I·

e FIJI NATIONAL UNIVERSITY

College of Business, Hospitality and Tourism Studies

Department of Economics I Banking and Finance.

CUS503 - Carriage and Bonding

Final Exam: Trimester 1, 2012

Instructions

Read the following instructions before writing

1. Time Allowed: 3 hours with additional 10 minutes reading time.

2. Answer Booklet: All answers are to be written in the Answer Booklet.

3. Write your ID Number on all the sheets of paper in your Answer Booklet that you use. Please

also number all the sheets paper/pages that you use.

Sections Question Marks

Section A: Multiple Choice 10 Questions. All compulsory 20

• Section B: Terms /Definitions All compulsory 20

-
Section C : Theory Questions All compUlsory 30

Section D : case Study There are three questions. All 15

compulsory

Section E: Essay Question Chose one essay only 15

Total 100

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SECTION A MULTIPLE CHOICE QUESTION [20 Marks]
\
Question 1

Which trade document is regarded as a prima facie evidence of the Contract of Carriage
of Goods and the goods are received by the carriers on the strength of this document:
[A] Consignment Note
[B] Bill of Lading and Airway Bill
[C] Commercial Invoice
[D] Shippers Letter ofInstruction

Question 2
A type of warehouse where locally manufactured finished goods are stored pending
Customs Duty is called?
[A] Private Bonded Warehouse
[B] General Bonded Warehouse
[c] Queens-warehouse
[D] Excise Bonded Warehouse
Question 3

A key responsibility of a Senderis to?

[A] Prepare an export entry for loading of the cargo for exports

[B] . Check the number of packages and marks & numbers before receiving the cargo

[C] Examine the imported cargo at the time of discharge in country of importation

[D] None of the above

Question 4

Which party is liable for any damages caused due to absence, inadequacy and
irregularities of trade documents and trade information?

[A] Exporter
[B] Carrier
[C] Insurance Broker
[D] All of the above

Question 5

lIMC trucks are used for what purposes in Fiji Islands?

[A] Coastwise transfer oftransshipment cargoes only from one port of entry to another

[B] Transfer of duty paid cargoes from one port of entry to another
[C] Transfer of duty unpaid cargoes from one port of entry to another .

[D] Only B and C

Question 6

Warehouse licences including lIMC licences must be paid on and before:

[A] 31 st of March each year

[B] . 31 st of December each year

[C] 30 th ofJune each year .

[D] 6th of January each year

Question 7

An import cargo manifest is defined as:

[A] A list of only transshipment cargoes unloaded, ~Il Fiji

[B] List of cargoes remaining on board of a vessel or aircraft while in Fiji

[C] List containing of goods and passengers to be checked in Fiji

[D] A list of cargoes to be discharged from a vessel or aircraft in Fiji's approved port
of entry

Question 8
During the process of boarding a vessel by the Customs Boarding Officer, which
document is demanded first by the Boarding Officer?

[A] Last port of call clearance

[B] Stores List

[C] Passenger List

[D] Parcels List

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Question 9

LCs is best defined as:

[A] Letter of confinnation that cargo has been loaded on board of a vessel or aircraft

[B] Letter of certification from a carrier that the cargo has left the country of exports

[C] Letter of cooperation between the local banks and overseas banks for payments

[D] Letter of credit is also known as documentary credits used for transferring funds and

making payments to the suppliers of the imported goods from Fiji Islands.

Question 10

The two types of bonded warehouses where imported goods are stored when Customs

Duty is unpaid are?

[A] Excise bonded warehouse and private bonded warehouses

[B] Private bonded warehouse and general bonded warehouse

[C] Export bonded wareho~se and duty Paid bonded warehouse

[D] Customs bonded warehouse and bonded queens-warehouse

SECTIONB: TERMS I DEFINITIONS (20 Marks)

Define the following terms and give examples where possible:
[A] What is the Customs Act, 11 of 1986? (2 marks)

[B] What is CoO? What are the purposes of CoO? (2 marks)

[C] Define two types of Bill Of Lading? (2 marks)

[E] List the documents required for a Perfect Entry? (2 marks)

[F] Which goods do not require an entry? (2 marks)

[G] Discuss what is a security? (2 marks)

[H] Explain negotiability of Document. (2 marks)

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 [1] What is a clean bill oflading? (2 marks)

. [1] What consequences can arise when the bill of lading is in accurate? .(2 marks)

[K] What does the tenn consideration mean as far as the enforceability of an agreement is

concerned? (2 marks)

SECTIONC THEORY QUESTIONS (30 Marks)

Question 1
Inco terms are a codification of international rules for the uniform interpretation of
common contract clauses in export/import transactions.
Discus any three common trade terms used in trade transactions, compare and contrast the
advantages and disadvantages ofthese terms and why these trade terms is so important to
trade transactions. (6 marks)

Question 2
Customs Administration requires export entry for export and import entries for import
of cargoes from one country to another and in case of Fiji Islands.

Evaluate the different common types ofentries that are used in Fiji for importation and

exportation purpose, discussing the reasons and importance for preparing the S.A.D?

(6 Marks)

Question 3
Explain in your own words what ship and air stores are and what purposes do they serve?

(4 marks)

Question 4

Explain the different types of Bonding Warehouses and their functions.

(4 marks)

Question 5

Explain in your own words what do you understand by a consignment Note?

(4 marks)

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Question 6

What is asycuda? Why is asycuda important to importers and exporters in intem.arional trade?

