Problem:
Trade finance is much facilitated by banks’ intervention as guarantors for execution of financial commitments on behalf of importers. Banks provide a large variety of trade finance products and services and they ensure that trade contracts are properly implemented through verification of documents of trade.
Required:
Question1. Illustrate out the following terms employed in Trade Finance:
(i) Clean bill of exchange
(ii) Incoterms
(iii) Acceptance pour aval
(iv) UCP 600
Question2. Measure how ‘incoterms’ affect the documents which exporters must produce.
Question3. Discuss and illustrate out the different functions of a bill of lading.
Question4. Under the Article 9 of the UCP 600, banks have to follow certain rules in relation to amendments to be brought to letters of credit. Discuss on three (3) of these rules to be followed.