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American Bankers Association CRCM Exam - Topic 1 Question 24 Discussion

First National Bank opened a letter of credit in favor of ABC Co., a U.S. company, for ABC's sale of goods to Country X, a foreign country that participates in a boycott. The letter of credit contains no boycott provisions, but First National Bank knows that ABC Co. has agreed to supply a certification to Country X that ABC has not dealt with any blacklisted firms as a condition of receiving the letter of credit in its favor. What should First National Bank do?
C) Not implement the letter of credit
A) Implement the letter of credit because there is no boycott language on its face
B) Require ABC to indemnify the bank against any potential loss for participation in a boycott
D) Have the letter of credit confirmed by a bank in Country X

American Bankers Association CRCM Exam - Topic 1 Question 24 Discussion

Actual exam question for American Bankers Association's CRCM exam
Question #: 24
Topic #: 1
[All CRCM Questions]

First National Bank opened a letter of credit in favor of ABC Co., a U.S. company, for ABC's sale of goods to Country X, a foreign country that participates in a boycott. The letter of credit contains no boycott provisions, but First National Bank knows that ABC Co. has agreed to supply a certification to Country X that ABC has not dealt with any blacklisted firms as a condition of receiving the letter of credit in its favor. What should First National Bank do?

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Suggested Answer: C

by Eun at May 09, 2022, 04:44 AM

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Ruth
8 months ago
Sounds fishy, how can they be sure ABC isn't lying?
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Jess
9 months ago
Requiring indemnity seems smart to me.
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Lang
9 months ago
Wait, so they can just ignore the certification?
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Tequila
9 months ago
I disagree, they should not risk it.
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Darell
9 months ago
Implement the letter of credit, no boycott language!
upvoted 0 times
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Myong
9 months ago
Ugh, I hate these drug schedule questions. They're always so confusing. I'll just have to guess on this one.
upvoted 0 times
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Salome
10 months ago
I think the translation of inside source addresses is related to option A, but I'm not entirely sure about the subnet specifics.
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