Businesses need to know how to “protect themselves” and be cautious against export risks

In the context of deeper integration into the global playing field with many different regulations, export businesses need to be equipped with skills and measures to prevent risks.
Ms. Nguyen Cam Trang – Deputy Director of the Import-Export Department (Ministry of Industry and Trade) emphasized: Deep international economic integration has opened up many trade opportunities for Vietnamese businesses, contributing to boosting exports. However, along with opportunities, businesses face more and more different risks in international trade.

Ms. Nguyen Cam Trang – Deputy Director of Import-Export Department.

Referring to risks in international trade, many businesses often think about the loss of goods and money that has happened. But, in reality, the risks businesses face are broader in many different aspects. Sharing more about this content, Ms. Nguyen Cam Trang informed about some forms of risk that export businesses need to pay attention to.

First are the risks from global fluctuations. Currently, the world is changing rapidly and complicatedly, trade and military conflicts all affect trade activities, supply and demand of goods on the market, thereby affecting the production activities of businesses.

Furthermore, each country pursues different monetary policy goals, leading to financial market risks, affecting exchange rates and certainly affecting export businesses. From the third quarter of 2022, Vietnam’s goods exports will decline, mainly due to inflation in major import markets, reducing consumer demand. Therefore, according to the Deputy Director of the Import-Export Department, participating in international trade, export enterprises need to clearly understand market fluctuations so as not to affect production plans.

Second, risks in payment and transportation, typically the case of exporting 100 containers of cashew nuts to Italy or agricultural products to the Middle East has happened. In international trade, there are many different payment methods, including loopholes that businesses can hardly predict.

The Ministry of Industry and Trade and businesses have continuously warned about this issue, but some unfortunate incidents still occur. Partly due to subjective psychology, partly from understanding in commercial transactions. Or there are cases where information is obtained, but in reality, the events that occur become more and more complex and diverse that the business did not anticipate.

Third, related to border trade transactions. Up to now, there is still a part of businesses that do business without foreign trade or official contracts. This is the cause that can lead to price disputes when there is no clear agreement on quality, price, delivery conditions… These issues are not resolved, risks arise, and the goods have not been delivered. for partners, causing businesses to waste time, transportation costs, and storage costs at the border gate.

Finally, risks arise when businesses do not promptly grasp the regulations and food hygiene and safety standards of your country, causing goods to not be able to be exported, or even luxury goods to be returned upon arrival. This risk not only causes damage to businesses, but sometimes affects the export industry if partners temporarily suspend imports.

100 containers of cashew nuts exported to Italy suspected of being scammed are a typical case of international trade risks that can happen to export enterprises.

“As we integrate into many playgrounds in the world with many different legal regulations, businesses need to be equipped with risk prevention measures” – Deputy Director of the Import-Export Department Nguyen Cam Trang said.

From the above reality, according to Ms. Nguyen Cam Trang, businesses need to choose the most appropriate and safe payment method to minimize their risks in transactions. Since cases of fraud in international trade transactions have happened to a number of Vietnamese businesses, finding reliable partners is important. Businesses need to find out and verify partners, should not rely on them but need to ask intermediary businesses to provide specific information about partners…

In addition to the above preventive measures, businesses also need to be equipped with skills to respond and resolve risks such as notifying focal agencies to receive and handle risks at home and abroad; Find out forms of insurance and derivative tools for goods to reduce damages…