As a Canadian Exporter, you have received an order from India, covering twelve, 20' containers, of

grade A apples, to be exporter under one contract, but 12 different shipments. Shipment from

Montreal port to Mumbai port and value of each container is USD 50,000 FOB Montreal.

Canadian exporter is requesting a letter of credit at sight, supported by a red-clause letter of credit, as

well, covering twelve shipments. The Indian importer wants to issue a cumulative revolving letter of

credit, covering each shipment, and value to be negotiated upon clean documents, and discrepant fee.

On a group basis, please research, analyze, and discuss in a detailed manner the following:

1) What is the most feasible manner to structure this deal, and why? (5 Marks)

2) Please provide your answer, by giving factual evidence, of utilizing trade finance rules, the role of

documents, and the credibility of the banks involved. (5 Marks)

3) Further, should the sight letter of credit (L/C) be discounted, or not? (5 Marks)

4) Finally, what are the risks faced by the issuing, and paying banks in the process? (5 Marks)