Rice is one of Viet Nam's major export products to Africa. The Viet Nam Trade Office in Algeria urged Vietnamese exporters to be careful when doing business with African partners. – Photo kinhtedothi,vn
The Viet Nam Trade Office in Algeria urged Vietnamese exporters to be careful when doing business with African partners to avoid fraud and losses.
The trade office said that recently it received letters from several Vietnamese firms reporting difficulties in payment with several African partners.
Due to limited financial capacity, African importers often proposed payment after arrival of goods and did not open letter of credit (L/C) due to high cost, which was risky to Vietnamese exporters.
In some cases, there were sign of fraud. For example, African partners informed that they opened accounts at banks, but the accounts did not work and gave incorrect addresses for contact.
The trade office said that firms should seek partners through reliable channels such as trade promotion programmes and business forums. Caution must be given when seeking trade partners online or doing business with partners who contacted directly via their website.
Firms could also ask for support from the trade office in verifying the legality of the trade partners.
Viet Nam’s commercial banks should provide consultancy to firms in choosing prestige banks in Africa at which they would ask their partner to open accounts, the trade office said, adding that firms should choose L/C payment method and say no to Document Acceptance (D/A) method.
In addition, firms should ask for advances of at least 40-50 per cent of the contract value and verify addresses and banks of the importers.
If firms imported goods from Africa to Viet Nam, they would need to check goods though prestige organisations such as Bitec International SA and Veritas before shipping.
Firms should seek market information on the Ministry of Industry and Trade’s websites such as vietnamexport.com.vn and moit.gov.vn.
Despite many risks in carrying out trade with partners, Africa with a population of 1.2 billion and not very demanding was a potential market for Viet Nam.
Customs statistics showed that Viet Nam’s export to Africa was worth US$3.12 billion in 2019, up 8.1 per cent against 2018.
Viet Nam imported goods worth $3.95 billion from Africa last year, a year-on-year drop of 3.7 per cent. — VNS