LIBF Level 4 Certificate for Documentary Credit

®
Specialists (CDCS ) – 601/1159/8

Session code: Specimen paper A

Length of examination: 3 hours 15 minutes
__________________________________________________________________________

Simulation Exercises 1–3

Applicable current ICC rules apply throughout.

Instructions to candidates

1. You can print this document out before answering the Specimen Paper B questions. Please
note: Specimen Paper B is only available in an electronic format.
2. The simulation documents will also be available within the specimen paper itself.

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 – Simulation

SIMULATION 1
MT700

INCOMING SWIFT MT700

FROM ISSUING BANK MERHABA BANK, ISTANBUL, TURKEY

TO ADVISING BANK ACB BANK, ROTTERDAM, THE NETHERLANDS

27: SEQUENCE OF TOTAL 1/1

40A: FORM OF DOCUMENTARY CREDIT IRREVOCABLE

20: DOCUMENTARY CREDIT NUMBER 2003.AC.100

31C: DATE OF ISSUE 07 MAY XXXX

40E: APPLICABLE RULES UCPURR LATEST VERSION

31D: DATE AND PLACE OF EXPIRY 01 JULY XXXX, ROTTERDAM, THE NETHERLANDS

50: APPLICANT FACTORING A.S. ISTANBUL, TURKEY

59: BENEFICIARY DE GRAFF MACHINES B.V.

HAARLEM, THE NETHERLANDS

32: CURRENCY AND AMOUNT EUR180,000.

41A: AVAILABLE WITH/BY ACB BANK, ROTTERDAM

BY DEF PAYMENT

42P: DEFERRED PAYMENT DETAILS 180 DAYS FROM CMR DATE

43P: PARTIAL SHIPMENTS NOT ALLOWED

43T: TRANSHIPMENT NOT ALLOWED

44A: ON BOARD/DISP/TAKING CHARGE HAARLEM, THE NETHERLANDS

44B: FOR TRANSPORTATION TO HALKALI FREE ZONE, ISTANBUL, TURKEY,

BY TRUCK

44D: SHIPMENT PERIOD DURING MIDDLE OF JUNE XXXX

45A: DESCRIPTION OF GOODS AND/OR 1 UNIT ''DE GRAFF'' BRAND ROTARY CUTTING
SERVICES MACHINE , TYPE 500, WITH ALL NECESSARY
SPARE PARTS
CUSTOMS TARIFF NUMBER 8462.8000

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

DELIVERY TERMS CIP HALKALI FREE ZONE,

ISTANBUL, TURKEY

46A: DOCUMENTS REQUIRED +SIGNED COMMERCIAL INVOICE IN 3 FOLD INDICATING

THE SERIAL NUMBER OF THE MACHINE AND
CERTIFYING THAT THE MACHINE IS NEW AND NOT
USED BEFORE.
+ORIGINAL CMR TRANSPORT DOCUMENT
CONSIGNED TO THE ORDER OF FACTORING A.S.,
ISTANBUL, TURKEY AND MARKED FREIGHT PREPAID.

47A: ADDITIONAL CONDITIONS DOCUMENTS ISSUED PRIOR TO THE ISSUE DATE

OF THIS DOCUMENTARY CREDIT ARE NOT
ACCEPTABLE.
ALL DOCUMENTS MUST SHOW THE NUMBER OF
THIS DOCUMENTARY CREDIT.
GOODS MUST BE OF DUTCH ORIGIN

71B: CHARGES ALL BANKING CHARGES AND COMMISSIONS ARE FOR

ACCOUNT OF APPLICANT.

48: PERIOD FOR PRESENTATION 10 DAYS

49: CONFIRMATION INSTRUCTIONS CONFIRM

78: INSTR TO PAYG/ACCPTG/NEGOTG BANK WE SHALL REIMBURSE YOU ON THE MATURITY DATE
IN ACCORDANCE WITH YOUR INSTRUCTIONS
PROVIDED THAT DOCUMENTS IN STRICT CONFORMITY
WITH THE TERMS AND CONDITIONS OF THIS DOCU-
MENTARY CREDIT ARE DULY PRESENTED AT YOUR
COUNTERS.

72: SENDER TO RECEIVER INFORMATION PLEASE ACKNOWLEDGE RECEIPT BY SWIFT MT730.

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

Commercial invoice

DE GRAFF MACHINES B.V.

SPAARNE 1000 Tel: **31(0)235999999
1000 VC HAARLEM Fax: **31(0)235888888
THE NETHERLANDS

COMMERCIAL INVOICE nr. 987

TO:
FACTORING A.S. ORIGINAL
1, BAHAR SOKAK
ISTANBUL, TURKEY

Haarlem, 21 June XXXX

DESCRIPTION OF GOODS:

1 UNIT "DE GRAFF" BRAND ROTARY CUTTING MACHINE

TYPE 500

SERIAL NUMBER 2003

CUSTOMS TARIFF NUMBER 8462.8000

COMPLETE WITH ALL NECESSARY SPARE PARTS

INCLUDING A SET OF FREE ADVERTISING AND PROMOTION MATERIAL

WE CERTIFY THAT THE MACHINE IS BRAND NEW AND WAS NOT USED BEFORE

PRICE:
ROTARY CUTTING MACHINE EUR 180,000
SPARE PARTS EUR 20,000
TOTAL CIP HALKALI FREE ZONE, ISTANBUL EUR 200,000

Marks: 2003 pallet numbers 1/5 - 5/5 Total 5 pallets.

