MINISTRY OF FINANCE

UNIVERSITY OF FINANCE MARKETING

FACULTY OF COMMERCE

EXPORT PROCESSING CONTRACT

PERFORMANCE

EXPORT IMPORT MANAGEMENT

PhD: Mai Xuan Dao

GROUP 5:
1. Nguyen Thao Gia Han
2. Tran Chanh Binh
3. Truong Thi Thanh Huong
4. Vo Ngoc Huyen Tran
5. Tran Thi Anh Tien
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Table of Contents
I. Overview............................................................................................................2
1. Introduction to processing contracts...............................................................5
2. Obligations of Processor and Processee..........................................................7
II. Implementation of export processing contracts..................................................8
1. Material taking delivery from Processee/Preparation.....................................8
2. Finished products manufacturer....................................................................10
3. Finished products delivery & documents sending........................................12
4. Liquidation and Settlement of Processing Contracts....................................14
5. Receiving remuneration................................................................................16
6. Complaints and complaint resolution (if any)...............................................16

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I. Overview

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1. Introduction to processing contracts

This is a processing contract between Processor, Chaei Yang Vn Company Limited,

located in Binh Duong, Vietnam (Party A) and Processee, Gateway Global Trading
Company Limited, located in Hong Kong (Party B).

Article 1. Description, Quantity, Price Processing: Party A will process the product
"Shoe pads in rolls" in the quantity of 1,000,000 yards with a unit price ranging from 0.3
USD/yard to 3.0 USD/yard, depending on the specific quality and requirements. The total
contract value: 300,000 - 3,000,000 USD, depending on the final unit price. Party A will
complete the final product, which is the shoe sole, and re-export it to Party B.

Article 2. Term of Payment: Party B will pay the full amount for each batch of
processed goods by T/T within 60 days from the date Party A delivers the final product to
Party B. The currency used in this contract is USD. Lacking information about payment
documents.

Article 3. Material terms:

 Party B will supply all or part of the raw materials for the processing.
 Party B is responsible for ensuring the quality and quantity of raw materials as
agreed upon. Party B shall bear any additional costs arising from non-compliant
raw materials (penalties, import taxes).
 In case Party B does not supply enough: Party A has the right to purchase raw
materials on its own to complete the order, and this cost will be included in the
processing cost.
 Raw materials from previous contracts will be transferred to new contracts for use
and based on the agreements.
 Waste disposal: Party A will store, dispose of, sell, or supply the product waste
and waste in Vietnam in accordance with the law. If it cannot be disposed of, it
will be re-exported to Party B according to customs regulations.
 Environmental responsibility: Party A is responsible for handling product waste,
ensuring daily environmental hygiene in accordance with Vietnamese law.

Article 4. Machines Terms: Party A shall equip itself with machinery and equipment
to produce according to Party B's order.’

Article 5: Other Terms (INCOTERMS 2010)

 Party B will provide raw materials to Party A free of charge by sea or air to Cat
Lai Port or Tan Son Nhat Airport. Party A will be responsible for importing the
raw materials at HCM port.

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 Party B will conduct a 100% inspection of the finished products before delivery
and notify Party A of the delivery time and location. Party A will deliver the
finished products to the location designated by Party B.

Article 6: Cost of Importing: In case of air transportation, Party A will pay all
import and export duties, except for local charges, agency fees, service fees, and storage
fees.

Article 7. Right of Owners of Trademarks: Party A commits to using these raw

materials only for processing Party B's orders. The origin of the processed products:
MADE IN VIETNAM.

Article 8. Time valid of Contract: The contract shall be effective from December
15, 2022, to December 31, 2023.

