
25. The liquidation procedure involves dete mination of the value of impo ts, asce tainment of their classification and applicable rate of duty, and the computation of the final amount of duty to be paid. Expo ters will then establish whether any additional (excess) duty has to be paid (refunded) to the impo ter as the case may be and notify the impo ter, consignee, or agent of the liquidation by posting a public notice.
25. Transaction value is the p ice actually paid or payable for impo ted merchandise, excluding inte national freight, insurance and other CIF charges.
25. This method sta ts with the costs of mate ials, labor, and overheads in producing the impo ted goods. Customs then adds profits and general expenses incu red by the producer.
25. Which of the following is a major benefit of adopting the HTSUS?
The HTSUS will be in line with the ta iff dete mination procedures of most count ies of the world.
It facilitates the shipment and documentation of merchandise into the United States and creates a unifo m and familiar system for U.S. expo ters shipping to other count ies.
Such unifo mity in classification and coding across count ies simplifies the conduct of inte national trade negotiations and increases the accuracy of inte national trade statistics.
All of the above.
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