Could you please tell us about the trade disputes between Vietnamese businesses and foreign partners in recent times?

Disputes over foreign trade and more specifically the import-export sector, of which export disputes are the most numerous, the majority are related to the quality of goods; delivery time; dishonesty of the seller or buyer. Dishonesty occurs a lot, meaning customers want to cancel orders, giving reasons that favor the regulations of the buyer's country, creating difficulties for sellers.

Another dispute that often occurs is a dispute due to loss of goods during the transfer from the port of the selling country to the port of the purchasing country, which is also the reason why the partner refuses to receive the goods and requests compensation. Another very common dispute is that the goods are taken out of the port but the original documents are still with the seller, not yet sent.

The above dispute content is not new, but over the years it has often happened, businesses' foreign trade activities are not familiar with this issue, so they often make mistakes. One extremely difficult thing is that we almost never bring all of these disputes to international courts because international legal proceedings are too expensive and pose quite a big risk to Vietnamese businesses.

So what do businesses need to do to limit legal risks when carrying out import and export activities, sir?

First, businesses need to find out and identify partners in their import-export related activities, such as logistics and banks. Businesses themselves do not have to understand foreign legal issues, LCs, etc., so they must go through banks. Besides, all payment documents, deposits... businesses must make them through the bank. Currently, many Vietnamese people who trade with foreign countries often work directly with partners. Maybe they deposit a small deposit, and then we immediately deliver the goods; after that, send the documents directly or issue orders for the partner to receive the goods, almost without going through the bank.

The important thing is the shipping company, currently many Vietnamese exporters are actually shipping goods through very small agents, offices with only 1-2 employees, they are employees of large shipping companies beside working; you should choose a large and reputable shipping company in each region because they will never lose their reputation or brand just because of 1-2 containers of goods.

Another thing to note is the partner. Partners are very important. If we are initial partners, we must have strong agreements and commitments; we must explore and know what that partner is like. Especially when being an initial partner, you must pay attention to legal issues. Legality here is not as important as payment, how do we receive enough money when the customer takes out the goods. When customers are traditional partners who have been doing business together for 10-20 years, they put most of the legal procedures aside and can allow LC (Payment by Letter of Credit) to be paid within 60 days, TT payment (Telegraphic transfer payment) 100 days and no documents needed, that is trust. Therefore, we build a team of really stable, really sustainable, traditional foreign buyers, which is the most important.

So if a business is involved in some trade disputes, what is your advice to businesses?

When caught in a trade dispute, businesses need to work with their credit partners and banks to see why the dispute happened without the bank knowing. Ideally, businesses must go through their business association. For example, if a cashew export enterprise experiences loss of exported goods, the Cashew Association must speak up; the association will also work with Vietnamese representatives in the area where the incident occurred. Along with that, businesses must gather people who have taken risks like themselves to see if legal measures can be taken.

But as far as I know, legal proceedings with foreign partners are very difficult and the financial costs can sometimes be much higher than the value of the shipment. In particular, the legality of Vietnamese businesses is still very weak. Meanwhile, foreign partners always have a very professional law office. We don't have a lawyer, so when something happens, we start filing the case from scratch. Therefore, businesses must go through associations and representative agencies of Vietnam abroad. It is important for partners and markets that exporters must understand very carefully and fully assess risks. In fact, there are areas where Vietnamese exporters do not want to do business because the risks are very high. But there are very civilized markets where disputes rarely occur.

In recent times, there have been many disputes about the quality of goods, businesses need to seriously review themselves because this issue not only affects the reputation of the business, but also affects the reputation of the country. As for financial disputes, businesses must have a legal department, must understand international law, and have experience in handling international disputes in the host country.