CHAPTERS 1-15 PRACTICE EXAMINATION
CHAPTERS 1-15 PRACTICE EXAMINATION
NAME:_
True/False: 1 point each (Circle correct answer)
1. Consequential money damages for breach of a sales contract in the U.S. may also include an amount for lost profits arising as a reasonably foreseeable loss due to the breach.
a. True
b. False
2. International sales contracts concerning consumer goods sold for personal use come under CISG.
a.True
b.False
3. When an international seller and buyer negotiate a sales contract, they have the option to "opt out" of CISG.
a. True
b.False
4. The CISG requires that an acceptance materially altering the terms of the offer be approved by the original offering party.
a.True
b.False
5. If a seller’s employees go on strike, is this a commercial impossibility which can be used as a valid legal excuse for not performing under a sales contract devoid of a force majeure clause?
a.True
b.False
6. To use the concept of impossibility of performance as an excuse for nonperformance of a contract requires that the performance be objectively impossible.
a.True
b.False
7. A negotiable bill of lading is proof of title allows for the transfer of the title to the goods without requiring the owner to take possession of the goods.
a.True
b.False
8. Negotiable instruments are unconditional promises to pay.
a.True
b.False
9. When a party takes a negotiable document as a good faith purchaser, it generally acquires even greater rights in the document than the one from whom it had been negotiated.
a.True
b.False
10. A straight bill of lading assures that the goods have actually been loaded on board the ship for shipment.
a.True
b.False
11.Under the Uniform Commercial Code, the risk of loss in a destination contract passes to the buyer when the goods are tendered to the buyer at its designated place of drop off..
a.True
b.False
12.Under Incoterms, a sale on terms “DDP” represents the minimum responsibility of the seller and the maximum responsibility of the buyer.
a.True
b.False
13.Under an FOB contract, the seller delivers the goods on board the ship decks and has no further transportation obligations.
a.True
b.False
14.The difference between terms “CFR” and “CIF” is that under “CIF” term of sale, the buyer must procure his own marine insurance coverage on the goods.
a.True
b.False
15.The purpose of the bill of lading is to:
a.Transfer title of the goods to the freight forwarder.
b.Prevent shipping delays.
c.Enable the seller to transfer title of the goods to the buyer and receive payment.
d.None of the above.
16.COGSA governs the liability of ocean carriers for damage to goods while the goods are held in storage warehouses at the seaport.
a.True
b.False
17.If A’s ocean cargo is thrown overboard in order to save a sinking ship and B’s cargo is saved as a result, B must contribute to A for the loss.
a.True
b.False
18. The ship Darby O departed the Port of Yokohama, Japan to deliver Toyota parts to Miami, Florida through the Panama Canal. Due civil strife within Panama, the Canal is closed due to armed conflict. The carrier is entitled to claim increased expenses as a result to traveling the long route down around the southern tip of South America (“Tierra del Fuego”) under the “perils of the sea” assertion.
a.True
b.False
19.Goods moving under a straight bill of lading may be delivered either to the consignee or to the notified party.
a. True
b. False
20.An ocean carrier is liable for its failure to use due diligence in providing a seaworthy ship at the beginning of the voyage.
a.True
b.False
21. Production sharing is intended to create U.S. jobs by encouraging the use of U.S.-made components when assembly of a product takes place in a foreign country.
a.True
b.False
22. In Samsonite Corporation v. United States, the Court ruled that the luggage handles were
assembled in Mexico and therefore not subject to duties, reversing the lower court's decision.
a.True
b.False
23.A free trade area is a group of two or more sovereign countries in which import duties and other trade barriers are reduced or eliminated.
a. True
b. False
24. NAFTA has evolved into a political union similar to the European Union because it is an economic union.
a. True
b. False
25.NAFTA members have raised tariffs on non-North American products in order to stimulate trade between the U.S., Canada, and Mexico.
a.True
b.False
26.Canada, Mexico, and the United States phased out, over a ten-year period, all tariffs on textile and apparel goods that met the North American rules of origin.
a.True
b.False
27.NAFTA sets environmental standards for all three countries that were met in 2004.
a.True
b.False
28. A customs union is a free trade area with a common external tariff.
a.True
b.False
29.For most products undergoing a transformation in North America, the rule of origin is based on its tariff classification.
a.True
b.False
30.Trademarks are not protected under NAFTA and the owner of the trademark must register with the United States, Canada, and Mexico.
a.True
b.False
31. The Commission of the European Communities v. Italian Republic involved the importation of vegetable fats labeled as “chocolate substitutes.”
a.True
b.False
32. Similar to the United States Supreme Court, decisions of the European Court of Justice are issued with the dissenting opinions of the minority ruling judges which are not open to the general public.
a.True
b.False
33. Similar to courtroom practices in the U.S., the legal proceedings in the European Court of Justice allow for the calling of witnesses, the production of documents, the hiring of experts, cross-examination, and are open to the broadcasting media for transmission to the public.
