International trade in general, and Vietnam-Bangladesh trade in particular, has been on a growth trend in recent times. In 2021, bilateral trade turnover between Vietnam and Bangladesh increased by 52% compared to 2020 (USD 1.2 billion); figures for the first 6 months of 2022 also showed a significant increase, and 2022 is expected to grow by approximately 30% compared to 2021 (about USD 1.5 to 1.6 billion).
Following this general growth trend, a number of trade disputes and instances of commercial fraud have also arisen. Looking back at recent cases, notably the case of Vietnamese cashew nuts exported to Italy and several other cases, it is clear that trade disputes are becoming increasingly sophisticated (the main cause being a lack of caution on the part of enterprises). Forecasts suggest that without timely protective measures, similar cases will continue to occur, and may become even more varied and sophisticated.
To ensure safe and sustainable trade, the Vietnam Business Society in Bangladesh (VBS) advises the Vietnamese business community, when trading with Bangladesh, to:
1. Before deciding to trade, make full use of the role of the diplomatic representative agencies of both sides, chambers of commerce and industry, professional associations, and the relevant official agencies of Vietnam and Bangladesh:
1.1. Regularly update yourself on and research the trade-related agreements that Vietnam and Bangladesh have signed.
1.2. Technical barriers applicable to each industry, special tax policies, and cultural-religious impacts (for certain industries) in Bangladesh (for the Vietnam-to-Bangladesh export direction).
2. Clearly assess and verify the trading partner, including:
2.1. Legal status and import-export licenses (applicable to conditional business lines).
2.2. Financial capacity, contractual terms, and commercial conditions… (do not place too much trust in contracts with commercial terms that seem too easy).
2.3. Independently evaluate and verify the enterprise; do not place too much trust in information on websites and social media tools.
3. Internal governance and control:
3.1. Continuously improve yourself, including personnel, organizational structure, and risk management systems.
3.2. Assess the credit institution responsible for the buyer’s guarantee and payment.
3.3. Keep documentation confidential, and maintain a close communication channel between the enterprise, the seller’s bank, and the buyer’s bank, to control payment and document handover.
3.4. If an enterprise focuses primarily on a small number of markets, including Bangladesh, it should have a representative or presence in Bangladesh during the trading period.
4. Consider using the services of a reputable third party to handle import-export consignment and related services.
5. If problems arise during the trading process, take prompt action:
5.1. Contact the relevant banks and all related parties immediately.
5.2. Coordinate with the relevant agencies and organizations of Bangladesh and Vietnam.
• We wish the business community safe trading and sustainable growth!
Sincerely,