Free Online Course in International Business

Knowledge Statement

Knowledge of International Regulations Published by the International Chamber of Commerce (Paris) Governing International Transactions and Methods of Payment:  Incoterms, UCP, arbitration, Uniform Rules for Collection

Activities

Activity 1

Using the Incoterms Circle Chart, choose an Incoterm for a transaction.

·        Identify the responsibilities for the buyer and seller

·        Identify the risks to the buyer and seller

Activity 2

Choose a method of payment as discussed in Task 1 and an Incoterm.

·        Identify the responsibilities for the buyer and seller

·        Identify the risks to the buyer and seller

·        Determine if your choice is the best combination of Incoterm and method of payment

·        Determine what could be a better or worse choice

Assessment

1.                     Many international business regulation are created by the

a.      Association of Freight Forwarders.

b.      buyer’s local government.

c.       the International Chamber of Commerce.

d.      US Department of Commerce.

2.                     The Incoterms were created to clearly define

a.      the best method of shipping an order from the seller to the buyer.

b.      when ownership of merchandise passes from the seller to the buyer.

c.       the least risky method of payment the seller should quote the buyer.

d.      how funds will be transferred from the buyer to the seller.

3.                     The UCP which defines the rights and obligations of banks and businesses involved in documentary transactions is considered  

a.      a legal and binding document.

b.      contractual law by the governments.

c.       flexible and adaptable to each transaction.

d.      a guideline for practices.

4.                     The goal of the WTO is to help

a.      governments maintain control over business.

b.      importers and exporters conduct their business.

c.       smaller companies succeed in international business.

d.      big companies maintain dominance in international business.

(Correct answers: 1=c, 2=b, 3=d, 4=b)