Will 5 Vietnamese banks face the risk of the biggest fraud case of nearly 1,000 billion in the history of the cashew nut industry?
whole case
On the afternoon of March 8, the Vietnam Cashew Association (VINACAS) sent out express mail No. 19/2022/TM-HHD to the Vietnamese Embassy, Trade Office in Italy, ministries, branches and the State Bank of Vietnam. associated with the risk of 100 containers of cashew nuts exported to Italy, worth nearly 1,000 billion VND.
VINACAS announced that a number of companies processing and exporting Vietnamese cashew nuts signed contracts with several customers to import Italian cashews through brokerage firm Kim Hanh Viet. All shipments are packaged in 100 containers, with the destination port of LA Spezia, Italy, the payment method is D/P (D/P – Documents against Payment) or in other words, use a set of documents to exchange for goods. .
It is known that a cashew export company in Vietnam has authorized billing for 5 Vietnamese banks via the D/P method – payment by billing with documents, whereby the importer can only get the set of documents when the full amount has been transferred to the bank. This form of billing is applied in the case of immediate payments.
The problem arose when the company sent an application for collection from a Vietnamese bank to a buyer’s bank in Italy, and received a notification instructing another point of contact in Turkey. Once the buyer’s bank has received the set of documents, the buyer is not their customer and has returned the documents but did not specify a form of payment, or provide the bank with a bill of lading number. Vietnam although the Vietnamese bank has contacted many times.
After the intervention of the authorities, on March 9, VINACAS announced that the initial 100 containers were the number signed in the contract, in fact, after detecting the abnormality, the 5 businesses involved in the Agency have stopped trading. The total damage announced by the association’s representatives was 36 containers (equivalent to 162 billion VND). “There were 5 businesses that were damaged, 27 containers were the worst, the rest each had several containers,” said Bach Khanh Nhut, permanent deputy chairman of the Vietnam Cashew Nut Association.
Nhut later added, “What the business is worried about is that in March, all of these shipments will be anchored in Italy, but neither the business nor the bank is aware of the original documents of the batch. documents can retrieve the goods.”
Expert opinion
Dr. Le Thi Anh Tuyet, Head of the Department of Applied Economics, Faculty of International Economics, Banking University of Ho Chi Minh City, said that in the D/P payment method, the bank only acts as a collection on behalf of the bank. instructions to collect revenue from the company. “The bank will be completely relieved of responsibility if it complies with the billing instructions. Therefore, in this situation, if the bank has followed the billing instructions, it will be completely relieved of responsibility.”
Mrs. Tuyet assessed that although the bank is not responsible for joint business operations, in the banking business, this can affect the bank’s reputation. “Although irresponsible, when receiving payment requests, banks must fully check the instruction information, and provide timely advice to customers before transferring documents. Some help customers avoid this risk”, Dr. Tuyet explained about the impact of the incident on the bank’s business.
Dr. Le Thi Anh Tuyet also said that business is too subjective because the D/P payment method is only for familiar parties.
“In the past, there were some disputes regarding payments by D/P, but especially in situations where customers who were late paying did not want to receive the set of documents in advance to receive the goods, or refused to receive the set of documents. paperwork and refusing to pay due to market fluctuations that are not in the buyer’s favor”- Ms Tuyet shared about the frequency of similar disputes in the past.
Providing solutions for businesses this time, according to experts, businesses and agencies must coordinate to find the original set of documents as soon as possible. Because, he explained, “according to the principles of the transportation industry, the goods must be handed over to the person who brought the original bill of lading”. So far, business actors must find ways to contact shipping lines to support the preservation of goods, and industry associations must also coordinate to support business actors to consume the agricultural products mentioned above.
To prevent this incident from happening again in the future, Dr. Anh Tuyet suggested that businesses should check with their partners first and preferably use a letter of credit (L/C – Letter of Credit) payment method. credit) to ensure safety. To facilitate working with shipping lines to resolve payment-related issues, businesses must win the right to rent a vehicle when doing certain import-export business, so they must export on CIF terms, import on CIF terms. From the bank side, Dr. Tuyet said banks should be more careful in checking customer information and transactions.
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