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Illustrative image. (Photo: SGGP) |
A Vietnamese company exported five containers of cashew nuts to Algeria through a South African enterprise. Unfortunately, the business located in South Africa went bankrupt while the goods were in transit through this country's port, putting the cargo at risk of being lost.
The Vietnam Cashew Association (Vinacas) and the Vietnam Pepper Association (VPA), on the morning of April 19, issued an urgent document to their members cautioning them about potential fraud in exporting to Algeria.
The Vietnam Trade Office in Algeria had previously dispatched a warning to Vinacas and VPA about potential fraud in exporting to Algeria. In August 2022, a Vietnamese company exported five containers of cashew nuts to Algeria through a South African intermediary company that paid a 10 percent deposit on the goods. However, upon arrival at the port of Mostaganem, the Algerian customer, Eurl ATS Food, was unable to clear customs due to being listed as a fraudulent enterprise by the Algerian Ministry of Commerce since June 2022.
The Vietnamese company that owns the cargo and the shipping company completed the procedures to change the consignee to another Algerian company as requested by the South African intermediary. However, the Algerian customs did not accept the change. According to the Mostaganem port customs, Eurl ATS Food lost the legal capacity to carry out procedures such as importing, changing the recipient company, or re-exporting the goods. After being held at the port for over five months, the Algerian customs were authorized to auction off the cargo.
Mr. Dang Hoang Giang, Vice Chairman of Vinacas, revealed that one of the association's members was the victim of the fraud. To prevent the member from losing the goods, Vinacas requested the Vietnam Trade Office in Algeria to contact Algerian customs and halt the public auction of the cargo. As a result, the business is in the process of returning the goods to Vietnam. This case is similar to another incident where 100 containers of cashew nuts were destined for Italy, but due to reliance on brokers without verifying customer information, the goods were lost. Vinacas continues to advise businesses to research information about new markets and customers before exporting.
The Vietnamese Trade Office in Algeria advises Vietnamese businesses to conduct thorough research on their customers before exporting, such as requesting copies of their business license, tax code, and passport page with a photo of their company's legal representative and verifying them with the appropriate authorities. Currently, the recommended payment method is an irrevocable letter of credit (L/C) with confirmation or by bank collection (DP, CAD at sight), which requires customers to deposit 20 percent or more.
However, due to restrictions on deposit transfers within Algeria, Algerian banks do not allow customers to make deposits within the country. Therefore, enterprises may request customers to make deposits outside of Algeria. To proactively control the money, businesses may ask customers to pay 100 percent of the goods before the shipment arrives at the port of Algeria.
Moreover, if the customer or Algerian bank is late for payment by one week after the goods have entered the port, the enterprise should immediately inform the Trade Office, Embassy, and relevant agencies, such as the Asia-Africa Market Department under the Ministry of Industry and Trade, for timely advice and support. This is to avoid leaving goods at the port for an extended period and incurring warehousing costs, fines, and having the goods auctioned off by local customs for public funds.
