UNIVERSITY OF ECONOMICS – DA NANG UNIVERSITY

INTERNATIONAL TRADE TRANSACTION

GROUP ASSIGNMENT
EXPORT CONTRACT AND PROCEDURE IMPLEMENTATION

Class: 47K01.1
Group: 2
Members: Pham Thanh Binh
Phan Thi Thu Hien
Dam Thi Le Na
Phan Thu Ngan
Nguyen Thi Hong Ngoc
Nguyen Ngoc Minh Tam

Danang, October 25th 2023

 TABLE OF CONTENTS
A. CONTRACT DRAFTING...............................................................................................................1
B. CHECKING ERROR AND ANALYZING EACH DOCUMENT..............................................7
1. Checking error...............................................................................................................................................7
2. Analyzing Each Document...........................................................................................................................9
2.1. Bill of Lading (B/L)..............................................................................................................................9
2.2. Certificate of Quality..........................................................................................................................10
2.3. Certificate of Origin (C/O)..................................................................................................................11
2.4. Fumigation Certificate........................................................................................................................11
2.5. Phytosanitory Certificate.....................................................................................................................12
2.6. Commercial Invoice............................................................................................................................12
2.7. Nutrition Report..................................................................................................................................13
2.8. Weight Memo/ Packing List...............................................................................................................13
2.9. Health Certificate................................................................................................................................13
2.10. Cargo Insurance Policy...................................................................................................................13
C. EXPORT PROCEDURES.............................................................................................................14
1. Ask the buyers to do remittance application...............................................................................................14
2. Prepare export commodities........................................................................................................................14
3. Arrange carriage..........................................................................................................................................14
4. Apply for pre-shipment inspection.............................................................................................................15
5. Purchase cargo insurance............................................................................................................................15
6. Implement export customs clearance..........................................................................................................15
7. Deliver goods to carrier...............................................................................................................................16
8. Prepare documents and send to buyers.......................................................................................................16
A. CONTRACT DRAFTING
EXPORT CONTRACT

No: R11/KG-ADC/2015
Date: MAR. 08, 2016

BETWEEN: KANEMATSU CORPORATION

Address: 2-1, SHIBAURA,1-CHOME, MINATO-KU, TOKYO 105-8005 JAPAN

Tel: 092715-7820 Fax: 092715-7830

Represented by Mr. Satoshi Mori; Position: Deputy General Manager of Hanoi and
Haiphong Representative Office

Hereinafter called THE BUYER

AND: ALLIED DEVELOPMENT COMPANY

Address: 101 PHAN DINH PHUNG ST. NINH KIEU DIST, CAN THO CITY
VIETNAM

Tel: 07103659999; Fax: 07103753477

Represented by Mr. Hoang Quoc Lap; Position: IM-EX Sale Manager

Hereinafter called THE SELLER

The above parties hereby agreed that Seller shall sell and Buyer shall buy the following
commodity with the following terms and conditions:

Article 1. COMMODITY: VIETNAM JASMINE RICE 5% BROKEN

Article 2. QUALITY: By specification

Broken (basic ¾) 5.0% max

Purity 92% min

Moisture 14.0% max

Foreign matter 0.1% max

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 Damaged kernels 0.5% max

Immature kernels 0.2% max

Yellow kernels 0.3% max

Chalky kernels (basic ¾) 2.0% max

Glutinous kernels 0.4% max

Red and red streaked kernels 0.5% max

Paddy kernels 1 grains/kg max

Average length of kernels 6.8 mm min

Milling degree Well milled, double polished and

sortex

Crop Winter-Spring Crop, 2015

Quality of goods is to be determined at the loading port by Vinacontrol CanTho. Inspection

charges shall be borne by the Seller.

C/Q issued by Vinacontrol shall be final and binding both parties.

Article 3. QUANTITY:

Net weight: 50.000 MTS

Gross weight: 50.200 MTS

Number of bags: 2000 bags

Article 4. PACKING & MARKING

Packing: Packing in new, PP bags with pe inner liner, containing 25kgs net weight each bag, all
the bags had their packing dry and intact

Marking: Buyer’s Marking

- SHIPPING MARKS:

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  Name of consignee: China Resources Ng Fung International Distribution Co.,Ltd

