Vietnam advised to join international trade convention

12/06/2013    234

Experts at a seminar on the Convention on Contracts for the International Sale of Goods (CISG) held in HCMC on Tuesday urged Vietnam to join the convention to assist local enterprises in global trade.

Trading between Vietnam and other countries will grow stronger while enterprises will have more convenience in international trade, especially small and medium enterprises (SMEs), they said at the seminar on “CISG –The Rule of Law”. The event was held by EPLegal Limited, VCCI and the Foreign Trade University with the support of EuroCham, CISG Advisory Council and United Nations Commission on International Trade Law (UNCITRAL).

With effect from January 1, 1988, CISG has become one of the most popular multilateral conventions on international trade with 74 member states including economic powers such as the U.S., France, Germany, Australia, and Japan.

Since Vietnam joined the WTO, international trading volumes of domestic firms have increased sharply. However, Vietnam has not ratified CISG, and most organizations and enterprises in Vietnam know next to nothing about this convention. This is a severe drawback since the well-known convention has already brought extensive benefits to enterprises of its contracting states.

During the seminar, speakers presented the main contents of CISG, its world-wide practices, the benefits to its member states and lessons for Vietnam. Researchers, lawyers, practitioners and enterprises also exchanged their views and experiences of CISG in member states and the issues Vietnamese enterprises should take into account when adopting CISG.

Matthias Duhn, executive director of the European Chamber of Commerce in Vietnam (Eurocham), believed that ratification of the CISG would be an important step for Vietnam, and help it further integrate into the world economy.

“If adopted in Vietnam, the CISG can help both the foreign and the Vietnamese business people to make sales of goods more efficient, and dispute resolution easier,” he said.

For Vietnamese business people in particular, application of the CISG can also help avoiding the risk of being forced into using a legal system that may be completely alien to their own. Therefore, “EuroCham believes that Vietnam’s adoption of the CISG will help making business faster, less expensive and more efficient for Vietnamese businesses and their foreign counterparts,” he said.

Professor Hiroo Sono of Hokkaido University in Japan also agreed with Matthias Duhn’s ideas about benefits for enterprises when Vietnam adopted CISG.

Once Vietnam becomes a signatory to the CISG, local enterprises could minimize the complication in disputes arising from contracts with foreign partners in regard of sale and purchase of goods.

In addition, Vietnam’s participation in CISG will reduce costs and time needed to negotiate the applicable law to contract; reduce the difficulty and cost which may incur due to the fact that the applicable law is the law of another country and avoid having to use the conflict rules of private international law to determine the applicable law to contracts.

Experts said that some 90% of Vietnamese enterprises are SMEs, so in the signing of sales contracts with foreign partners, they are often in a passive status as very few of them come to the legal consultant before conducting negotiations. As such, they only seek legal support from consultants once disputes arise.

So joining CISG will help reduce the risks, costs of doing business, and equality in contractual relations in regard of sale and purchase of goods.

Tony Nguyen, CISGVN advisor and general director of EP Legal, said that the seminar was an integral part of the campaign of lobbying Vietnam’s accession to CISG initiated by the CISGVN Study Group.