Vietnam Association of Seafood Exporters and Producers (VASEP) has just announced that a lot of fishery enterprises were defrauded and faced with financial risks of losing hundreds of thousands of dollars to a foreign customer. It is Echopack - INC company with the representative named Jason Brown in Canada. VASEP has sent warnings to all fishery enterprises in Vietnam for warinessof Echopack Company. At the same time, VASEP also noticed that Vietnamese businesses when working trading with foreign partners should do careful research on them.
MrNguyen Van Dao, General Director of Go DangCompany, said that his company sold a lot of fishery batches with value of more 100,000 USD but didn’t receive any money from Echopack Company.
Specifically, Go Dang conducted transactions with partners based on the open method called “L/C”. L/C (Letter of Credit) is a payment undertaking given by a bank to the seller and is issued on behalf of the buyer.. Accordingly, Echopack opened L/C at a bank named “General Equity” in New Zealand; once the delivery is received and all the vouchers are issued, this bank will transfer payment.
“But we have wasted a lot of time trying many ways yet this bank hasn’t transfered payment. And Echopack Compary acted in the same way as the bank. This company had fraudulent signals when registering a signature different from the signature in trading contract” – Mr Đạo said with sadness.
The representatives of many other fishery companies have also admitted that they were treated with the similar way by Echopack. According to VASEP, so far there have been 10 Vietnamese enterprises falling victim to this company.Mr Truong Dinh Hoe, General Secretary of VASEP, also saidthat Echopack Company signed a contract for buying fishery products fromVietnamese enterprises. The payment was conducted through General Equity Bank. According to the agreement of two parties, the signature of Echopack at General Equity must match with the signature of Echopark in commercial contract.
However, when Vietnamese enterprises sent full set of documents, requested General Equity to pay but this bank was 100 days late in replying. After that, they also said that the signature in contract and the signature at General Equity didn’t match so that they didn’t pay for Vietnamese fishery companies
After doing some investigation, truth has dawned upon Vietnamese enterprisesthat their buyer hasgiven a contract to the bankwith a signature different from that of the contract between two parties…
“Based on that, VASP and fishery enterprises have come to an inclusion that Echopack colluded with General Equity bank to take the goods without paying. Echopack defrauded by using different signatures when signing contracts and including a signature related term into the contract. As for General Equity, They deliberately violated the provisions of payment through L/C” – said Mr Truong Dinh Hoe.
Should sue to court
VASEP has sent warnings to fishery companies around the country against Echopark Company. VASEP also insisted that Vietnamese enterprises should carefully research foreign customers when conducting transactions with them.
To be more specific about the problem, Mr Nguyen Trong Thuy, arbitrator of Vietnam International Arbitration Centre (VIAC) informed that the inclusion of the condition of checking the signature of opener was uncoicidental withthe provisions of Term 4 UCP 600 (a set of terms applied by L/C with which anyone related to L/C transactions must obey). This means that the exporter must negotiate to cancel this condition in L/C if they want to avoid the risk.
In fact, Vietnamese exporters couldn’t conclude whether the signatures match or not because they have no signature sample to compare but depend entirely on the announcement of the bank opening L/C.
Even if the bank of the exporters had signature sample to check, there may exist risks if the buyers defraud. They may intentionally sign with the wrong signature, or let somebody sign…
In regard to the solution of this problem, Mr Thuy said that there is a fat chance that the money will return and it is possible that the “cheater” has disappeared.Mr Thuy also advised that enterprises should sue to court as even if the money is not refunded, there is still a good lesson: “If we are afraid to sue to court, we will always be defrauded.”