Exporters learn how to avoid offshore payment delinquency
Exporters learn how to avoid offshore payment delinquency
Risks that companies face while exporting and measures to mitigate such risks and collect overseas receivables were discussed at a seminar in HCM City on December 22.
Speaking at Risk Management and Offshore Debt Prevention in Free Trade seminar, Quyen Anh Ngoc of the Ministry of Industry and Trade’s Multilateral Trade Policy said existing and future free trade agreements would bring great opportunities for Vietnamese firms to boost exports and enter the global supply chain.
But they would also face challenges like technical barriers and the threat of losing domestic market shares, he said.
Besides, exporters face the risk of not getting payments from their buyers, he said.
He urged export firms to fully understand the commitments made under the FTAs, draw up suitable business strategies and strengthen their competitiveness to take better advantage of them.
Ngo Khac Le, an arbitrator at the Viet Nam International Arbitration Centre, said to prevent risks and improve efficiency in exports, before signing export contracts Vietnamese companies should carefully check the antecedents of their customers, especially new customers, through consultancies, Viet Nam trade offices abroad and other sources.
They should choose suitable INCOTERMS (international commercial terms), have clauses ensuring the independence of the contract, and set a duration for negotiations and dispute resolution, among others, he said.
Firms should resolve their disputes through arbitration centres, he added.
Christopher McNabb, director of Assurance Global Financial Services and Solutions in Viet Nam, said collection of delinquent offshore account receivables is very challenging and expert advice is critical.
According to his company’s statistics, Viet Nam’s exporters lost an estimated US$8 million last year, he said.
Uncollectable account receivables result in high financial losses to exporters and so they need to have a credit management system to manage these risks and employ global best practices to avoid delinquent debts, fraud and revenue loss, he said.
He also introduced his company’s services and measures for collecting delinquent offshore account receivables.
Organised by the Viet Nam Chamber of Commerce and Industry and Assurance Global, the seminar attracted more than 100 delegates, including members of business associations and executives of large export firms.
