Vietnamese enterprises have reported huge losses as a result of trade-based financial crime according the Vietnam Association of Seafood Exporters and Producers (VASEP).
The association has now written to its members warning them against seafood trade fraud.
Several businesses have been cheated, with losses amounting to hundreds of thousands of US dollars due to transactions with a Canadian firm called Echopack according to VASEP.
It alleges that Echopack colluded with a New Zealand-based financial services provider to take delivery of goods but failed to make payments.
According to VASEP, Echopack’s scheme is based on using one signature to open a letter of credit (L/C) at the new Zealand-based financial services provider and a different signature in the contract.
The L/C terms however require the signatures in the L/C, the contract and the payment request documents to be the same.
According to VASEP, the financial services provider knew that Echopark’s documents were inappropriate but nevertheless allowed the Canadian importer to obtain a bill of lading so shipments could be delivered.
Nguyen Hoai Nam, deputy general secretary of VASEP, said this is not the first time the association has alerted its members about trade-based financial crime in the seafood market.
In 2015 alone, Vietnamese companies lost about US$8 billion due to trade fraud or irrecoverable debts.
Categories: Trade Based Financial crimes News