 Number of contract: R11/KG-ADC/2015

 Port of destination: HONGKONG

 Packing number: NOS.1-20

- HANDLING MARKS

 Protect from heat and radioactive sources

 Stacking limitation

 Keep dry

- SUPPLEMENTARY MARKS

 Net weight: 25 kg

 Gross weight: 25,10 kg

 Measurement: 25 x 75 cm

 MADE IN VIETNAM

Article 5. SHIPMENT

Time of Shipment: Mar 08th, 2016

Shipment: CIF, Hong Kong, Incoterm 2020

Port of loading: Ho Chi Minh, Vietnam

Place of delivery: Hong Kong

Vessel name: VAN MANILA V.N018

Quantity of goods transported: two containers (maximum 30.000 MTS of each container)

Partial shipment: not allowed

Transshipment: allowed

Notice of shipment: Within 2 days after date of B/L, the Seller shall notify by cable or fax to
the Buyer the following information:
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  Name of the vessel
 Date of shipment
 B/L number
 L/C number
 Commodity;
 Quantity
 Quality of goods

Discharging:
 When Notice of Readiness tendered before noon. Lay time shall commence from 13:00
on the same date.
 When Notice of Readiness tendered before afternoon. Lay time shall commence from
08:00 on the next day.

Article 6. PRICE

Price: USD 495 / MT CIF, Hong Kong, Incoterm 2020

Total price: USD 24,750.00 (in words: United States dollars twenty four thousands seven
hundred and fifty only)

Article 7. PAYMENT

Payment shall be made by Telegraphic Transfer (T/T)

Advanced payment: 100% of the total price before the day of B/L
Payment recipient account details:
⦁ Account holder’s name: ALLIED DEVELOPMENT COMPANY
⦁ Address:101 Phan Dinh Phung ST., Tan An Ward, Ninh Kieu Dist., Can Tho City,
Vietnam
⦁ A/C number: 011.1.37.002042.4
⦁ With Joint Stock Commercial Bank For Foreign Trade of Vietnam, Can Tho Branch
( VIETCOMBANK CANTHO )
⦁ Address: No 7 Hoa Binh Avenue, Ninh Kieu Dist., Can Tho city Vietnam
⦁ Swift code: BFTVVNVX011

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Article 8. INSURANCE

The seller must obtain at its own cost cargo insurance complying with the cover provided by
Clauses (A) of ICC. The insurance shall cover “all risk” for 110% of Invoice value.

Insurance certificate showing claim payable at HongKong by BIDV Insurance Corporation

(BIC).

Article 9. ARBITRATION

Any dispute which the parties are unable to resolve amicably shall be determined by Legal
Solution in Vietnam International Arbitration Center - VIAC in accordance with its rules of
Arbitration.

Article 10. REGULATIONS ON FORCE MAJEURE

Should any circumstances arise preventing either party from full or partially carrying out its
obligations under the contract (namely: acts of gods, acts of the elements, fire, war, military
operations of any nature, blockade or prohibition of export, import), the period stipulated for
the performance of the contract shall be extended accordingly.

In the event of these circumstances prevailing for more than fulfilling its obligations under the
contract, and in this case, neither party shall be held responsible for non-fulfillment of their
respective obligations under this Agreement nor party shall be entitled to indemnity of any loss
it may sustain.

The party unable to carry out its obligations under the contract shall advise the other party of
the commencement and termination of the circumstances preventing the performance of the
contract within one month.

A certificate issued by the Chamber of Commerce of the sellers’ or buyers’ country shall be
sufficient proof of the operation and the duration of such circumstances.

If the force majeure conditions continue beyond six months, the parties shall jointly decide
about future action.

Article 11. CLAIM

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The Seller has the ability for processing the inspection of goods before shipment and to bear all
expenses incurred.

In the case of loss or damage after the goods land at the port of arrival all by the Buyer shall be
made a claim for quantity must be presented two months after the arrival of goods at the Port, a
claim for quality within three months after the goods at the Port, and shall be confirmed in
writing together with survey report of the Hong Kong goods inspection office.

The survey report of the Hong Kong goods inspection office should be regarded as final.

Whenever such a claim is to be proved as of the seller's responsibility. The seller shall settle
without delay.

