Recently, the Vietnam Cashew Association (VINACAS) has just issued Notice No. 45/TB-HHD to the cashew businesses with information about the suspected fraud case in exporting cashew kernels to Dubai in the United Arab Emirates (UAE).

Prior to this information, the Asia-Africa Market Department ( Ministry of Industry and Trade ) said: Immediately after receiving the official dispatch of the Vietnam Pepper Association and the report of the Vietnam Trade Office in the UAE, the Ministry of Industry and Trade issued Note No. 1465/AP-TACP dated July 21, 2023 to the UAE Embassy in Hanoi, requesting the Embassy to notify the relevant authorities to consider and handle the case.

The Vietnam Trade Office in the UAE said that it had received dispatches from a number of Vietnamese businesses with the same content, accusing an importer in the UAE and a collection bank in Dubai tricking into signing a contract to buy cinnamon, pepper and cashew. Immediately after receiving the written reports from businesses, the Trade Office sent a note to the UAE Ministry of Foreign Affairs, Dubai Police, UAE Central Bank and a number of related banks and shipping lines.

The Ministry of Industry and Trade is involved in the case of suspected fraud in exporting cashew kernels in the UAE

At the same time, the deal worked with a number of units such as relevant bank branches in Dubai; Dubai police and file a report on the incident; shipping lines and authorities of the port of Jebel Ali.

Representative of the Asia-Africa Market Department, at present, the situation of fraud in the Middle East market has appeared more than before, mainly concentrated in small-scale trading companies. The most common form of fraud today is that a foreign business when signing a sales contract with a Vietnamese company often requires TT payment terms (electrical money transfer) or issue a check to the mortgage seller. These are the two most risky forms.

Specifically, the TT payment method means that the buyer will receive the goods and then pay the seller. Along with that is the form of issuing a check valid for a certain period of time and then handing it over to the seller as a pledge. This method has many risks as the buyer issues a check with no money in the account; The seller cannot go to the buyer's bank to receive the money because there is no identification card. Moreover, the seller also cannot check the account information of the buyer because Banks in some Middle East countries do not provide customer information to 3rd parties.

In order to avoid unfortunate losses, the Ministry of Industry and Trade recommends that Vietnamese enterprises when dealing with foreign enterprises must be cautious and carefully negotiate payment terms to ensure the safest. Specifically, payment methods such as opening a letter of credit are created by the bank at the request of a partner (LC) or a business representative to deliver documents and receive money. In addition, the D/P payment method (by receipt of documents) is safer than TT and check payments.

The Ministry of Industry and Trade also noted that the seller's banks, when transferring documents to the buyer's bank, must ensure safety, avoiding the case like the above cases because the delivery of documents and receipt of documents (bank security staff) do not have a signature. Accordingly, it leads to the bank security staff handing the documents to the buyer to receive the goods, but the buyer does not pay the bank to pay the seller's bank.

Previously, in April 2023, an enterprise belonging to VINACAS was auctioned by the Port of Mostaganem Customs, Algeria, without being notified of 5 containers of cashew nuts exported by the company. The total value of the shipment is about 466,900 USD (nearly 11 billion VND). The reason is that the customer of the Vietnamese company, Eurl ATS Food Company (Algeria), could not do customs clearance because this company has been included in the list of commercial fraud enterprises by the Algerian Ministry of Trade since June 2022.

In March 2022, 5 Vietnamese cashew exporters also lost control of 36 containers, worth more than 7 million USD, with 36 sets of original documents attached at the Italian port.

On July 17, the Vietnam Pepper Association sent an official dispatch to businesses in the Association and issued warnings when trading in the Dubai-UAE market. The official dispatch stated that, according to the warning of a number of agricultural export enterprises shared with the Association, from June 2023, some Vietnamese enterprises when signing contracts to export agricultural products such as pepper, cinnamon, cashew ... to Dubai have encountered difficulties in payment.