Documentary Credit no. 2003.AC.100

For and on behalf of
DE GRAFF MACHINES B.V.
B. de Graff

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

Original for shipper (sender)

1 Sender (Name, Address, Country) CMR

DE GRAFF MACHINES B.V. INTERNATIONAL CONSIGNMENT NOTE
SPAARNE 1000 This transport is, unless otherwise specified,
1000 VC HAARLEM subject to the Convention on the Contract
for the International Carriage of Goods by
THE NETHERLANDS Road (CMR)
2 consignee 16 carrier (Name, Address, Country)
FACTORING A.S. WINDMILL TRANSPORT B.V
1, BAHAR SOKAK RAAKS 2000
ISTANBUL, TURKEY 1000 VK HAARLEM. The Netherlands

3 Place of delivery of the goods 17 consecutive carrier

Place HALKALI FREE ZONE, ISTANBUL

Country TURKEY
4 Place and date of taking in charge of the goods 18 reserves and remarks by the carrier
Place HAARLEM
CMR nr. 100

Country THE NETHERLANDS

Date 9 JUNE XXXX
5 Documents enclosed
6 marks & numbers 7 number of packages 8 packing type 9 Goods description 10 statistic number

1 UNIT '"DE GRAFF" BRAND ROTARY CUTTING MACHINE

TYPE 500 SERIAL NUMBER 2003 11 gross weight
Marks:2003 pallet numbers 1/5 -4/5 10,000 kg
4 wooden pallets Documentary Credit number: 12 volume
2003.AC.100 10 cbm
13 Instructions by the carrier 19 freight tariff and specifications
(customs formalities)

14 Reimbursement
15 Freight instructions 20 Special agreements

FREIGHT PREPAID

25 truck / lorry / vehicle details

REGISTRATION NUMBER: 51-BG-LN NATIONALITY: DUTCH

21 Place and date of issue: 24 Goods received

HAARLEM, 11 JUNE XXXX Date:
22 23
W. Mill
[D.A.F. Transport Agency B.V.]

Stamp and signature of carrier or

Stamp and signature of shipper agent Stamp and signature of consignee

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

SIMULATION 2
MT700 Issue of a Documentary Credit

Issuing Bank:
INTERCONTINENTAL PACIFIC BANK

BANGKOK
THAILAND

Form of Documentary Credit:

IRREVOCABLE TRANSFERABLE

Documentary Credit Number:

LCDC123876

Applicable Rules:
UCP LATEST VERSION

Date and Place of Expiry:

31 MARCH XXXX UK

Applicant:
SIMPLY IMPORTS LTD
BANGKOK
THAILAND

Beneficiary:
UTILITY SUPPLIERS LTD
LONDON
UK

Amount:
USD 320,000.00

Available With:
WORLDWIDE INTERNATIONAL BANK BY NEGOTIATION

DRAFTS DRAWN AT 90 DAYS SIGHT

ON ISSUING BANK

Partial Shipments:
PROHIBITED

Transhipment:
PROHIBITED

Port of Loading:
ANY EUROPEAN PORT

Port of Discharge:
BANGKOK PORT

Latest Shipment Date:

10 MARCH XXXX

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

Description of Goods:
10000 PIECES OF WOODEN CHAIRS

AT USD 32.00 PER CHAIR

AS PER ORDER NUMBER 23490/1 DATED 14 JANUARY XXXX

CIF BANGKOK PORT (INCOTERMS 2010)

Documents Required:
+ SIGNED COMMERCIAL INVOICE IN THREE COPIES ISSUED IN THE NAME OF SIMPLY IMPORTS

LTD BANGKOK
+ BILLS OF LADING ISSUED TO ORDER AND BLANK ENDORSED MARKED FREIGHT PAID AND

NOTIFY APPLICANT
+ INSURANCE POLICY/CERTIFICATE FOR CIF VALUE OF THE GOODS PLUS 10 PERCENT

COVERING ALL RISKS

+ PACKING LIST EVIDENCING GOODS PACKED IN WOODEN PALLETS

Charges:
ALL BANK CHARGES ARE FOR THE APPLICANT'S ACCOUNT

Confirmation:
CONFIRM

Instructions to the Negotiating Bank:

WE HEREBY ENGAGE TO PAY DOCUMENTS DRAWN IN ACCORDANCE WITH THE CREDIT

TERMS.
ALL DOCUMENTS TO BE SENT IN TWO MAILS BY COURIER TO OUR DOCUMENTARY
PROCESSING
AREA, RANGOON ROAD, AREA 32, BANGKOK THAILAND.

