Page 64 - New Cloth Market November 2022 Digital Edition

INTERNATIONAL BUSINESS PAGES

Relating to the import fee. compensation penalty. But when safe-trading/bylaws-rules/
the price of cotton is high, the seller
of cotton by Vietnamese calmly delays delivery, late delivery, * ICA has a quality comparison table
“Value differences VDC” to compare
yarn enterprises and "dripping" delivery, causing business- cotton qualities from around the
es to lose more time and costs to
the irrationality of cot- receive goods at the port without the world. Referees will also rely on these
tables to consider variations in cot-
Shipper having to bear any conse-
ton import trade trans- quences. any penalties for being late. ton quality. Therefore, the parties
should rely on this table as a basis
actions - In addition to the delayed delivery, for negotiation. Reference at: https:/
Shipper also delivered the wrong /ica-ltd.org/resources/
Reply to Official Letter No. 600/XNK-
quality cotton compared to the com-
CN, dated October 7, 2022 of the Im- * The contract should specify the
mitment in the contract. They are
port-Export Department, Ministry of terms used in the laws referenced,
willing to accept fines and compen-
Industry and Trade and further clarify if necessary to
sation in accordance with the provi-
serve as a basis for resolution in the
Regarding the import of cotton by Viet- sions of the ICA law. However, the event of a dispute.
namese yarn enterprises and the un- level of compensation based on the
reasonable issue in the commercial ICA code is very low compared to * Penalties as well as compensation
transaction of importing cotton, ac- the value in the contract. As a re- should be clearly stated in the con-
cording to the information stated in the sult, the shipper is still profitable, and tract if the buyer pays late, or when
official dispatch No. 600/XNK-CN, dat- the party that suffers is still the cot- the seller fails to deliver the goods
ed October 7, 2022 of the The Import- ton buyer. on time or of the wrong quality.
Export Department, Ministry of Indus-
Measures: * Before signing a contract, the par-
try and Trade, attached to the docu- ties need to negotiate carefully about
ment No. E-40463264-519/78622660, * Vietnamese enterprises often care- the laws; penalty, compensation, as
dated September 29, 2022 of the Turk- fully choose reputable partners for well as should identify the seller, the
ish Embassy, the Vietnam Cotton and long-term business. Avoid unneces- number of years of trading experi-
Yarn Association (VCOSA) has the sary troubles.
ence of the seller, to be able to have
following response: * Respecting the commitments in the a safe transaction.
Some reflections of Vietnamese yarn contract, businesses accept to sac- * Choose a reputable partner with a
enterprises (DN) are based on the cur- rifice their interests when the world safe transaction history to sign a
rent general situation. Through the busi- cotton market fluctuates.
contract.
ness trip and field survey of VCOSA * Linking and uniting domestic yarn en-
together with the International Cotton terprises, together with VCOSA to de- Suggestions:
Association (ICA) in October 2022, we nounce cotton trading units of dis- After the visit and survey of VCOSA
have recorded the following informa- trust and violations in the transac- and ICA, synthesizing comments from
tion: tion process. the parties, VCOSA proposed a num-
- Vietnamese enterprises importing * Linking and uniting global yarn en- ber of contents to be able to solve the
cotton from abroad are affected by terprises, together with VCOSA and problem of unfair mechanism between
the unfair compensation mechanism the World Yarn Industry Associations, cotton sellers and buyers. leading to
as stated in the note. Normally, dur- propose and recommend to ICA to unreasonableness in long-term com-
ing the performance of the contract, make reasonable and reasonable ad- mercial transactions:
if the Vietnamese yarn company (un- justments to the set of rules and reg- - The priority and urgent action is to
derstood as the buyer) is late in open- ulations to protect the rights and in- petition the ICA to impose a penalty
ing the Letter of Credit (L/C), com- terests of consumers. and benefits fee on the “Seller” based on the prin-
pensation will be imposed. However, both parties to buy and sell cotton ciple of fairness.
in the opposite direction, the Ship- at the same time instead of favoring - In order for the above action to be
per (understood as the seller) is not only one side of the seller. effective, we, VCOSA and Vietnam-
subject to the same penalty.
* In addition, businesses need to un- ese yarn enterprises fully support and
- Referring to the unfairness, the most derstand and understand the Regu- will contribute to this petitioning pro-
common case is the disadvantage lations and rules in the code of the cess by collective coordination on
(damage) for the buyer is that when International Cotton Association ICA the international level with associa-
the cotton price is low, Vietnamese before making cotton purchases. tions and organizations. competent
enterprises have not opened the LC Refer to the Code of Regulations and authorities in cotton importing coun-
yet, they will definitely be charged a Rules at the link: https://ica-ltd.org/ tries to solve the above problem.

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