a. True
b. False
34.One of the goals of the Single European Act (SEA) was to achieve political integration by 2000.
a.True
b.False
35.National courts are obligated to follow EU law and decisions.
a.True
b.False
36.The European Court of Justice and the International Court of Justice have concurrent jurisdiction over EU member international trade disputes with non-EU members.
a.True
b.False
37.The European Union is committed to a common foreign policy and individual state sovereignty over economic issues.
a.True
b.False
38.The Four Freedoms of the EU include free movement of goods, services, capital, and people.
a.True
b.False
39. In the United States v. Golden Ship Trading case, Wu, the owner, was found not liable because she exercised due care in verifying the merchandise was manufactured in the Dominican Republic.
a.True
b.False
40.The U.S. Bureau of Customs and Border Protection is the agency charged with assessing and collecting tariffs and administering duty-free zones.
a. True
b. False
41. The owner, purchaser, or consignee of goods or a customs broker with a written power of attorney must enter goods delivered to a U.S. port of entry within five days of the arrival of the goods.
a. True
b. False
42.Customs rules and duty assessment rates are uniform throughout NAFTA.
a.True
b.False
43. The U.S. and Canada have both adopted the Harmonized Commodity Description and Coding System.
a.True
b.False
44.For purposes of assessing duties to be paid, the transaction value is the dutiable value when all import-related costs have been included in the purchase price.
a.True
b.False
45. If an importer provides tools, dies, or molds to a foreign supplier free of charge to be used in the manufacturer of the imported items, the value of these assists will not be included in transaction value.
a.True
b.False
46.Where the transaction value of merchandise cannot be determined, the U.S. Bureau of Customs and Border Protection will look to the dutiable value of identical merchandise imported under similar circumstances.
a.True
b.False
47.The country of origin is always determined by the WTO definition where the article is grown, produced, or manufactured.
a.True
b.False
48.An imported item substantially transformed in the United States by the importer before being sold to the ultimate purchaser need not be marked with a foreign country of origin.
a.True
b.False
49.Assume Article X is manufactured in Country Y. It is shipped to Country Z where it is substantially transformed before being imported into the United States for resale. For the purposes of imposing import duties under U.S. law, Article X will be considered a product of Country Z.
a.True
b.False
50. A full refund of duties paid is made when imported goods that do not conform to specifications are returned to U.S. customs within 90 days and returned to the seller under U.S. customs supervision.
a.True
b.False
51.Caribbean nations that do not cooperate with the U.S. in the enforcement of U.S. drug laws do not qualify for assistance under the Caribbean Basin Economic Recovery Act.
a.True
b.False
52.Foreign Trade Zones are free ports provided by the import trading companies to stimulate international trade by allowing the receipt of imports to be duty free.
a.True
b.False
53.In the event the importer files a protest and Customs denies the protest an appeal can be filed with any federal circuit court of appeals.
a.True
b.False
54. Customs fraud requires that the importer committed a fraudulent violation by providing information and documentation that is beyond a reasonable doubt untrue.
a.True
b.False
55.In an action to collect a customs penalty, the U.S. Treasury Department is the plaintiff and need only prove that the importer was negligent in providing misinformation.
a.True
b.False
56.In some circumstances, the presentation of research by a U.S. scientist at a convention in a foreign nation may require an export license.
a.True
b.False
57.The Department of Commerce has the responsibility for the control of nonmilitary commercial goods, commodities, and technology.
a.True
b.False
58.The current law that controls the export of goods from a U.S. manufacturer to a foreign buyer also controls the re-export of those goods beyond the boundaries of the country of the original foreign buyer.
a.True
b.False
59.“Diversion” is when controlled goods are sold by a U.S. exporter to an importer in Country A, who in turn re-exports them to a buyer in Country B, which is unfriendly with the United States.
a. True
b. False
60.Items that are not classified on the Commerce Control List may be exported without an in individual export license.
a.True
b.False
61. The U.S. export control system is conflicted: on the one hand, advocates of free trade argue for the most limited restrictions, while national security advocates press for relatively more restrictions.
a.True
b.False
62. Unilateral export controls are determined by several countries (against another or group of other countries) but enacted by only one country; multilateral export controls are determined and enacted by several countries to control the exports to another country or groups of countries.
a.True
b.False
63.The trade sanctions against the Castro government in Cuba have been successful in encouraging a more democratic style representation.
a.True
b.False
64.The U.S. anti-boycott laws are applicable to foreign affiliates of U.S. based companies.
a.True
b.False
65. A policy that is “free of particular average” is one that will not cover any partial and average losses.
a.True
b.False
66. Clean bill of lading is a carrier’s guarantee, or warranty, of the condition of the goods it has delivered.
a.True
b.False
67.Where the shipper fails to declare the value of the shipment on a clean bill of lading and the carrier has knowledge of the true value and does not advise the shipper to declare the value so, in the U.S. the carrier’s liability will be unlimited liability per package.
