10 August 2023

Over the past time, due to not thoroughly researching information about partners, many Vietnamese companies have lost deposits and goods when transacting business in Latin America.

Vietnam-Mexico bilateral trade is facing great development opportunities as both countries are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as well as dynamic developing economies with the world's leading economic openness.

With the advantage of being a CPTPP member, Mexico has committed to eliminate 77% of tariff lines, equivalent to 36.5% of import turnover from Vietnam and will eliminate tariffs on 98% of tariff lines by the 10th year from the date of entry into force of the agreement.

As a result, Vietnam's exports such as seafood, coffee, rubber, phones and auto components and spare parts to Mexico recently achieved a high growth rate of 27-65%. In contrast, Mexico has also gradually boosted exports of beef, pork, agricultural products and beverages to Vietnam.

However, in the context of international trade with many risks of fraud and fraud, businesses need to be equipped with the necessary information and skills to optimize business efficiency as well as take advantage of the opportunities that CPTTP brings.

In an interview with a reporter of the Vietnam News Agency in Mexico City regarding the above issue, Vietnam Trade Counsellor in Mexico Panama Luu Van Khang said that in recent years, due to not carefully researching information about partners, some Vietnamese enterprises have become victims of disputes, fraud when conducting business in Latin America.

There are many Vietnamese companies that have lost their deposits or lost goods while conducting business transactions. Accordingly, taking advantage of the specificity of the Spanish language, some subjects have created names that closely resemble famous corporations in the world, even changing only one letter. Some others use unclear methods of declaring company addresses, making it difficult to find out information.

According to Mr. Luu Van Khang, these fraudulent businesses have one thing in common, which is that most use bank transaction accounts in a third country but not in the host country, in order to make it difficult for the authorities to trace and investigate.

Trade Counsellor Luu Van Khang gave a specific example of a dispute that occurred recently between a Vietnamese company when buying pork from a Mexican partner. After signing the contract and making the deposit, the seller sends a bill of lading (B/L) and asks the buyer to pay the remaining amount to an account in the United States.

However, when conducting a search of the shipping itinerary, the Vietnamese side discovered that the train carrying the consignment in the contract was diverted to a country in the Middle East instead of Vietnam. Detecting signs of fraud, Vietnamese enterprises have asked the Vietnam Trade Office in Mexico and Panama to intervene and clarify the matter.

The results of working with the National Business Council of Mexico showed that the Mexican company (the seller) has a name that closely resembles a well-known American food trading group, thus confusing the Vietnamese business (the buyer) by thinking that they are dealing with the American company's branch in Mexico.

The Vietnam Trade Office in Mexico and Panama recommends that businesses need to seek customer information, not sign contracts with people who are not legal representatives of the notarized company.

In addition, to ensure safety in payment, Vietnamese enterprises need to sign payment contracts in the form of letters of credit with bank guarantee (L/C), instead of wire transfer (T/T).

In cases where it is mandatory to use the T/T method, absolutely do not transfer money to an account in a third country as well as to an account in a personal name.  In addition to coordinating with the Trade Office in verifying partner information, Vietnamese enterprises also need to actively cooperate with law firms and local business associations to diversify information sources as well as enhance knowledge of legal regulations in Mexico in particular and Latin American countries in general.

Source: congthuong.vn