When an exporter labels goods incorrectly or omits mandatory information, importers, foreign partners, and the exporting company itself in Vietnam all face legal risks, reputational damage, and potential claims. So how do labeling-related disputes in export activities arise, and what should businesses do to resolve them?
Under current Vietnamese regulations, goods circulated domestically as well as imported or exported goods must bear labels, and labeling content must comply with statutory requirements. Specifically, Decree No. 43/2017/ND-CP on goods labeling (as amended by Decree No. 111/2021/ND-CP) stipulates the responsibilities of manufacturers and importers; even goods initially produced for export but later circulated in Vietnam must still be labeled in accordance with the law.
For goods exported from Vietnam, if the packaging or label indicates Vietnamese origin (e.g., “Made in Vietnam,” “Origin: Vietnam”), the enterprise must satisfy origin criteria under applicable free trade agreements or as prescribed in Decree No. 31/2018/ND-CP.
Typical violations include:
Incorrect declaration of origin;
Missing mandatory labeling information;
Re-labeling or using recycled packaging that does not meet requirements;
Affixing “Made in Vietnam” despite failing to meet origin criteria.
When an exporter commits such violations, the following disputes may occur:
Foreign partners may detect incorrect labels, demand compensation, or refuse to accept the goods.
Vietnamese importers or domestic distributors may be sanctioned or have goods recalled, incurring re-processing costs.
Exporters may be subject to administrative sanctions by Vietnamese authorities or foreign regulators, suffer reputational damage, face contractual claims, and lose business partners.
The risks are substantial: exporters using incorrect labels may face administrative penalties, orders to re-export or recall goods, and even civil lawsuits. For example, in Vietnam, violations of labeling regulations can result in fines ranging from hundreds of thousands to hundreds of millions of VND depending on the value of the goods. In practice, customs authorities have discovered multiple shipments violating labeling and origin rules—such as a case in Lang Son where 53 out of 57 inspected items lacked origin information.
Given these risks, disputes between exporters and their partners are highly likely—especially where contracts include clauses on labeling, origin, or legal liability.
To minimize risks of disputes arising from labeling violations, exporters in Vietnam should adopt the following measures:
Draft clear export contracts: Specify responsibilities regarding product labeling, origin, export standards, quality checks, and packaging. Clarify who bears liability for labeling errors, re-exporting costs, or losses if goods are rejected.
Verify labeling content before export: Compare actual labels with current legal requirements (Decree 43/2017, as amended by 111/2021) and origin rules when using “Made in Vietnam.”
Maintain documentation: Preserve documents, images, and testing results. These records are crucial when disputes arise.
Review dispute resolution clauses: Ideally specify arbitration or court jurisdiction and applicable law. Where foreign partners are involved, businesses should determine the governing law and prepare for resolution in Vietnam if necessary.
Monitor legal changes: Regulations on labeling, origin, and administrative sanctions may change (e.g., amendments under Decree 111/2021, Decree 126/2021), so businesses must stay updated.
When an exporter is accused of mislabeling or goods are rejected, businesses should take the following actions:
Identify the nature of the dispute: Determine whether the issue is incorrect origin, missing information, non-compliance with the contract, or partner complaints. Review the contract and relevant documents.
Collect evidence: Contracts, delivery minutes, product samples, label photos, invoices, testing certificates, export declarations, etc.
Negotiate and mediate: In many cases, adjusting labels, re-exporting, or renegotiating costs can resolve the issue faster and more efficiently than litigation.
Choose appropriate legal proceedings:
If the contract contains an arbitration clause: submit the dispute to the designated arbitration body (domestic or international).
If not: the exporter may file a claim with a competent Vietnamese court; note the statute of limitations (generally 3 years from the date of discovering the infringement under Vietnamese civil law).
Evaluate costs and strategic options: Including re-export expenses, administrative fines, compensation, legal costs, and reputational loss. Businesses must carefully weigh litigation versus settlement.
Implement corrective measures: After resolving the dispute, exporters should review and improve labeling and export procedures to ensure future compliance.
An experienced law firm such as DEDICA Law in Ho Chi Minh City can support Vietnamese exporters through:
Reviewing and drafting export/import contracts with clear labeling and origin responsibilities;
Assessing labeling content and Vietnamese origin compliance under Decree 43/2017 and 111/2021;
Supporting evidence collection and proposing strategic dispute-resolution approaches (negotiation, arbitration, litigation);
Representing businesses in negotiations, arbitration, or court proceedings;
Assisting with post-dispute compliance reviews to prevent recurring risks and promote sustainable business growth.
An exporter’s violation of goods-labeling requirements does not merely create legal risks—it also directly impacts brand reputation, re-processing costs, and relationships with partners. In Vietnam, the legal framework (Decree 43/2017 as amended by 111/2021) and the corresponding sanctions are well-defined. Once a dispute arises, exporters should maintain robust contract terms, preserve documentation, and select an appropriate method of dispute resolution (negotiation or legal proceedings).
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