a.True
b.False
68. Ocean carriers are liable if cargo is damaged as a result of the ship being taken over by pirates, if the seizure or damage was foreseeable, and the carrier failed to take necessary preventive measures.
a.True
b.False
69.A consignee can prove a shortage by showing that the quantity of the cargo unloaded at the destination is less than that listed on the bill of lading.
a.True
b.False
70.Special Drawing Rights (SDRs) represent a mix of the US and Canadian Dollars, the EU Euro, and the Chinese Yen.
a.True
b.False
71.No damages were awarded under the Montreal Convention to the complaining party in Olympic Airways v. Husain.
a.True
b.False
72.The UCP is a document used in international finance which sets forth standards for issuing and processing letters of credit.
a.True
b.False
73.In order to issue letters of credit, banks must first secure appropriate inspections and certifications concerning the quality and condition of the goods.
a.True
b.False
74.The “Rule of Strict Compliance” pertains to shipping goods which conform to their description on the bill of lading.
a.True
b.False
75.A draft paid upon presentation or demand is known as a “time draft.”
a.True
b.False
76.Under the “Equal Dignity Rule,” both treaties and US legislative enactments are binding on both state and federal governments.
a.True
b.False
77.There is no “Doctrine of Preemption” at the international level as there is between US federal and state statutes.
a.True
b.False
78.A US company doing business abroad comes under the purview of both that foreign nation’s laws as well as the US Foreign Corrupt Practices Act (FCPA).
a.True
b.False
79.Under the FCPA, “grease” or “facilitation” payments are not considered violations.
a.True
b.False
80.In remand in personamjurisdiction present the same jurisdictional issues in the US.
a.True
b.False
81.US state companies which do business in US states other than the state of incorporation are known as “foreign.”
a.True
b.False
82.International trade issues cannot be litigated in US state courts.
a.True
b.False
83.Only the WTO can give MFN status to member nations.
a.True
b.False
84.A treaty binding the US can only be negotiated by the current US President.
a.True
b.False
85.The Trans-Pacific Partnership (TPP) has been adopted by the US Congress.
a.True
b.False
86.The GRI Initiative has metrics which measure a company’s performance in the areas of economics, environmental impact, and level of international trade.
a.True
b.False
87.An A+ level of GRI reporting indicates that the reporting company is both economically and environmentally stable.
a.True
b.False
88.ISO 9000 standards are similar to GRI environmental reporting standards.
a.True
b.False
89.If a company chooses a “C” level of GRI reporting, then all Core and Additional metrics/questions must be answered.
a.True
b.False
90. The GATT Escape Clause allows all member countries the ability to unilaterally, but temporarily, suspend foreign imports which are causing a market disruption to the importing country.
a.True
b.False
91.Anti-Dumping duties were lawfully imposed by the International Court of Trade in Pasquera Mares Australes v. United States.
a.True
b.False
92.GATT permits a member country to temporarily impose import quotas where it can show a balance-of-payment deficit in its outflow of foreign currency.
a.True
b.False
93. There was no justifiable “substantial transformation” of imported product found in the Ferrostal Metals
v.United Statescase.
a.True
b.False
94. Civil litigation is the primary means of settling contract disputes in the U.S. than in virtually any other country.
a.True
b.False
95.In an international dispute, where there is no choice of law and forum, the forum with the greatest interest under conflicts of law will have the jurisdiction to hear the dispute.
a. True
b. False
96. The Due Process Clause of the U.S. Constitution requires that before a company can be brought before
acourt in the U.S. it must have had minimum contacts with the forum.
a.True
b.False
97. Global sourcing is the term commonly used to describe the process by which a firm attempts to locate and purchase goods or services on a worldwide basis.
a.True
b.False
98. Customs brokers are government inspection officials who have the responsibilities of inspecting and regulating the shipment of goods and services imported into the United States.
a.True
b.False
99. Non-tariff barriers such as technical standards do not have a significant influence on how firms make their trade and investment decisions.
a.True
b.False
100. Pacta sunt servandameans that every treaty in force is binding upon the parties to it and must beperformed by them in good faith.
a.True
b.False
101. The jurisdiction of the International Court of Justice upon its members in a dispute is compulsory.
a.True
b. False
102. A court that has subject matter jurisdiction over a case also has in personam jurisdiction over the case.
a.True
b.False
103. The GATT Agreement on Technical Barriers to Trade sets minimum international standards for product performance, design, safety, or efficiency.
a.True
b. False
104. Under the “national treatment” provisions of GATT, imported products may be regulated and taxed
differently than domestic goods after they pass the border and enter a nation's stream of commerce.
a.True
b.False
105.Under GATT, charges may be imposed upon the movement of imported goods, such as port fees and inspection fees.