This contract becomes valid after the buyer has the import license from Hong Kong
Customs and Excise Department. This contract is made in Can Tho city in 06 English originals
of the same value of which 02 for the Seller and 04 for the Buyer. Any amendment to this
contract must be made by fax or in writing and confirmed by both parties

For and on behalf of the Buyer For and on behalf of the Seller

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B. CHECKING ERROR AND ANALYZING EACH DOCUMENT
1. Checking error
Contract Payment
Consigngee B/L No Voy No Seal number Date Shipper Commodity Quantity Invoice No Buyer No term

WHLU2792090
China VAN 20SD86 WHL9226830 Allied Vietnam 2000 bags
Resources 0396A MANILA WHLU2796290 Mar 08 Development jasmine rice NW: 50200
Bill of Lading Ng Fung 05247 N018 20SD86 WHL9226824 2016 Company 5% broken MTS

China VAN Allied Vietnam 2000 bags

Cert of Resources 0396A MANILA Mar 08 Development jasmine rice NW: 50200
Quality Ng Fung 05247 N018 2016 Company 5% broken MTS

WHLU2792090/
China VAN WHL9226830 Allied Vietnam 2000 bags
Resources MANILA WHLU2796290/WHL Mar 08 Development jasmine rice NW: 50200 WR/
Cert of Origin Ng Fung V.N018 9226824 2016 Company 5% broken MTS 20160308/012

China VAN Allied Vietnam 2000 bags

Fumigation Resources 0396A MANILA Mar 08 Development jasmine rice NW: 50200
Cert Ng Fung 05247 V.N018 2016 Company 5% broken MTS

China VAN Allied Vietnam 2000 bags

Phytosanitary Resources 0396A MANILA Mar 08 Development jasmine rice NW: 50200
Cert Ng Fung 05247 V.N018 2016 Company 5% broken MTS

China VAN Allied Vietnam R11/KG-

Commercial Resources MANILA Mar 08 Development jasmine rice NW: 50200 WR/ Kanematsu ADC/
Invoice Ng Fung V.N018 2016 Company 5% broken MTS 20160308/012 Corperation 2015 TT

China VAN Allied Vietnam

Nutrition Resources MANILA Mar 08 Development jasmine rice WR/ Kanematsu
Report Ng Fung V.N018 2016 Company 5% broken 20160308/012 Corperation

Weight Memo China VAN Mar 08 Allied Vietnam Tare weight: WR/ Kanematsu TT
Resources MANILA 2016 Development jasmine rice 0.200 MTS 20160308/012 Corperation
Ng Fung V.N018 Company 5% broken GW : 50.200
MTS

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 NW: 50.000
MTS

China VAN Allied R11/KG-

Resources MANILA Mar 08 Development WR/ Kanematsu ADC/
Health Cert Ng Fung V.N018 2016 Company 20160308/012 Corperation 2015 TT

China VAN Allied Vietnam 2000 bags

Cargo Resources 0396A MANILA Mar 08 Development jasmine rice NW: 50200 WR/
Insurance Ng Fung 05247 V.N018 2016 Company 5% broken MTS 20160308/012

matching

needs revision

insufficient

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 2. Analyzing Each Document
2.1. Bill of Lading (B/L)
As illustrated, a Bill of Lading (B/L) NO. 0396A05247 was issued by a Carrier Wan Hai
Lines LTD to a shipper also the seller exporting Vietnam Jasmine Rice being the Allied
Development Company in Can Tho city. This Bill of Lading (B/L) could be considered as a
confirmation of the carrier that goods were received in an acceptable condition as required and
ready to be shipped to the Consignee who was an importer in Hong Kong.

a. A description of the goods

The B/L identified some information related to the goods being exported, including Net
Weight and Gross Weight of those being 50.000 MTS and 50.200 MTS respectively which
means the actual weight of the goods was the former while the tare weight of an empty
container was 200 MTS.

Moreover, this B/L is a non-negotiable BoL, demonstrating that only one specific
consignee, buyer or entity named and specified in the bill can receive the goods which can not
be transferrable to any other parties.

b. Agreed terms and conditions for the transportation of the goods

This Bill of Lading contained some information, terms and agreements related to the
transportation of the goods. To be more specific,

- Voyage / Ocean vessel:

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 The voyage / ocean vessel was NO.18 in which two parties agreed to hire the whole or
part of a vessel and crew from a loading port “Ho Chi Minh, VietNam” on 08 March, 2016 to a
discharging port “Hong Kong”.

- Full loaded containers (FCL):

As mentioned in the B/L, the seller was under its contract for carriage, with two
containers containing the goods in particular. These two FCLs’ Marks and Numbers were
WHL9226830 and WHL9226824. Also, according to the CIF Incoterm 2020 agreed in the
contract, the exporter must contract for and pay the cost and freight necessary at Ho Chi Minh
city in the exporting country to bring the goods to the named port of destination.

