VietNamNet Bridge - Entrustment of export and import of goods usually causes disputes between the mandator and mandatory. Enterprises need to pay attention when entering into contracts, selecting partners and other matters to best protect their own rights and benefits.

Entrustment of export and import of goods (hereinafter referred to as “export and import entrustment”) is governed by the Commercial Law.

On the basis of the disputes PLF recently received, we have become aware that enterprises often encounter quite basic issues due to lack of agreement in contracts, agreement that is insufficient or not in accordance with Vietnamese and international laws, specifically as follows:

1.    The parties carry out export and import entrustment upon an oral agreement in lieu of a written contract (or in other forms of equivalent legal validity).

2.    Mandated contracts are entered into by and between incompetent persons as prescribed by law.

3.    Compensation liability, consequence remedy, time and method of compensation are not stated in mandated contracts.

4.    No resolution mechanism is established for when the exported/imported goods encounter customs-procedures-related issues.

5.    Unaccepted goods: The law does not provide for cases where the mandatory refuses to receive the goods although the mandatory has fulfilled the contractual obligations. Therefore, the parties should reach a detailed agreement on delivery obligations, responsibilities of both parties and direction to deal with the problems in this case.

6.    Rights and obligations of each party whenever a dispute arises from or related to the contract and choice of dispute settlement body.

Furthermore, it is also essential for enterprises to give heed to matters that may arise after giving or receiving mandate:

Subjects to entrust and undertake entrustment: Export and import entrustment is carried out between traders. Vietnamese organizations and individuals other than traders may, on the basis of contracts signed in accordance with the provisions of law, entrust import or export of goods to meet their needs.

Entrusted goods: All goods, except for those on the list of goods banned or suspended from export and goods on the list of goods banned or suspended from import. In addition, the entruster (mandator) or the entrustee (mandatory) must obtain import or export permits before signing entrustment or entrustment undertaking contracts.

Export and import mandate contract: Export and import entrustment must be made in writing.

PLF – LAW FIRM