A Vietnamese enterprise exporting rubber to Pakistan is facing the risk of losing the delivered shipment because the buyer’s bank refuses to pay. This exporter has just encountered a very rare case despite using the safest method of payment: L / C.
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| Risks with complicated developments in the Covid-19 epidemic tended to increase when the buyers were also facing difficulties. Artwork: Minh Tam |
According to information shared by the Vietnam Trade Office in Pakistan (under the Ministry of Industry and Trade), the “in distress” enterprise is a company in Thua Thien Hue province. The company signed a contract to export rubber to Pakistan and signed an agreement with customers to use a letter of credit payment method (L / C). After delivery, the company makes payment procedures but the bank where the buyer opens the L / C refused on the grounds that the document set is not in accordance with the regulations.
At this point, the company directly contacted the customer, offering to accept payment but was also rejected. The reason is quite understandable that at that time, Covid-19 translation was complicated all over the world, the price of rubber fell sharply, so customers tried to force the price.
The enterprise wants to transfer the shipment back to Vietnam (after unsuccessfully trying to sell the goods to a new customer), but cannot do it due to failure to meet the condition of requiring the consent of the old customer as prescribed by host country (Pakistani law only allows to re-export one imported consignment for which customs declaration has been opened with the buyer’s consent). Enterprises are facing the risk of losing or even losing their shipments.
According to the Vietnam Trade Office in Pakistan, this rubber exporting company in Thua Thien Hue has encountered a risk, which can happen to the seller when using payment via L / C, the international payment method. arguably the safest one. It is intentionally trapped by the buyer by including in the L / C regulations one or more requirements that the seller cannot fulfill.
In the above case, L / C requires the seller in addition to the bill of lading (Bill of Lading – B / L) to also present a certificate signed and stamped by the carrier. The problem is that when delivering the goods, the shipping company only gives the exporting company a signed certificate without a stamp for the reason of complying with the provisions of international law applicable to the shipping sector.
In this case, the company’s international payment officer seems to have made a mistake, has not done enough of the testing steps (as instructed by the training curriculum). That is when receiving the L / C, the staff in charge of international payments must carefully study the content to each dot, comma to determine all regulations for payment vouchers and notify the The relevant department in the company prepares the required documents.
In the event that a relevant department responds cannot comply with the L / C’s regulations, the international payment officer must report and propose to the company leaders to request the customer to adjust the L / C. If the customer does not accept the L / C adjustment, the enterprise is forced to refuse the delivery to avoid the risk of payment refusal.
“L / C payment is a tough challenge for international payment staff because according to international regulations, there is only a very small mistake in the document set such as a misspelling, even one dot, comma, typed missing or incorrect position is enough for customers and banks to have reason to refuse payment ”, Vietnam Trade Office in Pakistan stressed.
Exchange with TBKTSG Online Around this story, the director of a business with 25 years of exporting and importing goods (do not want to name) said that her business has never met a request for a stamp of a shipping company. as the case of enterprise in Thua Thien Hue mentioned above. And in fact, the shipping line has never stamped it. Therefore, in this case, it is highly likely that the business is trapped and possibly due to lack of knowledge or subjectivity, this detail is omitted in the L / C requirement.
For many years, he said, in order to avoid risks when exporting goods, even using the safest payment method, L / C, her business had to buy export insurance. Insurance companies also only sell insurance to companies using the L / C method.
“Of course, this costs us more, but we have to accept less profits to sleep well. Having insurance, if there is a problem, they will take it for me. Before that, they will also help me check the file, minimize the errors, “she said.
According to Saigon Economic Times