2.2. Certificate of Quality

Certificate of Quality clearly defined the main characteristics of the goods and the quality
of the commodity inspected by a third-party agent, Vina Control in particular. The inspector
took a sample of VietNam Jasmine Rice 5% Broken randomly and analyzed it in the laboratory
on March 06, 2016.

Furthermore, the inspection method of VinaControl when examining this commodity was
by Standard/ Category. Standards TCVN 5644:2008; TCVN 1643:2008 are viewed as the
regulations, approved by the Vietnamese authority, on quality, production, packaging and
inspection methods of rice.

In terms of the results of the inspection, the rice was free from live insects/weevils,
foreign/bad odor as well as met other specifications of Vietnam export standard.

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 2.3. Certificate of Origin (C/O)
The document was issued by a Competent Authority named Vietnam Chamber of
Commerce and Industry, Can Tho Branch which aimed to declare the country or the origin of
the exported goods on the basis of relevant regulations and requirements on origin.

In particular, the type of C/O was Form B, as No GSP. C/O Form B grants to goods
originating from VietNam exported to other nations in which VietNam doesn’t have GSP
incentives or in case with GSP, but the shipment does not meet the criteria for eligibility.
Because there is no treaty or trade agreement for reduced tariffs between Viet Nam and China,
the C/O was under the Form B, exporting for all countries.

In terms of the Origin Declarification, the document declared that Jasmine Rice was
produced in Vietnam and complied with requirements related to the country of origin specified
for goods exported to Hong Kong.

2.4. Fumigation Certificate

First of all, the objectives of the fumigation process are to identify whether or not the
consignment of goods has gone through fumigation treatment. Especially for agricultural
products, there is a need to obtain a Fumigation Certificate authorized by official entities.
Therefore, before exporting VietNam Jasmine Rice to another country, the exporter certified

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that cargo has already undergone the fumigation treatment conducted by a Vietnam Fumigation
Company, in order to:
 Pest control and Disease Prevention
 Compliance with Import Regulations
 Safety of Goods and Containers

To be more specific, the following information must be checked:

 Fumigant used: Photoxin (ALP)
 Dosage: 09 GRAMS/M3
 Duration of treatment: 72 hrs
 Place of fumigation: in containers after completion of loading with voyage NO.18 and
B/L NO. 0396A05247
 Date fumigated: 05 March, 2016

2.5. Phytosanitory Certificate

This document declares the plants and materials being transported by cargo contain no
pets or suffer from no disease. Therefore, through disinfection treatment by the Vietnamese
Government authority, the goods were considered to be free from pests and conform to the
requirements indicated by the reference document along with the current Phytosanitory
requirements of the importing contracting party and importing country Hong Kong.
2.6. Commercial Invoice
This document is used for payment between the buyer and seller, requiring the buyer to
pay the correct amount stated to the seller as USD 24,750.00 for each 50 MTS of VietNam
Jasmine Rice 5% Broken.
Terms of Payment: TT which means that Telegraphic Transfer
The Swift code mentioned in this document was referred to the Joint Stock Commercial
Bank for Foreign Trade of Vietnam CanTho Branch (Vietcombank CanTho) as
BFTVVNVX011 but the correct one is BFTVVNVX 058.
Moreover, the currency of payment should be also mentioned in this document.
2.7. Nutrition Report

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 This document demonstrates the nutrition elements of Jasmine rice 5% broken from
Allied Development Company that follow what they report (Energy, Protein, Total Fat, total
Carbohydrate, Sodium)
When it comes to marking, it was made by the Buyer – Kanematsu Corporation in this
document.
2.8. Weight Memo/ Packing List
This document shows how the goods are packed. Therefore we could the below
information:
 Description of goods: VIETNAM JASMINE RICE 5% BROKEN
 Quantity: 2,000 Bags; Net Weight: 25kgs/Bag; Gross Weight:25.10kgs/Bag
 Packing condition: Packed in new, PP bags with PE Inner Liner, containing 25kgs Net
Weight each bag. All the bags had their packing dry and intact.

2.9. Health Certificate

This document is the official confirmation to the buyer that the rice lot is fit for human
consumption. However, there have not mentioned some points:
 The manufactured date and expiry date
 No mention on bill of lading number

2.10. Cargo Insurance Policy

This document is regarded as insurance that generally protects shipments from loss,
damage or theft while in transit. In terms of the buyer’s choice, they chose the widest range of
cover for this load, more specific is Institute Cargo Clauses A (CL252-1.01.1982). Moreover,
they also chose Marine Cargo Open Policy which would be provided coverage for all cargo
shipped during the policy period.

