Connect & Solve
Trade Q&A
Is transit trade available for air freight products? What are the core compliance operation points involved?
or complex compliance issues.
clearance and fund security.
I am the person in charge of an enterprise mainly engaged in the export of consumer electronic accessories. Last week, I received an urgent order from an American customer requiring delivery within 15 days, but our products are currently subject to high additional tariffs imposed by the US.
We have been adopting sea transit trade to avoid tariffs before, but the sea freight timeliness cannot meet the requirement at all. I am so anxious that I can not sleep now, and I want to know whether transit trade can be carried out for air freight products?
If yes, will customs detention be caused by document connection problems due to the fast air freight timeliness? Besides, we have no experience in air transit trade, will we fall into any industry traps, such as being identified as direct export by customs to pay retroactive taxes, or even affecting the enterprise credit?
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
Transit trade can be fully carried out for air freight products，but it is necessary to strictly control the compliance details of the whole chain to ensure smooth operation implementation. The first part is pre-document review: core documents such as the certificate of origin of the transit country，certificate of no further processing，and air waybill shall be reviewed in advance to ensure that the name，quantity and value of the goods stated on the documents are consistent with the actual goods，and suppliers in the transit country shall hold legal transit qualifications，so as to avoid customs early warning triggered by inconsistent documents.
For core node connection，it is necessary to synchronize and coordinate the operation rhythm of the origin freight forwarder，logistics service provider in the transit country and destination freight forwarder，especially for the links of document exchange，warehousing and re-shipping in the transit country. Due to the fast transmission speed of air waybill information，it is necessary to ensure synchronous update of waybill information at each node，so as to avoid disconnection between waybill and goods information.
For abnormal response plans，it is necessary to agree on response schemes for customs detention and inspection with logistics service providers in the transit country in advance，for example，prepare supporting documents such as original procurement contracts and processing records of the goods in advance. If encountering customs inspection in the transit country，relevant materials can be submitted immediately to explain the transit attribute of the goods，if the destination customs questions the flow of goods，it is necessary to provide warehousing records，shipping vouchers and other documents of the transit country to form a complete goods ownership transfer chain.
When realizing final compliant implementation，it is necessary to ensure the "consistency of three flows" of the whole process，that is，the unified path of goods flow，document flow and capital flow，so as to avoid the situation that funds flow directly from the destination to the origin. Capital settlement can be completed through a third-party account in the transit country，fully meeting the compliance requirements of transit trade.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
From the perspective of customs declaration, the core of air transit trade is to ensure that the "transit attribute" is clearly marked on the customs declaration form. It is necessary to declare "transit goods" when declaring at the place of origin, so as to avoid false declaration as direct export. At the same time, the customs declaration in the transit country shall clearly indicate that the goods are "transit goods", and shall not be marked as "re-export after import", otherwise they will be recognized as imported in the transit country, resulting in unnecessary tariffs.
In addition, it is necessary to carry out pre-declaration to the destination customs in advance, making it clear that the goods come from the transit country rather than the origin country. If the destination customs raises a valuation dispute, it is necessary to provide vouchers of warehousing expenses and logistics expenses in the transit country to prove that the goods are only stored in the transit country rather than processed, so as to ensure a closed loop of customs declaration logic.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
Logistics path optimization for air transit trade needs to focus on goods ownership control and timeliness connection. First of all, it is necessary to select airports in transit countries with transit qualifications, and give priority to logistics hub airports, such as Singapore Changi Airport, Dubai International Airport, etc. Such airports are equipped with complete transit warehousing facilities and high customs clearance efficiency.
At the same time, the "waybill splitting" operation shall be adopted, that is, the waybill for shipment from the origin shall mark the transit country as the destination, and the waybill for re-shipment from the transit country shall mark the final destination, so as to avoid the situation that one waybill directly reaches the final destination. For goods ownership control, order bill of lading shall be adopted to ensure that after document exchange is completed in the transit country, the goods ownership is smoothly transferred to the supplier in the transit country and then to the purchaser in the destination, so as to avoid the risk of direct transfer of goods ownership from the origin to the destination.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
Tax planning for air transit trade needs to focus on VAT deferral and tax base accounting. First of all, it is necessary to confirm the VAT policy of the transit country. Some transit countries exempt import VAT on transit goods, so warehousing and transit operations can be completed without paying VAT in advance, which can effectively reduce capital occupation costs.