a.True
b.False
106.Each nation has the right to impose import schemes and customs procedures as a means to protect its citizen’s public health, safety, and morals.
a.True
b.False
107.Due to GATT's prohibition of quotas, a nation may not impose quotas to safeguard its external financial position and its balance of payments.
a.True
b.False
108. An example of the GATT/WTO dispute settlement mechanism, Apple can file a complaint against Niger’s government non-tariff barrier to limit the importation of iPads to the WTO’s Dispute Settlement Body.
a.True
b.False
109.Under the MFN rates the United States can grant lower tariff rates to a less developed country in order to stimulate economic growth.
a.True
b.False
110.The “bill of lading” is issued by the seller (exporter) directly to the buyer (importer) in order to claim the goods upon arrival at the destination port..
a.True
b.False
Multiple Choice (1 point each)
111. In Dayan v. McDonald's Corporation, the court ruled that:
a.McDonald’s quality standards were inadequate under French law.
b.The McDonald’s franchise contract was illegal under French law.
c.McDonald’s had fulfilled its responsibility to the franchisee in France under U.S. law.
d.The French do not like hamburgers.
112.International licensing agreements pertain to forms of intellectual property such as:
a.Books, songs, inventions.
b.Trademarks, copyrights, patents.
c.Real estate, personal property.
d.Contracts.
113.International business may be classified into which of the following three categories:
a.Trade, import/export, foreign exchange.
b.International licensing agreements, investments, law.
c.Trade, international licensing agreements, investment.
d.International licensing agreements, trade, franchising.
114.In the case In re Union Carbide Corporation Gas Plant Disaster at Bhopal, the U.S. court ruled:
a.That Union Carbide was criminally responsible for the deaths at the Indian plant.
b.That Union Carbide was liable to the plaintiffs under Indian law.
c.That Union Carbide was not responsible for the negligent acts of its subsidiary in India.
d.That the case brought in U.S. courts should be transferred to the courts of India.
115.The Organization for Economic Cooperation and Development (OECD) has developed:
a. Codes of conduct for companies and host countries in an attempt to set ethical standards for both.
b.Guidelines for interest rates to be charged multinational enterprises.
c.Codes of conduct for employee practices for multinational corporations.
d.None of the above.
116.In which of the following courts would a trial for violation of the Foreign Corrupt Practices Act be held?
a.state probate court
b. federal district court
c.U.S. Supreme Court
d.none of the above
e.both B and C.
117.Which of the following statements regarding the 1994 Agreement on Technical Barriers to Trade is false?
a.All technical regulations shall be applied on a nondiscriminatory basis, without regard to the national origin of the products.
b.Disputes between countries may be referred to the WTO for negotiation and settlement.
c.Whenever possible, product requirements should be based on the design and descriptive characteristics of a product, rather that its performance.
d.Proposed standards must be published and made available to foreign countries.
e.All of the above are true.
118.The WTO Agreement on Government Procurement (1994):
a. Requires fair, open, and nondiscriminatory procurement practices.
b.Sets up uniform procurement procedures to protect suppliers from different countries.
c.Applies only to those countries who have signed it.
d.Applies to the purchase of goods and services over $182,000.
e.All of the above.
119.Which of the following is not an instance in which the U.S. Trade Representative may take retaliatory action against a foreign country?
a.The foreign country's policies violate the legal rights of the U.S. and restrict U.S. commerce.
b.The foreign government permits forced labor.
c.The foreign government's policies are unreasonable or discriminatory and burden or restrict
U.S. trade or foreign investment.
d. None of the above is discretionary; rather, retaliation by the U.S. Trade Representative is mandatory in all three instances.
120. ISO 14000 refers to:
a.Standards used for assuring product quality through design and manufacturing process.
b.Guidelines in environmental management and labeling.
c.European Union import regulations.
d.A trade agreement between the U.S. and EU designed to reduce barriers to trade.
121. A law or regulation affecting a product's characteristics that must be met before a product can enter a country is a:
a.Product standard.
b.Technical regulation.
c.Product limitation.
d.Government procurement law.
122. In the United States, technical regulations and product standards can be set by:
a.The Department of Agriculture.
b.The Consumer Product Safety Commission.
c.The Food and Drug Administration.
d.The Department of Transportation.
e.All of the above.
123. Under Section 301, the United States Trade Representative has the discretion to take retaliatory trade action in all the following cases except:
a.When a country permits forced labor.
b.When a country fails to allow workers the right to organize and bargain collectively.
c.When a country has denied the U.S. its rights under any of the GATT agreements.
d.When a country fails to provide standards for minimum wage.
124. The principle that limits restrictions on trade to the lowest level possible to achieve the goals for which they are imposed is:
a.Trade barrier limitation principle.
b.Fair trade principle.
c.Principle of least-restrictive trade.
d.Principle of nominal trade barriers.