Article 9. Other Terms:

 Raw Material Supply: Party B must supply raw materials at least 40-45 days
before the agreed delivery date.
 Inventory Report: Within 10 days of the last raw material delivery, Party B must
complete the raw material inventory statement.
 Disposal of Surplus Raw Materials: Within 20 days of the approval of the final
inventory statement by both parties, Party B must notify Party A of the disposal
plan for surplus raw materials.
 Product Samples: Before mass production, Party A will make 2 product samples
for Party B's reference. After approval, each party will keep 1 sample for
reference, and this sample will be considered the standard sample for mass
production. Any additional changes that affect the appearance and cannot be
remedied shall be considered invalid.
 Raw Material Loss Rate:
o TPU Film (main material): Party B will provide a 5% allowable loss rate.
o Extra materials: Party B will provide a 3% allowable loss rate.
 Post-Delivery Liability: After delivery, Party A shall not be liable for any claims
from Party B regarding the quality and quantity shortage of the finished products.
This means that Party B needs to carefully inspect the products before accepting
them, and if there are any problems, Party B shall be responsible for them.
 Contract Amendment: Any amendment not included in this contract must be
agreed upon and confirmed in writing by both parties with an attached appendix
and signed by both parties.
 Dispute Resolution: Both parties shall fully perform the contract. Any disputes
arising during the performance of the contract shall be settled through negotiation
and amicable settlement. If no agreement can be reached, the dispute shall be
settled by arbitration or court in Ho Chi Minh City, and the final decision of the
arbitrator or court shall be binding on both parties.
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 This contract is made in two copies in English, one copy for each party, and both
copies have the same legal validity. (This confirms that both copies of the contract
have legal validity and can be used as evidence in case of disputes.)

2. Obligations of Processor and Processee

According to Article 42 of Decree 69/2018/ND-CP: Regulations Detailing A
Number Of Articles Of The Law On Foreign Trade Management, the rights and
obligations of the parties are as follows:
FOR THE PROCESSEE:
a) Deliver all or part of the raw materials and supplies for processing as agreed upon
in the processing contract.
b) Receive all processed products; machinery, equipment leased or borrowed to the
processing party; raw materials, accessories, supplies, and waste after termination
of the processing contract, except in cases where export in situ, destruction,
donation, or gift is permitted as prescribed in this Decree.
c) Appoint experts to Vietnam to provide technical guidance on production and
inspect the quality of processed products as agreed upon in the processing
contract.
d) Be responsible for the right to use trademarks and the name of origin of goods.
e) Comply with the provisions of Vietnamese law related to processing activities and
the terms of the signed processing contract.
f) Be allowed to export in situ processed products; leased or borrowed machinery
and equipment; surplus raw materials, accessories, and supplies; waste and scrap
pursuant to a written agreement of the relevant parties, in accordance with current
regulations on the management of import and export of goods and must fulfill tax
obligations and other financial obligations as prescribed by law.
FOR THE PROCESSOR:
a) Be exempt from export tax and import tax as prescribed by the law on tax for
goods temporarily imported according to the standard and loss rate to implement
the processing contract and for exported processed products.
b) Be allowed to hire another trader to process.
c) Be allowed to supply part or all of the raw materials, accessories, and supplies for
processing as agreed upon in the processing contract; must pay export tax as
prescribed by the Law on Export Tax and Import Tax for raw materials,
accessories, and supplies purchased domestically.
d) Be entitled to receive payment from the contracting party in the form of processed
products, except for products on the list of prohibited imported goods or goods
subject to import restrictions. For products on the list of goods imported under a
license or under conditions, the provisions on licenses and conditions must be
complied with.
e) Must comply with the provisions of Vietnamese law on export processing, import,
domestic production of goods, and the terms of the signed processing contract.

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f) Carry out export procedures in situ for processed products; leased or borrowed
machinery and equipment; surplus raw materials, accessories, and supplies; waste
and scrap at the request of the contracting party.

