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

A confirmed, irrevocable letter of credit provides the highest payment security because the U.S. confirming bank adds its own payment guarantee on top of the foreign issuing bank's commitment.

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

Under EXW, the seller's responsibility ends the moment goods are made available at their premises; the buyer assumes all costs and risks from that point, including export customs clearance and freight.

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

A Certificate of Origin identifies where goods were produced, allowing customs authorities to apply correct tariff rates and determine eligibility for preferential treatment under free trade agreements.

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

The Bureau of Industry and Security (BIS), part of the Department of Commerce, administers the EAR and issues export licenses for dual-use goods and technologies with both commercial and potential military applications.

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

The FCPA makes it illegal for U.S. companies and individuals to offer or pay anything of value to foreign government officials in order to gain or keep business advantages abroad.

(SBA) Small Business Administration Certified Business Practice Test

(SBA) Small Business Administration Certified Business Practice Test

SBA SBA Export Assistance & International Trade 3