125. Which of the following statements about the 1994 General Agreement on Trade in Services is false?
a.It is patterned after the concepts that GATT applies to trade in goods.
b.Expands provisions governing trade in services provided for in the original GATT agreement.
c.Prohibits a requirement that local inventors must own a percentage of a foreign services company.
d.Allows each country to list exceptions to the General Agreement for certain service industries.
126. Countries must rely on internationally accepted standards or recommendations for the protection of their plants, animals, and foodstuffs.
a.Japan’s keiretsu
b.Agricultural Act of 1948
c.The Law on the Entry and Exit Animal and Plant Quarantine
d.Codex Alimentarius
130. When a nation that belongs to WTO imposes a tariff or quota on imported products, it is supposed to do so within the guidelines established by GATT. If it does not do so within GATT’s guidelines:
a.The offending nation may suffer military retaliation by the other GATT members.
b.The offending nation may be subject to a proceeding pursuant to the WTO’s Dispute Settlement
Body.
c.The offending nation may end up in the World Court being sued for breach of its GATT contract.
d.None of the above.
131. The term used to describe some action taken by a GATT member country in violation of the GATT agreement is:
a.Null and void.
b.Unfair and inequitable.
c.Persona non grata.
d.Nullification and impairment.
132. Countries A, B, and C belong to GATT. Countries X and Y do not. A has a 7% tariff on televisions exported from B and C. X and Y also export televisions to A. Under unconditional most-favored-nation trade of GATT:
a.Countries B, C, X, and Y are entitled to a 7% tariff on televisions.
b.Countries X and Y are entitled to a 7% tariff on televisions.
c.Countries B and C must petition A under GATT to get a 7% tariff on televisions.
d.Countries B and C get an automatic 7% tariff rate on televisions.
133. Countries A and B both produce coffee. Both countries belong to GATT. Country A imports coffee from B. Once B’s coffee enters A’s stream of commerce, under the national treatment provisions of GATT:
a.Country A cannot subject B’s coffee to higher internal taxes or charges than its domestic coffee.
b.Country A may now charge higher internal taxes or charges on B’s coffee in order to
discourage coffee drinking since the goods have already passed the border.
c.Country A cannot subject B’s coffee to any internal taxes or charges, even if it does so to domestic coffee.
d.None of the above is correct.
134. Which of the following is NOT an example of a commonly used trade barrier?
a.a convention on imported children's toys
b.a tariff on imported oil
c.a tax on imported clothing
d.a national industrial standard that drives up the cost of imported televisions
135. Which of the following is an example of a specific or flat tariff?
a. a 15% tariff on the value of a shipment of t-shirts
b. a $10 tariff on each barrel of petroleum
c. a 20% discount on the value of peaches delivered in October, November, or December
d. None of the above
|
136. |
quotas are imposed on a particular product regardless of origin, while |
quotas |
|||
|
spread the total limit across several specific countries. |
|||||
a. Absolute; qualified
b. Global; specified
c. Absolute; allocated
d. Global; allocated
137. Under the WTO’s dispute-settlement procedures, who can bring a complaint for nullification and impairment?
a. a corporation
b. a group of corporations within an industry
c. a government
d. All of the above
138. The United States has, in part, accepted the jurisdiction of the International Court of Justice. The U.S. acceptance does not apply to:
a. Disputes the parties have entrusted to other tribunals.
b. Disputes that the United States decided are essentially domestic.
c. Disputes arising under a multilateral treaty unless all parties affected are before the court or the U.S. specially agrees to jurisdiction.
d. A and B only.
e. All of the above.
139. Zapata, a Texas Corporation, entered into a contract with Unterweser, a German corporation, to tow Zapata’s drilling rig from Louisiana to Italy. A storm arose and Zapata told Unterweser to tow the rig into Tampa, Florida. Zapata immediately filed a lawsuit in Florida against Unterweser for damages to the rig. The original contract called for “Any dispute must be heard before the London Court of Justice.” The U.S. Supreme Court held that:
a. Florida has jurisdiction since that is where the oil rig is now located.
b. The case should be heard in Texas or Germany because that is where the parties are located.
c. The forum-selection clause is contrary to public policy and will not be enforced; either
Florida, Texas, or Germany would be the correct place to hear it.
d. The parties must adhere to the forum-selection clause and have the case heard in London.
140.The disadvantages of arbitration include: I. Limited Discovery
II. Limited Rights to Appeal
a.I only.
b.II only.
c.Neither I nor II.
d. Both I and II.
141. A forum selection clause is:
a. Contrary to public policy because it ousts the court of jurisdiction.
b. Is upheld as long as it is reasonable, negotiated in an arm’s length transaction, and absent a compelling reason not to honor it.
c. Will not be upheld in Japan or the United States.
d. Is upheld as long as it was voluntary.