II. Implementation of export processing contracts

Export processing contract implementation includes 5 main stages:
1. Material taking delivery from Processee/Preparation
After signing the processing contract, the processor proceeds with the import license
application, reviews the documents, and completes customs declaration for the raw
materials. According to Circular No. 38/2015/TT-BTC and Circular No. 39/2018/TT-
BTC to do customs clearance.
After receiving the Arrival Notice, the processor will electronically declare customs
for the raw materials:
 Once the declaration is completed, the company will submit the declaration, and
the system will proceed with checking.
 The documentation staff will declare the import information using the VNACCS
software. The system will assign a declaration number and send feedback to the
customs declarant on the screen.
 The customs declarant will check the declared information and the related
information that the VNACCS system automatically calculates and returns.
 A list of cleared containers will be sent to the importer after the goods are cleared
by customs.
The processor prepares the necessary documents to obtain the Delivery Order (D/O),
including the company's letter of introduction, the Arrival Notice, and the Bill of Lading.
The processor brings the documents (Processing contract, packing list, Bill of Lading,
D/O, clearance list, declaration) to the customs office at the port of entry where the goods
arrive to complete the customs clearance procedures.
After completing customs procedures, the goods owner must bring the set of
documents and D/O to the ship management office at the port to confirm the D/O. The
representative only needs to pay the fee and receive a delivery note (EIR), then load the
goods onto the vehicle and take it to the storage place.
According to the processing contract, Clause V - OTHER TERMS, part a:
"Party B will provide material free to Party A by shipping to Cat Lai sea port, TSN
airport. Party A will be had responsibility to proceed import material at HCMC port
quickly, on time in order to manufacture."
 Party B will provide free materials to Cat Lai Port or Tan Son Nhat Airport (TSN)
as per the agreed schedule. Party B is responsible for arranging transportation and
ensuring timely delivery. Party A will receive shipping details from Party B to
handle the necessary customs procedures in Vietnam
Clause VI/ Cost of importing: “Party A has to pay all costs of importing and
exporting except for local charges, agency fees, service charges, and storage fees (in
case of air shipment)”.

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 Party A bears all import and export-related costs, except for local fees, agency
fees, service charges, and storage fees (in the case of air shipments).
Clause IX - OTHER TERMS:
“1/ Party B will supply material no later than 40-45 days before the delivery date as
agreed. The delay in material supply by Party B will affect Party A's delivery schedule”.
- Party A must identify product needs and send specific requests to Party B.Party A
must receive materials from Party B at least 40-45 days before delivery and adjust
the production schedule. If Party B delays delivery, Party A will adjust the
delivery date accordingly..
“2/ Within 10 days from the last delivery, Party B must finish the material balance sheet
with written confirmation”.
 According to Clause IX.2, within 10 days after the last delivery, Party B must
complete a material balance sheet with a written confirmation. This sheet will
detail the quantity of materials supplied, used, and any excess (if applicable).
 Party A will review and confirm the materials balance provided by Party B,
ensuring that the figures are accurate and match the contract requirements.
 This allows both parties to verify and adjust material-related matters and resolve
issues such as shortages or excesses.
Receiving materials, checking quantity and quality
Once the materials have arrived in Vietnam, Party A will receive the shipment and
thoroughly inspect:
 Quantity: Ensuring that the imported materials match the invoice and packing list.
 Quality: Verifying technical specifications to ensure that the materials meet
production requirements and the contract's agreed standards.
Clause III.b - MATERIAL TERMS: "This material will be transported by Party B to
Viet Nam. If it not be same kind of material, size, quantity in the Invoice and the detail
list has sent before to Party A, Party B will be had responsibility in mistake and will have
payment to Party A the punishment fee or import tax (if any) belong to customs
regulations."
 Upon receiving the materials in Vietnam, Party A will inspect the quantity and
quality. This clause clearly states that if the materials differ in type, size, or
quantity from the invoice, Party B will bear responsibility and must pay any
penalty fees or import taxes as per customs regulations.
Clause III.c: “If Party B does not supply enough material for Party A, Party A may
purchase materials in Vietnam or abroad to continue processing for Party B (the list of
materials purchased in Vietnam and abroad will be attached). The cost of purchasing
materials will be added to the processing cost”.
 If Party B does not supply sufficient materials, Party A is allowed to purchase
materials from Vietnam or other countries to continue production.
 This clause clarifies how to handle material shortages, ensuring uninterrupted
production and efficient cost management.
Clause III.d: “The material from the old contract will be transferred to the new contract
for use according to the agreement between the two parties”.