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C. EXPORT PROCEDURES
1. Ask the buyers to do remittance application
Initially, the Vietnamese sellers need to ask the buyers to do a remittance application in
the remitting bank. After receiving 100% of the total price from the issuing bank, the exporter
conducts the next steps.
2. Prepare export commodities
- Sellers collect/ produce/ process rice

- Parking: Based on contract stipulations, nature of the commodity, mode of transport,

weather regulations of the import country, saving packaging materials and utilizing
container’s space, the Vietnamese exporters prepare their package of rice. According the
available document, the sellers must check rice packing in conformity with these
stipulations:
 Packed in new, pp bags with pe inner liner containing 25kgs net weight each bag
 All bags had their packing dry and intact

- Marking
3. Arrange carriage
- Carriage contract
CIF is the delivery term that is used in this contract. Therefore, Vietnamese sellers must
assume the responsibilities to arrange carriage. There are three kinds of carriage contract,
including:
 Freight forwarding service
 NVOCC (non - vessel operating common carrier)
 Shipping lines.

The sellers could choose one of them to export rice.

- Types of charter

 Based on available information, Voyage terms are used in arranging carriage from
sellers, which means that the seller hires the whole of a part of the vessel and crew for a

14
 voyage between a load port (Ho Chi Minh city, Vietnam) and discharge port
(Hongkong) from the carriers.

 Because of the large quantity of rice (50.000 MT), the sellers hire two containers (the
contract stipulation) to export rice.

 In this type, the charterer - Vietnamese exporter would pay the vessel owner on a per ton
or lump - sum basis. In addition, the owner would pay the port costs, fuel costs and crew
costs.
4. Apply for pre-shipment inspection
According to contract, the sellers conduct pre - shipment inspection with the supervision by
Third - party agents and Government Authority.

- Third - party agents:

 Vinacontrol would inspect the Certificate Of Quality
 Vietnam Fumigation Company Can Tho Branch would inspect the Fumigation
Certificate
- Government Authority:
 Vietnam Chamber of Commerce And Industry Cantho Branch would inspect the
Certificate Of Origin
 The Ministry Of Agriculture And Rural Development would inspect the Phytosanitary
Certificate.
5. Purchase cargo insurance
The company must buy the C - insurance at least in the CIF contract. However, the
company had already bought A - insurance to cover all risks
6. Implement export customs clearance
Because of the CIF delivery term, the exporters would do customs clearance. There are 3
steps they need to do, including: customer declaration => Receive the classification of customs
declaration form

- Customs declarations: The sellers choose either of these options: Traditional declaration
or E - customs declaration.

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  Traditional declaration
(1) Prepare a dossier of documents (customs declaration form,contract, commercial
invoice, packing list…)
(2) Submit at the relevant Sub-department of Customs
 E-customs declaration
(1) Input information of e-customs declaration based on the dossier of documents to
CD software (ECUS)
(2) Receive the declaration tax rate number
- Receive the classification of customs declaration form
 Green - cleared
 Yellow – inspect the dossier of documents
 Red - present both the dossier of documents and goods for customs inspection
 Pay customs duties and fulfill other financial obligations (if any)
 Clear the goods and carry out post-clearance inspection

- Liquidate the customs declaration form and export the goods

 Green – email the customs declaration form to the relevant Sub-department of
Customs
 Yellow – submit the documents and customs declaration form for inspection and
stamp, submit the stamped customs declaration form to the customs officers in charge
for liquidation
 Red - take the cargo to the customs inspection place
7. Deliver goods to carrier
FLC containers might be used in this contract because of the high quantity of rice exported
by Vietnamese partners. Therefore, there are 4 steps that Vietnamese sellers must do:
 Receive empty container from C.Y (container yard)
 Packing goods into container, sealed under supervision of Customs authority
 Transporting container to C.Y, delivered to carrier
 Received for shipment B/L

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 8. Prepare documents and send to buyers
The sellers need to prepare the dossier of required documents for buyers to import goods
and make the payment, including:
 Commercial Invoice
 Certificate of Origin
 Packing List
 Certificate of quantity, weight, quality
 Inspection Certificate
 Transportation document
 Insurance Certificate
 Bill of lading
 Other documents if the buyers require
There are a lot of ways for exporters to send documents to importers. The exporters could
use services provided by Express delivery companies such as Viettel post, EMS Vietnam. The
exporter should prepare this information before sending the document.
 Prepare information including the recipient's exact address, name and contact phone
number.
 Sender's information and phone number.
 The specific number of documents that need to be sent.

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