Over the past year or so, the world has been tormented by the Covid-19 pandemic. Worldwide traders turn to Vietnam to seek the chance of purchasing medical devices, typically medical gloves. However, there are many international traders becoming victims of frauds when purchasing medical gloves in Vietnam since it is not easy to identify the provider of the top or trusted medical glove in Vietnam. The article shall point out legal notes to purchase and sale of medical gloves in vietnam.
Presently, the disease has spread to more than 200 countries and territories, infected more than one hundred million people, and resulted in the deaths of more than two million people making the economy and people’s life especially difficult.
The use of medical protective equipment such as medical masks and medical gloves to avoid contact with others is one of the most effective measures to limit the transmission of the disease before vaccines were disseminated. Therefore, the demand for these products is increasingly soaring in the world and this is one of the reasons that makes Vietnam the central point of sales of medical protective equipment, especially medical gloves like the present.
Indeed, health facilities in countries with high death tolls such as the US and Europe, Korea and Japan currently need a large number of masks and medical gloves to avoid infection. Even though the Covid-19 vaccine will be widely available globally next year, people will still need to wear medical gloves and masks when injecting vaccines for people. This makes the demand for these products risen in these countries. Besides, there are many people who are also in need of access to these types of equipment in order to limit infection.
The demand is great but these countries’ medical protective equipment manufacturers are inherently unable to meet this demand since these items are mainly imported from other countries by major countries, especially in Malaysia – the country dominates the global rubber glove market with a 70% market share. But even with maximum capacity, Malaysia can not meet the extremely enormous demand of these countries.
Thus, Vietnam has become the focus of medical glove deals because Vietnam is a country with a large rubber commodity and propitious raw materials stock which created advantageous conditions for medical glove production there. Besides, Vietnam is also one of the countries that can produce a large number of nitrile powder-free gloves. The European and American, Korean and Japanese countries are very interested in this product because powdered gloves can cause allergies to the people of these countries in use.
Nonetheless, Vietnam is also unable to meet the huge demand which makes this item even more scarce. However, taking advantage of the scarcity and immense purchasing demand from companies in the US and Europe, several Vietnamese businesses have committed acts with signs of fraud with very sophisticated tricks:
Firstly, traders from Vietnam offer gloves purchasing deals, take goods from manufacturers, and commit to having the right quantity and quality to buyer, but their products are practically empty or very few. Thus, at the time of delivery, there is still no goods to deliver or insufficient of goods and does not meet the quality as committed. The delay shall be lengthened without any specific commitment from the traders.
Secondly, there are many parties who take advantage of their own production facilities and certificates such as ISO 13485: 2016 certificate, production facility certification, FDA and CE to gain trust from people, so the buyer ordered a large quantity of goods from the manufacturing facility.
However, in our opinion, these certificates are not too difficult to obtain and we have also visited many production facilities, and basically, even though they have their own production facility, the production facility is not enough capacity to do such a large order. Therefore, these parties have purchased fake gloves with poor quality, then label their logos to sell these gloves to buyers.
Typically, the Boowoo One Member Limited Liability Company fraudulently appropriated the property of Mr. Philip Leigh Mckenzie when he ordered to print about 1,000 cartons and some boxes with the logo of Boowoo Glove and bought about 10 cases of gloves, packed into several carton boxes with Boowoo Glove brand or empty box (no medical gloves inside). The company also had the act of shirk and no delivery when no actual item is available.
Thirdly, another trick of some manufacturers in Vietnam is that after receiving money, they can start investing in developing more their own factories and buying raw materials for production, but the materials itself are not enough to produce and provide to the buyer.
This leads to these manufacturers having no goods to be delivered to buyers but they still do not pay back the money and find ways to delay payment. And maybe after receiving the money of another order, they take the same amount of money to pay and create a chain that keeps taking money from one person to pay another. Many international purchaser have faced the same situation from one manufacturer in Vietnam which is a symbol to show that the Vietnamese traders are doing it purposely.
Fourthly, taking advantage of the lack of knowledge of Vietnamese laws and the Buyer’s desire to buy medical gloves from Vietnam, the seller urges the Buyer to sign the sale and purchase contracts that are not strictly legal on the legal basis or even do not sign the contract but only transfers money to buy goods from the Seller.
This activity creates conditions for the fraudulent seller to appropriate property but the buyer does not have enough legal basis to recover the money and initiate lawsuits or denunciations of fraudulent behavior.
Fifthly, another reason that makes it difficult for the buyer to recover money is that with the motive of cheating to take the property, many sellers have used the money that the buyer has deposited and used it for other purposes other than producing goods or looking to buy goods to sell to the buyer.
At this time, the buyer can hardly claim a refund because the seller has no longer actually had that amount.
How to buy medical gloves in Vietnam? With our practical experience, we often advise clients to proceed as follows to limit the buyer’s fraud when purchasing medical gloves in Vietnam:
Firstly, before signing the contract, the buyer should implement due diligence (DD) to their possible contractors/providers/sellers of glove in Vietnam.
The purpose of the DD is to check legal documents to see whether they are the actual traders or manufacturers of medical devices including medical gloves in Vietnam. In fact, a manufacturer usually must have enough legal documents such as CE, FDA, ISO and certification of the production facility.
Secondly, after implementing DD, the buyer can appoint another trustworthy party to check whether the trader has the actual products or not?
For manufacturers, check whether their production facility have the capacity to produce orders and they have actual stock or not? If the seller of gloves in Vietnam is a trader, we should go through many documents to show their real ability or real connection with the manufacturers.
Thirdly, the Buyer should make contracts with strict terms or should consult a lawyer to ensure benefits in the contract. In addition, the LC clause should be included in the contract. This is one of the payment methods to limit the risk for the buyer because only when delivering all the documents and products in LC terms specified, the seller can receive the money. The fact shows that many other parties taking the reason of lacking cash and asking their buyers to deposit 20% or 30% of the total value of the contract. After receiving, they shall find the reasons to delay their delivery. Therefore, if you have to deposit, you should take security process to make sure that you could claim back the money when there is any legal dispute.
Besides, the law to resolve the sale and purchase contract disputes should be chosen as Vietnamese law, because if the buyer chooses the law of another country, the buyer will have difficulty in enforcing judgments after settlement by foreign jurisdiction Authority. Regarding the sale purchase agreement of medical gloves, normally the breach party of the contract is the Vietnamese party. In addition, a provision on international arbitration in Vietnam that has jurisdiction to resolve these disputes will help the Buyer reduce the time to settle the dispute because it usually takes a long time to settle in the Court.
Fourthly, before the goods arrive at the port, SGS should have random inspection to make sure the goods are of the right quality and quantity as committed.
Fifthly, during the process from delivering from the seller’s warehouse, checking the goods through SGS and the goods being delivered to the port, there should be the presence of the buyer’s representative to oversee the process.
The above are fraudulent acts as well as a solution to best protect their rights and interests as well as limit this behavior.
Now ASL LAW is conducting further investigation on the fraud traders/manufacturers in Vietnam to treat them under a criminal case. If you are an victim of any fraud/scam traders/manufacturers in Vietnam, please contact us for further information or collaboration.