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 Party B must ensure that all remaining materials from the old contract are
transferred and recorded in the new contract. Party B needs to provide a report
detailing the quantity of remaining materials.
 Party A will confirm the quantity of remaining materials from the old contract for
use in the new contract, ensuring that the transfer complies with the terms of both
contracts.

Sorting, warehousing, preparing for production:

 After completing the quantity and quality checks, the materials will be sorted and
stored in preparation for the next stages of production.
 Materials will be arranged and stored by type to facilitate tracking and usage
during the production process.
 Preparing machinery and necessary equipment to start the production process
based on Party B’s order.
Clause III.a - MATERIAL TERMS:"Party B will provide total or a part of material
(no payment) plus the percent of lost in Bill of material in processing products. This lost
of material help Party A to make enough quantity of order processing."
- This clause mentions that Party B will supply materials (either in whole or in part)
and accounts for material loss during processing to ensure that Party A has enough
materials to produce the required quantity per the contract.
- Party A will use the supplied materials, including the reserve for waste, to ensure
sufficient production of the required quantity of products.
Clause IV - MACHINES TERMS:"Party A is responsible for self-supply of machinery
and equipment to produce orders for Party B."
 Party A is responsible for providing the machinery and equipment necessary for
manufacturing Party B’s order. This ensures that all preparation steps after
receiving materials are fully completed.
Clause VII.a: “The Manager of Party A commits to using the provided materials
exclusively for processing Party B’s orders”.
 The manager of Party A agrees to use the materials from Party B solely for
processing Party B’s orders and not for any other purposes.
Clause IX - OTHER TERMS:
“4/Before production, Party A will make two sample products to refer by Party B. After
acceptance, each party will hold one sample product for reference, and this sample
product will be considered the standard for mass production. Any additional changes
affecting appearance and irreparable issues are deemed invalid”.
 Before starting production, Party A must produce two sample products based on
the provided materials. Party B will inspect and approve these samples. After
approval, both parties will keep one sample each as a standard reference for mass
production.
 Future products must conform to this standard. Any changes to design or quality
after the sample approval are considered invalid unless agreed upon by both
parties.

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2. Finished products manufacturer

Step 1: Detailed Production Planning

According to Article III - Material Terms: Party B (Gateway Global Trading

Company Ltd.) will supply the necessary materials to Party A (Chaei Yang VN Co.,
Ltd.). This means that Party A must prepare a detailed production schedule, including
required machinery, technology used, and work assignments.

Party A must prepare machinery and equipment that meets the standards to
produce according to Party B’s technical requirements.

The quantity of processed products is 1,000,000 yards (TPU shoe insoles).

Step 2: Processing the Goods

According to Article IV - Machines Terms: After Party B supplies the materials,

even if only partially, Party A is responsible for providing its own machinery and
equipment as required by Party B's order. Party A will then proceed to process the goods,
specifically producing TPU shoe insoles according to the agreed volume (1,000,000
yards).

According to Article III - Section d: Materials from the previous processing

contract will be transferred to the new contract as agreed.

The materials will be put into production to produce finished products. Party A is
responsible for using machinery and technology in compliance with standards and as
specified by Party B.

According to Article IX.5 of the contract regarding material usage rates:

 Transparent TPU film. Main material: Party B will supply an allowable waste
rate of 5%.
 Auxiliary materials: Party B will supply an allowable waste rate of 3%.