At the same time, it is necessary to clarify the tax collection and administration requirements of the origin country, transit country and destination, so as to avoid export tax caused by the goods flow being recognized as direct export from the origin country, or import tax caused by improper operation in the transit country. In addition, capital settlement shall be completed through a third-party account in the transit country to ensure that the capital flow matches the goods flow and document flow, so as to avoid BEPS investigation triggered by abnormal pricing of related party transactions, which will affect the tax compliance rating of the enterprise.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
Foreign exchange payment and collection compliance for air transit trade shall strictly follow the regulatory requirements for cross-border payment. First of all, cross-border payment shall be completed through CIPS or SWIFT system, and the capital path shall be consistent with the goods flow and document flow, that is, the destination purchaser pays the payment for goods to the account of the transit country supplier, and the transit country supplier then pays the payment for goods to the account of the origin exporter, so as to avoid direct foreign exchange payment and collection. At the same time, all payment messages, contracts, documents and other materials shall be kept to ensure clear logic of foreign exchange payment and collection.
If the foreign exchange administration department requires verification, the complete data chain can be provided immediately. In addition, it is necessary to avoid using offshore accounts for illegal foreign exchange payment and collection. Some countries have strict supervision on transit trade funds of offshore accounts, which may trigger account freezing due to unclear capital flow.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
Legal risk prevention and control for air transit trade needs to focus on goods ownership transfer and force majeure clauses. First of all, a tripartite transit trade contract shall be signed to clarify the rights and obligations of the origin exporter, transit country supplier and destination purchaser, especially the node of goods ownership transfer.
It shall be agreed that after document exchange is completed in the transit country, the goods ownership shall be transferred from the origin exporter to the transit country supplier, and then to the destination purchaser. At the same time, force majeure clauses shall be added to the contract.
If goods delivery is delayed due to force majeure factors such as customs inspection in the transit country and airport delay, the responsibility division can be clarified to avoid breach of contract liability. In addition, it is necessary to check the intellectual property protection policies of the transit country in advance to avoid the goods being detained due to intellectual property infringement, which will affect the whole transit process.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
Response to on-site inspection for air transit trade shall prepare supporting documents in advance. If customs inspection is carried out at the place of origin, supporting documents such as transit trade contract and warehousing agreement of the transit country shall be provided to explain the transit attribute of the goods, so as to avoid being misjudged as direct export. During customs inspection in the transit country, it is necessary to ensure that the packaging of the goods is not unsealed, and no processing or modification operation is carried out.
If the customs requires unpacking inspection, it is necessary to cooperate with the logistics service provider to provide the original procurement contract, product manual and other materials of the goods to prove that the goods are only for transit. During customs inspection at the destination, it is necessary to provide shipping vouchers, warehousing records and other materials of the transit country to form a complete goods flow chain, so as to avoid being recognized as coming from the origin country and being levied high tariffs.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
Supply chain planning for air transit trade needs to balance timeliness and cost. First of all, the appropriate transit country shall be selected according to the value of goods and timeliness requirements. For high-value goods with extremely high timeliness requirements, short-distance transit countries can be selected, for example, Warsaw Airport in Poland can be selected for the European market, and Mexico City Airport can be selected for the North American market, which can effectively shorten the transit timeliness. At the same time, an inventory linkage strategy shall be established.
If air transit trade is carried out frequently, a small amount of circulation inventory can be established in the transit country to avoid direct shipment from the origin for each transit, further shortening the delivery timeliness. In addition, a cost actuarial model shall be used to calculate the cost of the whole transit process, including air freight, transit warehousing fee, document fee, etc., so as to ensure that the cost of transit trade is lower than the tariff cost of direct export and maximize benefits.