Implementation of

contract in foreign trade

 Objectives
 Catching knowledge in
implementation of export and import
contracts
 Learning to prepare a full set of

documents for international payment

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Implementation of export contract
1. Getting export license
 License from Ministry of Commerce or
competent authority
 Ensuring safety in specification, quality
and sanitary
 Making customs clearance only for goods
which are not prohibited or temporarily
prohibited in export and import

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Implementation of export contract
 For specific goods and in specific
period of time, companies must
conform to regulations from
competent authority
 Ex.: rice for export must be gotten

approval from Vietnam Food

Association (VFA)

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Implementation of export contract
2. Implementing tasks in initial period
of payment
 Payment by L/C: asking buyer to
open L/C and checking L/C
 Payment by CAD: reminding buyer to
open trust account at the bank
 Payment by T/T prepaid: reminding
buyer to make transfer on time

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Implementation of export contract
3. Preparing cargo for export
4. Inspecting cargo for export
5. Making customs clearance
6. Contracting for carriage
 For shipment terms: CIF, CFR, CPT, CIP,
DES, DEQ, DDP, DAF, exporter must
contract for carriage
 For shipment terms: EXW, FCA, FAS,
FOB, importer must contract for
carriage
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Implementation of export contract
 Shipping companies and agents:
Vietfracht, Vitranschart, Vosco,
Gematrans, Gemadept, Maersk, APL,
P&O, etc.
7. Delivery of cargo to carrier
 Delivery by vessel: taking Clean B/L
 Delivery by airplane: sending proforma

invoice and taking House Airway Bill

which is issued based on Master
Airway Bill issued to forwarding agent
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Implementation of export contract
 Delivery by container
◦ FCL
◦ LCL
 Deliverythrough LSP (Logistics Service
Provider)

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Implementation of export contract
8. Contracting insurance for export
goods
 Selecting terms to be covered in
insurance contract
 Making request for insurance
 Paying charges and taking insurance
certificate

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Implementation of export contract
9. Making documents for payment
 Bill of exchange
 Clean B/L
 Insurance certificate
 Commercial invoice
 Quality certificate
 Quantity certificate
 Origin certificate
 Packing list
 Phytosanitary certificate
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Implementation of export contract
 Notes
for making documents for
payment by L/C
o All documents must be made based on
information stated in L/C even mistakes in
spelling of some words if they are not
necessary to make amendment
o B/E must be made for the sum of 100% of
invoice value
o Exporter must endorse B/L if it is stated in
L/C to make “To order” and “blank
endorsed”
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Implementation of export contract
o If cargo is loaded over quantity stated in
L/C, the exporter should get agreement
from the importer. In this case, documents
for payment are made with two sets as
following:
One set of documents to be made as per
requirements of L/C
One set of documents for excess cargo
for payment by D/A or D/P or T/T, etc.

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Implementation of export contract
10. Claim
 Claim from the seller
 Claim from the buyer
12. Liquidation of contract

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Implementation of import contract
1. Getting import license
2. Implementing initial stages of
payment
 Payment by L/C
o Making request for issuing L/C
o Completing pledged amount
3. Contracting for carriage
 When importing with terms such as EXW,
FAS, FCA, FOB

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Implementation of import contract
4. Contracting for insurance
 When importing with following terms:
EXW, FAS, FCA, FOB, CFR, CPT
5. Making customs clearance
6. Taking delivery
 Cargo in LCL
 Cargo in FCL
 Cargo for whole vessel or with large
quantity

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Implementation of import contract
7. Inspecting cargo
Making Letter of Reservation and asking for
Survey Report
8. Making claim
 Making claim to the seller
 Making claim to the carrier
 Making claim to insurance agent
 Essential documents: original insurance
contract, original B/L, copy of invoice,
certificate of quality and quantity, letter
of damages to be compensated
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Implementation of import contract
Other documents to be enclosed:
 For damaged or lost cargo: inspection
certificate issued by insurance agent, COR
(Cargo Outturn Report)
 For shortage of cargo: ROROC (Report On
Receipt Of Cargo), report on shortage of
cargo issued by VOSA (Vietnam Ocean
Shipping Agency)
 For general damages: document stated
general damages of the ship’s owner,
calculation of costs allocated, other
concerning documents
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Implementation of import contract
 For cargo to be damaged totally: notice
of total damages issued by the carrier,
confirmation of the carrier for “Clean
on Board” cargo
10. Making payment
11. Liquidation of contract

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