According to Circular 39/2018/TT-BTC Article 47 and Decree 69/2018/ND-CP Article

40, production norms are agreed upon in the processing contract, so Party A will follow
the agreed contract.

Step 3: Quality Control During Production:

Inspection at Each Production Stage:

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In line with the processing procedure, at each production stage, Party A will
conduct quality checks to ensure that products meet technical standards. This helps
prevent defects during mass production.

According to Article III - Section e of the contract: Party A must strictly follow
regulations regarding the handling of excess materials, waste, or defective products,
ensuring they do not harm the environment and comply with Vietnamese law.

Final Product Inspection:

Once the product is complete, there will be a final inspection to ensure that it
meets the required standards before delivery.

According to Article V - Section a: Party A and representatives of Party B are

responsible for inspecting the products before delivering the final product to Party B.
This ensures that the product meets all quality requirements set by Party B.

Step 4: Packaging and Labeling:

Packaging:

After passing quality checks, the product will be carefully packaged to protect it
during transport.

According to Article III - Section f: Party A is responsible for maintaining

environmental hygiene after each production shift and taking measures to protect the
goods from damage during transport.

Labeling:

According to Article VII, Section b: The finished product will be labeled with
detailed information such as product details, manufacturer, production date, batch
number, etc. However, since Party A is the processor, the label will clearly indicate Party
B as the final owner of the product.

Step 5: Management of Materials and Waste:

According to Article III - Material Terms - Sections e and f: Party A must

ensure the management and preservation of materials and waste during production.

If there are any excess materials, product waste, or defective products that cannot
be used, Party A must comply with Vietnamese law in handling them.

In cases where disposal is not possible, they will be re-exported to Party B under
customs supervision.

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3. Finished products delivery & documents sending

After both parties have completed the final product inspection procedure in
accordance with Article 5.b of the contract, Party A will proceed with the delivery
according to the address and time notified by Party B. Party A will hire a carrier,
purchase cargo insurance (if any), and carry out the export procedures for the final
product to Party B.
Party A needs to rely on the following legal bases to carry out the export
procedures for the processed products to Party B:
 Law on Customs No. 54/2014/QH13 dated June 23, 2014, of the National
Assembly.
 Decree No. 08/2015/ND-CP dated January 21, 2015 of the Government detailing
and implementing a number of articles of the Law on Customs regarding customs
procedures, inspection, supervision, and customs control.
 Circular No. 38/2015/TT-BTC dated March 25, 2015 of the Ministry of Finance
stipulating customs procedures; customs inspection and supervision; export tax,
import tax, and tax management for exported and imported goods.
 Circular 39/2018/TT-BTC amending Circular 38/2015/TT-BTC stipulating
customs procedures; customs inspection and supervision; export tax, import tax,
and tax management for exported and imported goods issued by the Minister of
Finance.
Export procedures for processed products:
Step 1: Organizations or individuals carrying out export procedures for processed
products. Pursuant to Article 16 of Circular 39/2018/TT-BTC, the customs dossier for
exported processed products includes:
 Customs declaration
 Commercial invoice or a document of equivalent value in case the buyer has to
pay the seller
 Forest product declaration for exported raw wood as prescribed by the Ministry of
Agriculture and Rural Development (if required)
 Export license or permit issued by a competent authority under the law on foreign
trade management for goods subject to licensing management
 Specialized inspection certificate
 Certificate proving that the organization or individual is eligible to export goods as
prescribed by the law on investment
 Contract of entrustment
Step 2: The information on the customs declaration is automatically checked by the
system to assess the conditions for accepting the customs declaration registration. In case
the customs declaration is made on a paper customs declaration, the customs officer shall
check the conditions for registering the declaration as prescribed in this clause and the
documents belonging to the customs dossier.

