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Question

Difficulty: MediumForeign Trade Types and Balance of Payments

A Nigerian merchant receives a consignment of industrial machinery shipped from Germany. Which of the following foreign trade documents serves as the legal document of title, enabling the importer to claim physical possession of the cargo at the seaport?

  1. Bill of LadingAnswer
  2. B
    Certificate of Origin
  3. C
    Consular Invoice
  4. D
    Indent

Answer

Bill of Lading
The Bill of Lading is the definitive document of title in foreign trade. Issued by the shipowner or shipping agent, it acts as a receipt for goods loaded, evidence of the contract of carriage, and a negotiable instrument whose transfer passes legal ownership of the goods to the consignee.

Step-by-Step Solution

1
Identify the required legal function of the document in the foreign trade transaction.
The importer requires a document that proves legal ownership (document of title) to collect cargo from the shipping company.
In international shipping, carriers require proof of title before releasing goods.
2
Analyze the functions of key international trade documents.
The Bill of Lading represents the physical goods themselves, functioning as a transferable document of title, receipt, and contract of carriage.
Possession of an endorsed Bill of Lading gives the holder legal entitlement to claim the goods at the port of destination.

Key Concept

Document of Title in Foreign Trade
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Topics

Foreign Trade Types and Balance of Payments

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