SBA SBA Export Assistance & International Trade 3

Question 1

Which payment method offers a U.S. exporter the highest level of payment security when selling to an unknown foreign buyer?

Accepted Answer

Confirmed, irrevocable letter of credit issued and confirmed by a U.S. bank

Answer

Open account with net-60 payment terms

Answer

Consignment arrangement with the foreign buyer

Answer

Documentary collection (documents against payment)

Question 2

Under the INCOTERM 'Ex Works (EXW),' when does the seller fulfill their delivery obligation?

Accepted Answer

When the goods are made available at the seller's own premises for the buyer to collect

Answer

When the goods are delivered to the first carrier chosen by the buyer

Answer

When the goods clear export customs in the seller's country

Answer

When the shipping carrier issues a bill of lading for the goods

Question 3

A Certificate of Origin is required in international trade primarily to:

Accepted Answer

Establish the country of manufacture for customs duty and trade agreement benefit purposes

Answer

Guarantee payment by the foreign buyer's bank

Answer

Describe the contents and declared value of a shipment for the carrier

Answer

Certify that the goods meet the importing country's safety standards

Question 4

A U.S. small business exporting dual-use goods (items with both commercial and potential military applications) must obtain an export license from:

Accepted Answer

Bureau of Industry and Security (BIS) under the Export Administration Regulations (EAR)

Answer

U.S. Department of State under the International Traffic in Arms Regulations (ITAR)

Answer

U.S. Customs and Border Protection

Answer

Small Business Administration

Question 5

The Foreign Corrupt Practices Act (FCPA) prohibits U.S. small businesses from:

Accepted Answer

Paying bribes or improper payments to foreign government officials to obtain or retain business

Answer

Selling goods or services to countries subject to U.S. trade sanctions

Answer

Using offshore bank accounts to receive payments from international customers

Answer

Hiring foreign nationals without proper immigration work authorization

Question 6

The Harmonized System (HS) code assigned to an exported product is primarily used to:

Accepted Answer

Classify goods for customs duties, trade statistics, and import/export compliance worldwide

Answer

Identify the optimal shipping route for transporting goods to a foreign market

Answer

Track the payment schedule agreed upon between the exporter and foreign buyer

Answer

Assign individual export license numbers to each shipment of controlled goods

Question 7

When a U.S. small business exporter receives payment through a letter of credit issued by the foreign buyer's bank, this instrument primarily protects the exporter against:

Accepted Answer

Non-payment risk if the foreign buyer fails or refuses to pay

Answer

Physical loss or damage to goods during ocean or air transit

Answer

Unfavorable currency exchange rate movements between contract signing and payment

Answer

Violations of U.S. export control laws and regulations