HCMC – The Ministry of Industry and Trade has issued a warning to Vietnamese exporters regarding the risks associated with sending original documentation to buyers’ banks in foreign countries, including the United Arab Emirates (UAE).
The warning comes after several Vietnamese businesses reported no payments from foreign partners due to the loss of original shipping documents, despite fulfilling their obligations in delivering cashew nuts to the UAE.
To address this issue, the Ministry of Industry and Trade (MOIT) has contacted the Embassy of the United Arab Emirates (UAE) in Hanoi, seeking collaboration in investigating and resolving the potential trade fraud faced by Vietnamese businesses in cashew nut exports to the UAE.
Simultaneously, the Vietnamese Trade Office in the UAE has engaged with the UAE Ministry of Foreign Affairs, Dubai Police, UAE central bank, and relevant banks and shipping lines to address the matter.
According to the Asia-Africa Market Department under the MOIT, trade fraud in the Middle East has been on the rise, particularly targeting small-sized trading businesses. Foreign buyers often request payment through telegraphic transfer or check issuance, posing high risks for sellers, as payment is typically made only after buyers receive the products, and sellers cannot verify the outstanding amount in the importers’ accounts for check issuances.
To mitigate trade fraud risks, the Ministry of Industry and Trade advises Vietnamese businesses to exercise caution while dealing with foreign buyers, especially during payment negotiations.
The Ministry recommends opting for safer payment methods in international trade, such as letter of credit (L/C) or document against payment (D/P), and emphasizes the importance of careful document delivery.
A similar incident occurred in March last year when a Vietnamese business exported 100 containers of cashew nuts to Italy using D/P as the mode of payment. However, when the buyer’s designated bank received shipping documentation, only copies of original documents were found. This could lead to the buyer refusing payment to the Vietnamese exporter, despite receiving the products.