CE Trade Documentation & Payment Methods 3

Question 1

A U.S. exporter sells chemical intermediates to a German buyer. Which document certifies that the goods meet the importing country's standards or the buyer's regulatory requirements?

Accepted Answer

Certificate of conformity (or inspection certificate)

Answer

A certificate of conformity or inspection certificate, often issued by a third-party inspection agency, confirms the goods meet specified technical or regulatory standards.

Question 2

Which payment method provides an exporter with the LEAST risk but may make the exporter LEAST competitive in markets where buyers prefer extended terms?

Accepted Answer

Cash in advance (prepayment)

Answer

Cash in advance eliminates credit risk for the exporter entirely, but places all risk on the buyer and can deter buyers who can obtain better terms from competitors.

Question 3

An airway bill (AWB) differs from an ocean bill of lading in that the AWB is:

Accepted Answer

A non-negotiable receipt and contract of carriage that cannot transfer title

Answer

Unlike an ocean B/L, an airway bill is always non-negotiable — it names the consignee and cannot be used to transfer title to goods in transit.

Question 4

Export credit insurance provided by EXIM Bank primarily helps U.S. exporters by:

Accepted Answer

Protecting against non-payment by foreign buyers due to commercial or political risk

Answer

EXIM Bank's export credit insurance covers the exporter against losses from buyer default (commercial risk) and events like war or currency inconvertibility (political risk).

Question 5

On a commercial invoice for export, the 'terms of sale' field typically refers to:

Accepted Answer

The Incoterm agreed upon, defining delivery point and risk transfer

Answer

The terms of sale on a commercial invoice reference the agreed Incoterm (e.g., FOB Los Angeles, CIF Hamburg) that establishes where risk and cost responsibility transfer.

(CE) Certified Exporter Practice Test

(CE) Certified Exporter Practice Test

CE Trade Documentation & Payment Methods 3