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

APPLICATION FOR TRANSFER OF A LETTER OF

CREDIT

Please effect a transfer under

Documentary Credit Number Issued by
LCDC123876 Intercontinental Pacific Bank

on the following terms

Second Beneficiary Name and

Address Second Beneficiary Bank Details
Natural Wood Furniture Suppliers
GmbH Deutsche Arbeit Bank A.G.
15 Ringstrasse Frankfurt
Frankfurt SWIFT ADDRESS: DEAR DE FF XXX
D -5378 Account Number: 563428-006

Amount to be transferred
USD120,000.00

Expiry Date Latest Shipment Date Presentation Period

20 March XXXX 10 March XXXX 10 days

Quantity of Goods to be supplied by Second Beneficiary

All of the goods covered by the original credit (tick) or the following goods
5,000 WOODEN
CHAIRS
Unit price (if stated in original credit) USD24.00
Insurance Cover
If the original credit requires insurance, please indicate
percentage over invoice value cover is required for 10%

Substitution of Applicant Name

Our name is to be substituted for that of the original credit applicant (tick) 
or
Our name is not to be substituted for that of the original credit applicant (tick)

Amendments
Amendments to the original credit may only be advised to the second
beneficiary with our express agreement (tick) 
or
Amendments to the original credit may be advised to the second beneficiary
without prior referral to ourselves
(tick)

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

Additional Information/Instructions

Our order number D-5634 to be quoted on commercial invoice.

Place of expiry for transfer : Germany
Transfer credit to be advised on unconfirmed basis
Please see separate transfer application form for transfer of goods balance to Italian
Foresters Spa

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

SIMULATION 3

Irrevocable documentary credit application form

Applicant: Issuing bank:

Savage Steel plc ABC Bank plc
Tilton Road London
Birmingham England
England

Date of Application: 1 March XX Expiry Date and Place for Presentation of

documents
 Issue by (air) Mail  with brief advice by Expiry Date: 05 June XX
teletransmission
Place for Presentation: Pittsburgh
 Issue by teletransmission Beneficiary: Kirovski Steel Supplies
Pittsburgh
 Transferable Credit Pennsylvania USA
Confirmation of the Credit: Amount in figures and words
 not requested  requested About USD 120,000.00
 authorised if requested by Beneficiary Dollars one hundred and twenty thousand

Partial shipments  allowed  not allowed Credit available with Nominated Bank:
ABC Bank, London
 by payment at sight
Transhipments  allowed  not allowed  by deferred payment at:
 by acceptance of drafts at:
 Insurance will be covered by us  by negotiation

Shipment From: Newark, New Jersey Against the documents detailed herein:
For transportation to: Southampton, England  and Beneficiary’s drafts(s) drawn on: ABC
Bank, London
Not later than: 15 May XX
Goods (Brief description without excessive details): INCOTERMS
1,200m at USD 100 per m  EXW  FCA  FAS  FOB
Details of goods as per your previous Letter of Credit ref  CFR  CPT  CIF  CIP
DC 731264 dated 10 January XX (copy attached)  DAP  DAT  DDP
 Other (please
specify)

 Commercial invoice in [ 1 ] original and [ 3 ] copies

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

Transport Document: (select only one below) marked  freight paid or  freight collect

 Full set [or ] clean on board Marine Bills of Lading either  issued to order and blank
endorsed or  issued to the order of the party below or  showing consignee as the party below.

 Full set [or ] Multimodal Transport Document either  issued to order and blank
endorsed or  issued to the order of the party below or  showing consignee as the party below.

 Non-negotiable Sea Waybill showing consignee as the party below.

 Air Transport Document showing consignee as the party below.

 Road Transport Document showing consignee as the party below.

Order Party/Consignee (if appropriate):

Notify Party (complete only if required): Savage Steel plc, Tilton Road, Birmingham, England

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 Principles and Practices of Documentary Credit Transactions Specimen Paper A – Simulation

Insurance Document (not applicable if insurance is to be covered by the applicant)

 Policy or  Certificate (select one) in negotiable form for invoice value plus a minimum of [ ]
covering the following risks:

All Risks excluding surface rust

Other Documents: (select as applicable)

 Packing List in [ 1 ] original and [ 3 ] copies

 Weight List in [ 1 ] original and [ 3 ] copies
 Certificate of [ USA ] Origin in [ 1 ] original and [ 3 ] copies
 Inspection Certificate in [ 1 ] original and [ 3 ] copies
 Health Certificate in [ 1 ] original and [ 3 ] copies

Additional Documents: (detail as applicable)



Documents to be presented within [ ] days of shipment.

(if left blank, default presentation period of 21 days after shipment will apply)

Additional Instructions: We request you to issue on our behalf and for

One original transport document to be sent direct to: our account your Irrevocable Credit in
Savage Steel plc accordance with the above instructions
Tilton Road (marked (x) where appropriate). This Credit will
Birmingham be subject to the Uniform Customs and
England Practice for Documentary credits (2007)
Revision Publication No. 600 of the
Inspection certificate to be issued and signed by an International Chamber of Commerce, Paris,
independent inspection agency. France), insofar as they are applicable.

R SAVAGE R Savage________
Name and signature of the Applicant

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