142. If mediation is chosen as a form of dispute resolution, it will be:
a. A mandatory process.
b. Binding on all the parties.
c. A voluntary process.
d. Not available in international disputes.
143. A U.S. company sends a purchase order to an Italian shoe company. The Italian shoe company sends a letter confirming the purchase order. The CISG provides:
a. The acceptance by the Italian company cannot be withdrawn under any circumstances.
b. The Italian company can withdraw the acceptance if the withdrawal reaches the U.S. before its acceptance.
c. The acceptance by the Italian company was effective when sent.
d. None of the above is correct.
144. If a U.S. company wants to limit its implied warranties in connection with a sale of goods to a French company, the CISG provides that:
a. No limitation of implied warranties is allowed.
b. The limitation must be conspicuous and specific.
c. The limitation must be agreed to by the French company.
d. The limitation is valid no matter what the form.
145. The name of the clause put into international sales contracts to limit the liability of the parties in the event of an intervening and disruptive force beyond a party’s control makes performance more difficult than expected is:
a. Good excuse clause.
b. Out of control clause.
c. Force Majeureclause.
d. Excuse moi clause.
146. In Basse and Selve v. Bank of Autralasia, the seller submitted a phony sample of ore to an inspection company to obtain a Certificate of Analysis showing high-grade ore. On the basis of the certificate, the seller paid for the documents and took delivery of the ore. The ore turned out to be worthless. The court ruled that:
a. The bank had an obligation to inspect the ore before paying for the documents on behalf of the buyer.
b. The buyer had a cause of action against the chemist for fraud.
c. The bank had acted properly in paying the seller even though the ore did not conform to the contract because the certificate was regular on its face.
d. The bank had acted properly in paying the seller because the bill of lading was negotiable.
147. If the seller in Omaha wishes to place the goods in the hands of a trucking company named by the
foreign buyer and have the risk of loss pass to the buyer at that time, the seller should quote his prices:
a. FAS Omaha.
b. CIF seller’s plant.
c. FOB port of shipment.
d. FCA Omaha.
e. None of the above.
148. What was the holding in El Al Israel Airlines v. Tseng?
a. The Warsaw Convention does not apply where the carrier waives its provisions.
b. The defendant accepted an additional rate to ship the package based on its declared additional value.
c. The Warsaw Convention limits the defendant's liability to $9.07 per pound.
d. An international passenger may not bring a cause of action under local law against an airline
when there is no bodily injury that satisfies the Warsaw Convention.
149. Unlike typical marine bills of lading, air waybills are:
a. not legally binding.
b. always electronic.
c. non-negotiable.
d. documents of title
150. In J. Gerber & Co. v. SS Sabine Howaldt, a lawsuit brought by the owner of cargo (steel products) against an ocean carrier for damage to the cargo caused by sea water and moisture, the court ruled that:
a. The turbulent seas and high winds were not sufficiently severe to constitute a "peril of the sea" under COGSA.
b. The carrier was liable because the vessel was not seaworthy when it left port.
c. The carrier was liable because it had not used usual good seamanship in handling the vessel.
d. The carrier was not liable because it proved that the damage was caused by a peril of the sea.
e. None of the above.
151. In Samsonite v. United States, the court found that:
a. Samsonite luggage was causing serious injury to the Canadian luggage market.
b. Processing of the metal strips was a fabrication, and therefore not qualified for duty-free treatment.
c. The processing of the metal strips was a mere assembly and therefore qualified for duty-free treatment.
d. Samsonite luggage did not cause serious injury to the Mexican luggage industry.
152. Appeals of a bi-national panel decision may be taken to:
a. The World Trade Organization.
b. The court of law in the country in which the dispute took place.
c. The Extraordinary Challenge Committee.
d. The NAFTA Fair Trade Commission.
e. None of the above.
153. The Fair Trade Commission:
a. Attempts to settle disputes that arise over NAFTA.
b. Is a law-making body that was formed by NAFTA.
c. Was created by NAFTA to help promote fair trade.
d. Will be phased out over the next ten years.
154. Which of the following statements is untrue regarding intellectual property rights as covered under NAFTA:
a. NAFTA's provisions protect the intellectual property rights of North American firms.
b. NAFTA requires that each country enforce its intellectual property rights to prevent smuggling of counterfeit items.
c. Specific provisions prohibit the use of geographic regions (e.g. Kentucky bourbon) unless the products are actually derived from that area.
d. Copyrights will be protected equally in all three countries.
e. All of the above statements are true.
155. Regarding trade in services under NAFTA:
a. No NAFTA country can require a North American service provider to have a residence or office within its border.
b. The most important impact of NAFTA's financial services provisions is that they open
Mexican financial service industries to investment by Canada and the United States.
c. NAFTA does not affect regulations applied to purely domestic truck or bus transportation.
d. NAFTA eliminated all tariffs on telephones, cellular phones, and trade in communications equipment in 2004.
e. All of the above are correct.
