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Enterprises should give priority to market and partner research before conducting transactions …

Enterprises should give priority to market and partner research before conducting transactions …

Thursday 05, 12 2019
Import and Export Department (MOIT) has informed that recently, many Vietnamese businesses have been defrauded in international trade transactions. To stave off and minimize the risks involved in foreign trade...

Import and Export Department (MOIT) has informed that recently, many Vietnamese businesses have been defrauded in international trade transactions. To stave off and minimize the risks involved in foreign trade, Import and Export Department recommends import and export businesses to pay attention to market and partner research before conducting transaction. 

Immediately after a number of seafood exporters running the risk of losing hundreds of thousands of dollars to Echopack Inc., represented by a person named Jason Brown, in Quebec, Canada, Import and Export Department - Ministry of Industry and Trade has sent an official dispatch recommending domestic enterprises to pursuing careful investigation of partners before making transactions.

Accordingly, it was emphasized that priorities should be given to the market research, review and rating checks, credit and trading risks of foreign partners, especially with trading partners or partners found via an intermediary.

The verification can be carried out through public sources, services of companies that specialize in providing verification services, through Associations, diplomatic missions, Trade Office in the importing country ...

As the sales and purchase agreement is always the basis for the settlement of disputes between the parties, enterprises should strictly regulated terms protecting their rights (particularly the provisions on dispute settlement agency), to avoid detriment for businesses when disputes arise.

Concerning the payment process, enterprises should carefully examine the international principles and practices to understand the roles and responsibilities of related parties, thereby considering the choice of method and reasonable conditions of payment, ensuring benefits for businesses.

When conducting the transaction, enterprises may consider using the bank services such as letters of credit confirmation, non-recourse discounting and export factoring for additional guarantees for the availability of recovering money from the bank providing services, as well as supporting businesses in gaining the appreciation of partners’ information and the issuer of the letter of credit.

Earlier, in June, 2016, dozens of Vietnam’s agricultural export enterprises were defrauded by a United Arab Emirates-based import company with one-year late payment or nonpayment. The amount of damage was millions of dollars.

                                          (Source: Website of Ministry of Industry and Trade)

 

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Financial News

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