HANOI: The Import and Export Department under the Ministry of Industry and Trade on Wednesday recommended firms study their trade partners carefully in order to avoid risks in international trade. The warning was raised after several domestic export firms were reportedly swindled in international trade. Recently, some seafood exporters faced the risk of losing hundreds of thousands of dollars with trade partner Echopack Inc, represented by Jason Brown in Quebec, Canada, the ministry said in a note on its website. Payment for these export batches would all be conducted through a letter of credit (L/C) method provided by General Equity bank based in New Zealand, which was selected as Echopack’s representative.
The swindles were reported by the Việt Nam Association of Seafood Exporters and Producers at a conference late last week. The association said that Echopack and General Equity colluded with each other in letter of credit procedures to import goods from Việt Nam but refused payment as the letter of credit documents were invalid. Lawyer Ngô Khắc Lễ said that the biggest risk for Vietnamese exporters was the shortage of reliable information. The department said that export firms must firstly study the market and their trade partners’ credit rating carefully. Information should be checked with reliable organisations such as the Credit Information Centre, industry associations in import markets and trade counselors in overseas markets.
Contract terms were also important, which would serve as base for conflict resolution and rights protection, the department said. Regarding payment, firms should give special attention to studying international practices to understand the responsibilities of each party, through which, they could choose the most reasonable payment method for their benefit. In 2015, Việt Nam’s export lost around US$8 billion due to trade swindles and failure to recover debts.