Step 3: Based on the customs inspection decision automatically notified by the

system, the processing is carried out: Accepting the declared information of the Customs
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Declaration and deciding to clear the goods. Check the relevant documents belonging to
the customs dossier submitted by the declarant, presented, or the relevant documents on
the national single window portal to decide on the clearance of goods or actual inspection
of goods to decide on clearance.
Place for carrying out export procedures: For goods that are processed products,
manufactured for export: Organizations or individuals may choose to carry out
procedures at a convenient Customs Sub-department.
Party A provides Party B with the necessary documents for import: Contract,
Invoice, Packing list, Bill of Lading, and other necessary documents. In this case, Party A
performs the processing and assembly stage (from shoe pads to shoe soles). According to
Article VII of the contract, the final product will be marked: Made in Vietnam (Pursuant
to Official Letter No. 1523/BTC-TCHQ dated February 18, 2021 of the Ministry of
Finance to determine the Origin of the final product), the product may be issued a C/O
form AHK.
4. Liquidation and Settlement of Processing Contracts

According to Article 44 of Decree 69/2018/ND-CP, the notification, liquidation,

and settlement of processing contracts involving foreign elements are carried out as
follows:

Step 1: Notification of Contract Termination

"Before executing the processing contract, organizations and individuals must
notify the processing contract to the Customs Authority. Upon the conclusion of the
processing contract or when the contract expires, the parties involved must liquidate the
contract and submit periodic reports on the use of raw materials, supplies, and exported
products to the Customs Authority."

Step 2: Document Verification

Verify and compare these documents with the content of the contract to ensure that the
quantity, quality, and value of the goods received are accurate. Documents such as
commercial invoice, bill of lading, quality certificates, and delivery receipts must be
checked.

Step 3: Calculation of Total Costs and Handling of Surplus Materials

According to Article 9.3 of the contract (under IX/OTHER TERMS),
"9.3/ After 20 days from the date both parties agree to liquidate, the last important
document mutually accepted must be provided. Party B must notify Party A of the
method for handling surplus materials. Alternatively, the authorized Party A may choose
the method of 'IMPORT TAX PAYMENT' to resolve surplus materials during
liquidation."

 The total costs of the contract include: material costs, production costs,
transportation costs, insurance costs, imported raw materials and supplies, re-

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exported raw materials and supplies, the quantity of exported products based on
the standard usage of materials and supplies, the consumption rate, and loss rate
 Quantity Verification: Determine the amount of surplus materials compared to the
agreed standards in the contract. Classify surplus materials into categories such as
reusable materials, by-products, and waste. ("The disposal of waste, by-products,
and scrap (if any) is only permitted after obtaining written approval from the
Department of Natural Resources and Environment and must be conducted under
the supervision of the Customs Authority.")

According to the provisions of Article 69 of Circular 38/2015/TT-BTC (amended

in Clause 46, Article 1 of Circular 39/2018/TT-BTC):
“Customs procedures for handling surplus materials, supplies, waste, by-products;
machinery and equipment temporarily exported for processing.”

Based on the regulations of Vietnamese law and the content of the processing
contract, the handling of materials is carried out as follows:

a) Sale, donation, or destruction in the foreign market;

b) Importation back to Vietnam;
c) Transfer to execute another processing contract abroad.

The handling methods are specified in the contract - III. MATERIAL TERMS:

d) Materials in the old contract will be transferred to the new contract for use and will
be governed by the agreements.
e) Party A will manage the waste materials and by-products, dispose of, sell, or offer
for sale in Vietnam, following Vietnamese law. If disposal is not feasible, they
will be re-exported to Party B under the supervision of the Customs Authority.
f) Party A is responsible for handling product waste, ensuring environmental hygiene
on a daily basis after production according to Vietnamese legal regulations.
 Based on the agreed costs and payment terms in the contract, both parties will
determine the payment amount. If there are any discrepancies, both parties need to
discuss to identify the causes and provide appropriate solutions.

Step 4: Liquidation of the Contract

 Review the terms of the contract to determine liquidation obligations.

