QUẢN TRỊ XUẤT NHẬP KHẨU - ANALYZING CONTRACTS

According to the FOB the seller must deliver the goods on board, however, they cannot put the container on the vessel, so they have to deliver it to the CYcontainer yard or to the CFScontainer freight station. The examination and counts between the two sides and customs clearance are done in CY or CFS. This means that the seller has actually delivered the goods at CY CFS but is still responsible for the cargo risk until the goods are loaded onto the vessel.

ANALYZING CONTRACTS

GROUP 5 (CLASS: CLC-14DTM3)

There is a Robusta coffee export contract, we analyze the risk arisen following

this contract

SELLER

BUYER

SEVEN Company Address: 16H Cong Hoa St., Ward 16, Tan

Binh District,Hochiminh City, Vietnam.

Tel: 08.3811.7138 Fax: 08.3811.7138

Email: robustacfcompany@gmail.com

Represented by Mr Le Tuan Dung - Director

United States Coffee, LLC Adress: 6901 West SW Marginal Way, Seattle ,

WA 98106, USA Tell: 1(866)763-3133 Fax: (206)

763-3323 Email: Jobs@uscoffee.net Represented by Mr Matthew J.Doherty –

Director

Packing and Weights

Payment

Delivery

Law and Jurisdiction

ANALYZING THE RISK ARISEN

Shipment

Force Majeure

The price is based on the on market price at the time of purchasing so it can take risks for exporter if the coffee price is low at that time

Shipmen t

Pre-shipment inspection

Quality / Quantity is not suitable and importer refuse to take the goods

Term used under Incoterms

According to the FOB the seller must deliver the

goods on board, however, they cannot put the

container on the vessel, so they have to deliver

it to the CY-container yard or to the

CFS-container freight station The examination and

counts between the two sides and customs

clearance are done in CY or CFS This means

that the seller has actually delivered the goods

at CY / CFS but is still responsible for the cargo

risk until the goods are loaded onto the vessel

Shipmen t

Daily, the container delivered to the carrier

at CY until received the bill of lading of the ship takes from 5-7 days, especially the peak season can take more than 10 days

This is a great loss for exporter because of delivery but cannot get money

Custom formalities in Vietnam are complex and prolix The customs authorities are slow

to fulfill their obligations, often take advantages of their positions, making it difficult for many companies to export

Shipmen t

That is not to mention the seller is very

dependent on the ship / container by the seller

who signed the contract and decided the

method of transport Sometimes, due to

dependence on foreign guests, the ship arrives

late to damage the goods gathered at the port

or in stock, especially agricultural products

Sell FOB earns less currency for the country than selling CIF

Usually, exporters will charter and buy insurance companies in their own country So if exporter choose FOB, they cede this right to importer, accidentally causing the insurance companies and shipping lines in importer's country lost jobs

Shipmen t

If exporter directly deal with marine insurance companies and shipping companies, they will

be entitled to a commission However, exporter choose FOB, so they do not hire the ship, then lose this to the importer

Custom clearance

Custom formalities in Vietnam are complex and prolix The customs authorities are slow

to fulfill their obligations, often take advantages of their positions, making it difficult for many companies to export

The commodities will be delayed at the

Shipmen t

Arranging carriage

During loading, the goods might be damaged

Booking space can bring difficulties if the exporter do not prepare sufficient related documents and certificates

The quantity is 1500 MTs and the cargo is to

be loaded by the Seller at the rate of 800 MTS per weather working days of 24 consecutive hours

The partial shipment have to allowed

Packing and Weights

Because coffee is packed in jute bags so if the bag

are not sewn carefully, it can be easily torned

during shipping When packing the good, if the

exporter does not pay attention to features of the

good: physical, chemical in order to pack properly,

the good might damage due to weather, climate,

genius,…

Export bar code can be wrong due to exporter

mistakes This leads name of seller/buyer, port of

loading/unloading, weight, name of commodity,…

are wrong

Seller can lose the payment if Vietcombank goes bankrupt

When the bank checks the documents and if any incompliance between documents and

Memorandum, bank can refuse to make payment

For shipping FCL, the seller will

deliver the goods to the carrier

without delivering directly to

the ship Sellers cannot manage

their goods until boarding, so if

seller use FOB conditions under

Incoterms the seller cannot

complete the delivery

obligation and transfer the risks

to the buyer

Another risk is that exporter has to

be borne the THC fee when use FOB

term

The consignor, after packing the

container, must bring the container to

the port to the carrier If the good owner

does not know clearly the Closing time,

after the Closing time, the goods which

are brought to the landing site will not be

updated in the book, and that container

will not be loaded on the ship and may

have to move to the next ship

Seals must be received from the carrier's

office and must be kept carefully If the lost,

the seal is lost, seller must buy another

seal from shipping line

If damaged or lost containers, the shipping

company must pay compensation to the

shipping company according to the

regulations of each shipping company

When shipping FCL, after changing the

empty container order, the owner will get

the empty container, which will directly

affect the benefits of the exporter If the

container is not good, it can cause damage

to the goods during transportation

Delivery

Law and Jurisdiction

Here, the applicable law is English

law Therefore, when a dispute

arises or any incidents arise,

Vietnam have to hire a lawyer from

the host country to participate in the

explanation of the law, the cost of

hiring a lawyer abroad is many

times higher than in country If the

Vietnam company cannot afford to

hire a lawyer, it cannot be solved

Force Majeure

There should be specific regulations

on time limits for force majeure

notification The buyer may delay

the time of notice to the seller and

give reason as a reasonable time

!