156. Which of the following statements is untrue regarding emergency safeguard actions under NAFTA?
a. Special safeguards for textiles may be applied where increased imports cause “serious
damage” to the domestic industry.
b. Safeguards are available for ten years for certain agricultural products.
c. The country using them must offer the exporting country trade compensation.
d. Safeguards can take the form of both tariffs and quotas.
e. All of the above.
157. Which of the following statements is untrue regarding NAFTA and nontariff barriers?
a. Most nontariff barriers were to be eliminated within five years under NAFTA.
b. NAFTA prohibits new export taxes on goods under any circumstances.
c. Special rules allow each country to impose import restrictions to protect human, animal or plant life, or the environment.
d. Customer user fees were to be eliminated by 1999.
158. An argument that was used in support of NAFTA’s passage in the U.S. was that:
a. U.S. shipments to Mexico faced tariffs two-and-a-half times the average U.S. rates.
b. Tougher environmental laws in Mexico would eventually be applied to all three countries.
c. Lower wages in Mexico would lead to more jobs being created in Mexico.
d. The cultures of all three countries would not be affected by NAFTA.
159. Harmonized tariff schedules break down product classifications into:
a. 6 digits.
b. 8 digits.
c. 10 digits.
d. 12 digits.
160.The EU Commission coordinates the following areas:
a. Fisheries.
b. Monetary affairs.
c. Social policy.
d. A, B, and C.
e. A and B only.
161. All of the following are EU institutions except:
a. The Council of Ministers.
b. The European Council.
c. The European Commission.
d. The Council of Europe.
162. A is binding and directly applicable in all EU member states; and a sets forth the result to be
achieved but leaves to the individual states the responsibility to employ the appropriate steps:
a. Regulation; directive.
b. Rule; resolution.
c. Resolution; rule.
d. Directive; regulation.
163. Members of the EU include the following countries except:
a. France.
b. Luxembourg.
c. Italy.
d. Switzerland.
e. All of the above are members.
164. Free movement of people in the EU:
a. Allows EU residents to travel, live, study, and work in other EU member states.
b. Is not subject to any limitations whatsoever.
c. Still requires border controls between most member states.
d. Allows for immigration to the EU that was previously deemed illegal.
165. The General Court was established to reduce the workload of the European Court of Justice. Its jurisdiction is limited to:
a. Appeals of the Commission’s decisions on mergers and acquisitions.
b. Hearing cases between EU institutions and their employers.
c. Appeals related to penalties imposed for Non-European Community companies' price-fixing.
d. All of the above.
e. A and C only.
166. In order to participate in the Monetary Union, Maastricht requires European Union members to achieve all of the following except:
a. A budget deficit of no greater than 3% of the GDP.
b. An inflation rate within 1.5% of the three best nations.
c. Exchange rate stability.
d. Maastricht requires all three.
167. Prolonged negotiations for membership in the EU constitute an effective veto of membership, as in the case of which country?
a. Latvia
b. Turkey
c. Croatia
d. Pakistan
168. In response to the recent financial crisis, the Eurozone states launched a permanent funding program for the rescue of states undergoing financial crisis called the:
a. Eurozone Crisis Act.
b. European Fiscal Compact.
c. European Stability Mechanism.
d. None of the above
169. To determine the dutiable status of goods, it is necessary to know their classification, country of origin, and details pertaining to:
a. Perishable/non-perishable status.
b. Partially or fully manufactured goods.
c. Value.
d. Raw materials to be used in production.
170. The customs service may seize articles imported into the U.S. that violate trademark or copyright laws of a U.S. firm but the mark must be registered with the:
a. U.S. Bureau of Customs and Border Protection.
b. U.S. Patent & Trademark Office.
c. A and B.
d. The Bureau of Customs and Border Protection does not seize items with this type of violation.
171. Liquidation of goods by the U.S. Bureau of Customs and Border Protection refers to:
a. The assessment of applicable duties.
b. Disposal of seized goods.
c. Confiscation of goods not allowed for import to U.S.
d. Sale of unclaimed goods.
172. A protest of entry is filed by the importer against the Customs Service when:
a. A dispute arises regarding liquidation.
b. A dispute arises regarding the port at which the goods were received.
c. The importer wishes to refuse delivery and possession of the goods.
d. All of the above.
173. Judicial review of a protest of entry is heard in which of the following courts:
a. Federal Trade Court.
b. Court of International Trade.
c. Circuit Court of Customs Appeals.
d. All of the above depending on the level of review.
174. Where there are two possible classifications for goods, which is followed (in which order):
a. The latest heading that occurs in the schedule; essential character of the goods; their relative specificity.
b. Essential character of the goods; relative specificity; the latest heading that occurs in the schedule.
c. Relative specificity; the latest heading that occurs in the schedule; essential character of the goods.
d. Relative specificity; essential character of the goods; the latest heading that occurs in the schedule.
