Workers process shrimp for export in Ca May province. Exporters to the US are told to pay more attention in signing contracts with their foreign partners. — VNA/VNS Photo Tran Viet

The Ministry of Industry and Trade (MoIT) told local business to be more cautious in trading with US partners as some Vietnamese firms reported being cheated in the US.

The ministry's Viet Nam Trade Promotion Agency in New York, US, informed the MoIT that some Vietnamese firms have recently suffered losses in transaction with their US partners which were already bankrupt or unable to pay.

According to the agency, the main reason for the losses was that the Vietnamese firms did not carefully research their partners before trading.

The agency said: “Some have sought and found their partners online but did not inspect their real capacity.”

It added, as of the selling target, local firms often gave their partners the advantage in contract terms, especially payment terms of documents against acceptance, or DA.

As per DA terms, the buyer accepts documents by signing bills of exchange sent by the exporter, agreeing to pay the value of goods shipped as per agreed period of time. The agency said buyers in the US often take advantage of the payment method to delay payment or may not pay because they only need to confirm the payment instead of really pay to get the goods.

In the context of the COVID-19-affected market, Vietnamese businesses need to be more cautious in signing contracts with foreign partners, said the agency

To avoid risks for businesses, the office suggested Vietnamese businesses pay more attention to their partners' information, especially the ones they found online.

It suggested businesses moderate the contract value and not use DA payment terms but a secured one with first-time business partners.

The local business can seek support of trade representative offices in the areas they wish to do business in a foreign land to have more information of their business partners to avoid losses. — VNS