 After completing all contractual obligations and the parties involved have
reconfirmed the quantity, quality, and incurred costs, the liquidation of the
contract will be documented in the form of a record.
 Liquidation Confirmation: Both parties must mutually agree on the liquidation of
the contract based on the documents and information that have been verified.

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 The effective period of the contract is: This contract is effective from December
15, 2022, to December 31, 2023.
 In the case where one party seriously violates the obligations and commitments
under the contract, the other party has the right to cancel or unilaterally terminate
the contract and demand compensation for damages from the violating party.

Step 5: Make a settlement record

 Draft the record: Clearly state information regarding the quantity of goods
received, product quality, incurred costs, the amount already paid, and other
relevant terms.
 Signing: Both parties sign the settlement record to confirm the information.
 Archive a copy of the contract along with related documents and the settlement
record for evidence in case of need.

5. Receiving remuneration

When Processor (Party A) receives payment for processing, they need to carry out a
detailed verification process to ensure that the payment complies with the terms outlined
in the contract. This process includes the following steps:

a) Verification of Payment Information:

 Payment Amount: Party A checks whether the amount transferred by Party B
matches the processing fee stated in the invoice and contract.
 Payment Date: Verify that the payment was made within the time frame
specified in the contract, specifically within 60 days from the delivery date
(II.a of the contract).
 Receiving Account: Cross-check the account information to ensure that the
funds were transferred to the account listed in Party A's banking information in
the contract.
b) Compare with final Settlement report:
 Party A checks if the received amount aligns with the figures recorded in the final
settlement report for each shipment or delivery batch.
 If there are discrepancies, Party A must promptly contact Party B to verify the
reason and request timely adjustments.
c) Recording in Bookkeeping:
 After verifying all information, Party A proceeds to record the transaction in
the accounting books to update payment information and monitor cash flow.

6. Complaints and complaint resolution (if any)

Quality Complaints: After the completion of the delivery, Party A shall not be
responsible for any complaints from Party B regarding the quality or quantity of the
processed products that are lacking. This is clearly stipulated in Section XI.6 of the

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contract: “6/ After delivery, Party A will not be responsible for any claim of Party B
about the quality of the finished product and the quantity that is missing.”
Delivery Error Complaints: In the event that Party B provides insufficient or
incorrect materials in terms of type, size, or quantity as specified in the invoice or
detailed list sent to Party A, Party B shall be responsible for the discrepancies and must
pay any penalties or import taxes as required by customs regulations. “b/This material
will be transported by Party B to VietNam if it not be same kind of material, size,
quantity in the Invoice and the detail list has sent before to Party A, Party B will be had
responsibility in mistake and will have payment to Party A the punishment fee or import
tax (if any) belong to customs regulations.” Section III.3
Payment Complaints: If there are complaints or disputes arising during the
execution of the contract (in the event that Party B fails to make timely payments as
stipulated in the contract (Section /TERM OF PAYMENT)), both parties will prioritize
resolving the issue through negotiation and amicable agreement. If an agreement cannot
be reached, the dispute will be resolved in the courts or arbitration in Ho Chi Minh City,
and the final decision of the arbitrator or court will be binding on both parties. “8/ Two
parties must fully comply with this contract. All disputes during the time of contract
performance will be settled by negotiation and friendly agreement. During the validity of
the contract, any disputes that do not come to a friendly agreement will be resolved by
the arbitration or court in Ho Chi Minh city, the final decision is binding on both
parties” Section IX.8
Risk Mitigation: Some risks may arise during the execution of the processing
contract, including delays in the supply of materials from Party B or materials that do not
meet the requirements, resulting in delays in production and delivery by Party A. This is
clearly stipulated in Section IX.1 of the contract. “Party B will supply material no later
than 40-45 days before the delivery date as agreements. The time that Party B supplies
late materials will lead to the delay in the delivery date of Party A”

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