Sandbox: Trade Finance Terminal
Session 4: Validating 24 LC Scenarios
1. The Banking Axiom
You ship perfect copper, but misspell the buyer's name on the invoice.
2. The Toxic Clause (Field 46A)
Field 46A demands a "Quality Certificate signed by the Buyer."
3. The Stale Presentation (Field 48)
Field 48 gives you 7 days to present documents after shipping.
4. The Spelling Trap (Field 45A)
Field 45A spells it "Copper Cathodes". Your invoice says "Copper Cathode".
5. Late Shipment (Field 44C)
Latest shipment is May 15. The ship breaks down and loads on May 16.
6. Expiry Date (Field 31D)
The LC expires today. You haven't shipped the goods yet.
7. Confirmation Instructions (Field 49)
You are selling to an unstable emerging market.
8. Bank Review Time (Article 14)
You presented perfect documents 10 days ago. The bank hasn't paid.
9. The Discrepancy Waiver
The bank finds a typo. They ask the buyer for a waiver.
10. Non-Documentary Conditions
The LC states: "Goods must be packed in blue boxes" but doesn't ask for a packing list.
11. Clean Transport Documents
The B/L contains a clause: "Packaging slightly damp."
12. The Amendment Execution
The buyer promises to amend a toxic clause next week.
13. The Middleman's Capital
You have a $9M order from Germany but no cash to pay Africa.
14. Transferable LCs (Bypass Risk)
You transfer your LC to the African supplier.
15. Back-to-Back Secrecy
Why use a Back-to-Back LC instead of transferring?
16. Document Substitution
The African supplier submits an invoice for $8M.
17. Timing Mismatch (The Fragility)
The Master LC expires May 30. When should the Baby LC expire?
18. Bank Performance Risk
Why do banks hate issuing Back-to-Back LCs?
19. Field 40A Requirement
You want to execute a Transferable LC.
20. Allowed Variables (Article 38)
When transferring an LC, can you change the required documents?
21. The Pro-Forma Review
The buyer wants to issue the $9M LC immediately.
22. The Insurance Mismatch
Master LC requires insurance for 110% of $9M. Baby LC is for $8M.
23. Partial Shipments (Field 43P)
You want to transfer the LC to three different suppliers.
24. The Middleman's True Value
Why does the German factory buy from Kamal instead of Africa directly?