175. All of the following indicate that a product has been substantially transformed except:
a. the product has a new name, character or use.
b. the product has been advanced in value.
c. the product underwent a change in tariff classification.
d. the product has been manufactured in one country and shipped to an intermediary country before coming to the U.S.
176. Goods may be refused entry into the U.S. by the Bureau of Customs and Border Protection due to:
a. Quarantine to protect the public health.
b. Embargoed country of origin.
c. Lack of a commercial invoice.
d. All of the above.
177. A 99% refund of duties and taxes paid on merchandise that is imported, subjected to manufacture or production, and then exported within five years is called a:
a. Manufacturing drawback.
b. Substitution drawback.
c. Same condition drawback.
d. Re-export drawback.
178. Goods re-exported without having been significantly altered after being imported are subject to a
refund of duties paid known as a:
a. Manufacturing drawback.
b. Substitution drawback.
c. Same condition drawback.
d. Non-transformation drawback.
179. Which of the following combinations of drawbacks are not applicable?
a. Same condition and manufacturing.
b. Manufacturing and substitution.
c. Substitution and same condition.
d. Any of the above combinations could occur.
180. American exports returned to the U.S. are dutiable except when:
a. American-made goods are returned to the U.S. not substantially transformed.
b. Component parts that were made in the U.S. and assembled in a foreign country.
c. Articles exported for repair or alteration but not substantial transformation.
d. All of the conditions above exempt the goods from duties.
181. U.S. Customs regulations specify many articles that are exempt from marking requirements. Some of these are:
a. Eggs, flowers, nuts, and bolts.
b. Products that cannot be marked without injury.
c. Products originating in Canada or Mexico.
d. A, B, and C.
e. A and B only.
182. Which of the following is not a function of the U.S. Bureau of Customs and Border Protection?
a. Assessing and collecting tariff revenue.
b. Regulating the entry of products under quota.
c. Ensuring importer compliance with the Incoterms.
d. Supervising exports.
183. Customs is barred from bringing a civil action to collect an import duty after
a. Three years
b. One year
c. Five years
d. Four years
184. In Briggs and Stratton Corp. v. Baldridge, Briggs was blacklisted by Arab countries because of its compliance with U.S. anti-boycott regulations. Briggs subsequently brought a lawsuit claiming damages as a result of U.S. government action. Specifically, Briggs demanded “just compensation” under the Fifth Amendment “takings clause.” The court:
a. Invoked sovereign immunity to avoid taking subject matter jurisdiction.
b. Refused relief because the amount of damages was "speculative, at best."
c. Refused relief because Briggs’s property had not been "seized or restrained."
d. Allowed relief, since Briggs could demonstrate a complete taking of certain contractual
opportunities and reasonable investment expectations.
e. Refused relief because Briggs lacked "standing."
185. The two principal agencies that regulate the export of goods from the U.S. are:
a. U.S. Department of Commerce, U.S. Department of State.
b. U.S. Department of Defense, U.S. Bureau of Customs and Border Protection.
c. U.S. Customs Service, Federal Trade Commission.
d. Federal Trade Commission, U.S. Department of Commerce.
186. In 1949, NATO’s COCOM was created:
a. To aid Europe's economic recovery after WWII.
b. To control the exporting of goods with military applications to communist countries.
c. To prevent the escalation of the Cold War.
d. To provide U.S. manufacturers with fairer trading opportunities outside the U.S.
187. In the United States, the office that initially reviews and rules on license applications is the:
a. Bureau of Industry and Security.
b. Office of Export Trade Control.
c. Export Administration Board.
d. Export Policy Operations Committee.
188. Which of the following statements is not true?
a. U.S. export control law requires the issuance of an export license to cover the movement of controlled U.S.- origin products from India to Taiwan.
b. The Department of Commerce will not recommend the decontrol of a product on grounds that a non-U.S. item of comparable quality is available rendering the control ineffective.
c. The Bureau of Industry and Security has 90 days to review and rule on the application of an export license.
d. Civil penalties may be imposed on a strict liability basis for violations of export control law without having to prove criminal intent.
189. Enforcement of the U.S. export laws is the function of the:
a. U.S. Department of Commerce.
b. Office of Export Enforcement.
c. State and local police forces.
d. U.S. military.
190. When the president decides to impose export controls for national security or foreign policy reasons, the following businesses may be adversely affected:
a. Farmers whose crops are in short supply.
b. Businesses who cooperate with Arab nations in boycotting Israel.
c. Subsidiaries of U.S. companies having contracts with nations targeted by U.S. foreign policy.
d. B and C only.
e. A, B, and C.
Short Answer (10 points)
Consider the similarities and differences between situations in which the U.S. Trade Act of 1974 can be used instead of the WTO dispute settlement procedures. (Please print legibly).
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Rating:
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Solution: CHAPTERS 1-15 PRACTICE EXAMINATION