Businesses urged to strengthen risk management in import-export operations

Import-export activities offer significant growth opportunities for both businesses and the economy. However, amid increasingly volatile global developments, they also expose enterprises to a wide range of emerging risks and challenges.

Wood products manufactured by Dong Nai enterprises are showcased at an international export exhibition in Ho Chi Minh City.

To minimize losses and safeguard their interests, businesses need to proactively manage risks and prevent disputes arising from international trade contracts and cross-border transportation activities.

Making effective use of force majeure provisions

In the context of globalization, economic volatility, global health crises, and geopolitical upheavals have increased disputes arising from international commercial contracts, especially those concerning the performance of obligations when circumstances change abnormally. Businesses need to pay close attention to force majeure provisions and hardship clauses to secure an exemption from contractual liability, as this is a critical matter.

According to Phan Van Chau, Chairman of the Dong Nai City Jurists Association, Vietnam's Commercial Law provides clear regulations on the circumstances under which parties may be exempt from liability for breaches of contract. Among them, force majeure events constitute one of the most important legal grounds for liability exemption. However, the occurrence of a force majeure event does not automatically release a party from all contractual responsibilities. Businesses must demonstrate that the event genuinely affected their ability to perform contractual obligations and that all required legal procedures have been properly followed.

Equally important, the affected party must promptly notify its counterpart in writing of the event and its potential consequences. Failure to provide timely and proper notice may result in liability for damages despite the existence of a force majeure event.

Similarly, Nguyen Thi Hong Ngan, Head of the Legal Affairs Committee of the Vietnam Logistics Business Association, noted that wars and armed conflicts are generally recognized as force majeure events in international transportation.

Recent conflicts around the world have severely affected numerous shipping routes. Many shipping lines have been forced to reroute vessels through alternative corridors, leading to sharp increases in freight costs. In some cases, the additional expense has amounted to several thousand US dollars per container. In such situations, route changes are generally considered lawful because they stem from force majeure circumstances beyond the control of transport operators.

To strengthen competitiveness and ensure the sustainable development of import-export activities, the Department of Industry and Trade will continue coordinating efforts to promote awareness of international trade and logistics regulations, improve risk management capacity, encourage businesses to use professional consulting, insurance, and logistics services, and accelerate the application of digital technologies in supply chain management.

Tran Duong Hung, Deputy Director of the Dong Nai Department of Industry and Trade

Strengthening risk management capacity

Exporters commonly face risks such as changing market demand, products failing to meet technical standards, contractual disputes, and delayed payments. Meanwhile, importers may encounter supply chain disruptions, exchange-rate volatility, rising transportation costs, and excessive dependence on a limited number of suppliers. These challenges require businesses to integrate risk management into their daily operations. Conducting thorough due diligence before signing contracts, selecting appropriate payment methods, and carefully controlling provisions related to delivery, insurance, and contractual responsibilities can significantly reduce the likelihood of disputes.

When disputes arise, businesses should also carefully consider the most suitable dispute resolution mechanisms for logistics and international transportation activities.

According to lawyer Nguyen Duc of the Dong Nai City Jurists Association, many Vietnamese businesses still tend to bring disputes before courts, whereas foreign companies generally regard commercial arbitration as an effective dispute resolution mechanism.

According to lawyer Nguyen Duc, commercial arbitration offers several advantages, including flexible procedures, faster processing times, and a strong emphasis on goodwill and conciliation between the parties. Although arbitral awards are conducted outside the court system, they still have legal force equivalent to court judgments, so businesses should consider using this mechanism to facilitate their operations. Businesses should also pay attention to drafting arbitration clauses from the contract signing stage to establish favorable legal grounds if disputes arise.

Experts also stress that unexpected incidents must be handled proactively and professionally. In relation to cargo insurance, Hoang Anh Phuoc, a member of the Legal Affairs Committee of the Vietnam Logistics Business Association, noted that one of the most common mistakes made by businesses is admitting liability too quickly when an incident occurs. In reality, liability should be determined only after investigations, assessments, and legal reviews are complete. Therefore, businesses should avoid admitting liability prematurely before the causes of an incident and the responsibilities of the parties involved have been clearly determined, as doing so could lead to unnecessary compensation obligations and weaken their legal position in subsequent proceedings.

By V.The – Translated by M.Nguyet, Minho