(3marks)

Question 7

Explain what is transshipment in international carriage of goods?

(3 marks)

SECTIOND CASE STUDY 15 MARKS

Case Study 1

Maritime Torts- Negligence and Breach of duty- Cargo damaged as a result of

malfunctioning insulating apparatus; Seaworthiness of vessel implied warranty in bill of
lading

The plaintiff shipped a load of fruit from Fiji to Australia. On arrival the bananas which had
been carried in the insulating chamber of the vessel were damaged and the plaintiff suffered
damage as a result. The plaintiff alleged that the insulating machinery was not operating
properly. The bill oflading implied a warranty of seaworthiness and the plaintiffs claimed for
damages for negligence and breach of duty.
DECISION: Damages awarded to the plaintiff.
HELD: By section 7(1) of Ordinance No.1 of 1926 every bill of lading has an implied
warranty that the ship is seaworthy at the beginning of the voyage. To recover the plaintiff
must satisfy the court that the fruit was shipped in good condition and properly packed. The
defendant must satisfy the court that the insulating apparatus was in good working order. The
court found that the insulating apparatus was not in working order
and this went to the seaworthiness of the vessel. The bill of lading stipulates that the plaintiff
must give notice of his claim within 7 days of arrival at the port of discharge. This clause did
not apply because the damage was due to the unseaworthiness of the vesseL The bill of lading
contained no stipulation as to seaworthiness so that was implied by s.7(1). In that case the
express terms of the bilt of lading did not apply to the implied contract.

With reference to the above case, discuss why damages were awarded to plaintiff?

(5 Marks)

Case Study 2

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r Sea Carriage- Bill of Lading- Waybill- Custom- exceptional C.O.D. consignment
requires forewarning

The plaintiff and defendant are freight forwarding companies; the plaintiff in Australia and the
defendant in Fiji. The parties had a longstanding business relationship. In this instance the
plaintiff took delivery of leather from Italy and shipped it to Fiji. The shipment was consigned
to the defendant under cover of a waybill. With the shipment were 2 further waybills issued
by the plaintiff and naming the Italian suppliers as the shippers and Island Furniture and the
3rd party as consignees. The latter waybills contained special instructions- there was to be
C.O.D. payment before the goods were released. There were additional written instructions as
to the required C.O.D. payment on the waybill.
The consignments went to Island Furniture without payment. The leather was made into
furniture which was sent to Australia and subsequently Island Furniture went into
receivership. The plaintiff issued proceedings against the defendant seeking damages for
breach of contract and negligence. The defendant denied liability, but in case of liability
sought indemnity from the 3rd party on the basis that the leather shipment had been consigned
to the 3rd party.
DECISION: Judgement for the plaintifffor75% of claim; 3rd party claim dismissed.
HELD: The plaintiff and defendant were bound contractually by an agency relationship. On
this basis the defendant owed to the plaintiff a duty of care in tort and contract. The court
found that the defendant had in fact not complied with the instructions on the waybill and had
breached its duty to the plaintiff in contract and in tort. However, the court also found that
C.O.D. consignments are very rare in Fiji and therefore the plaintiff should have forewarned
the defendant about the exceptional consignment. For this reason the plaintiff was found
partly responsible for its loss. The 3rd party claim failed on the pleadings. The defendant
based its claim on the 3rd party ordering the goods but should have based its claim on the 3rd
party's assignment of the goods after it had accepted consignment from the defendant.

With reference to the above case, discuss why the case was dismissed. ? Provide evidence
from the Case. (5 Marks)

Case Study 3

Bill of Lading- exemption clause- stevedores performing services of contract protected

The plaintiffs goods were shipped in a container. The container was taken to the wharf shed
and unpacked by the stevedores. While the plaintiff's goods were in the shed, some went
missing. At trial the court found the stevedores and Harbours Board liable for the loss. The
defendants appealed. The stevedores argued that even if negligence or breach of bailment had
been proved against them they were exempted from liability under clause 5 of the bill of
lading which purported to exempt sub-contractors, servants and agents from liability.

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DECISION: Appeal allowed

HELD: It is settled law that the exclusion clause in the bill of lading can apply to the
stevedores even though they were not parties to the contract of carriage. The bill of lading
brings into existence a bargain which is capable of becoming mutual between the consignor
and the stevedore made through the carrier as the agent. Therefore the exemption clause
protects stevedores performing services under that contract.

With reference to the above case, discuss why the case was allowed. Provide evidence from
the case study. (5 Marks)

SECTIONE ESSAY 15 MARKS

Select one question from the following four questions and write an essay on the question
chosen. Marks are awarded for clarity of arguments and outlining of good examples.
1. Discuss the structure and the functions of the Customs Warehousing" System? In your
answer you must highlight the roles of the FIRCA-Customs and the four types of
bonded warehouses?
(15 marks)

2. Discuss the functions of Fiji Islands Customs Service. Explain why it is regarded as
the key Government Agency at the Fiji's border in Fiji Islands when dealing with
importation and exportation of goods.
(15 marks)

3. Explain the duties performed by a Boarding Officer when a ship arrives from foreign
country. In your answer explain which relevant Government agency boards a foreign
vessel before and together with FIRCA-Customs Officers.

(15 marks)

4. Explain what the dEl.l1gerous goods are in international carriage and are there any
special documentary requirements for these goods. In your answer please provide
examples of dangerous goods.

(15 marks)

THE END