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What official approval procedures are involved in China's transit trade, and who should be contacted for approval?
or complex compliance issues.
clearance and fund security.
I am an operator of a foreign trade company specializing in export of industrial electromechanical equipment. Last week I received an urgent transit trade order from a Middle Eastern customer: the goods are high-precision servo bearings purchased from Germany, which will be transited via Shanghai Yangshan Port to Dubai, UAE, and the customer requires delivery to the port within 15 days. Our company has never engaged in transit trade before.
When connecting with the designated freight forwarder yesterday, they mentioned vaguely that compliance approval should be handled first, but did not specify who to contact. I went through industry materials for a long time: some say to contact the customs directly, some say to file with the SAFE first, and others say approval from the commerce bureau is required for precision electromechanical products.
Now there are only 3 days left before the document submission deadline required by the freight forwarder, I am so anxious that I can barely eat. I am afraid that contacting the wrong department will delay the approval, which will not only lead to compensation of 8% of the order value as liquidated damages to the customer, but also may affect the company's credit rating on cross-border e-commerce platforms. I would like to ask who is responsible for the approval of China's transit trade?
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
First，complete the pre-document review details: first confirm whether the goods belong to restricted transit categories through the Catalogue of Prohibited/Restricted Import and Export Goods issued by the General Administration of Customs，prepare core documents including procurement contracts，ocean bills of lading，certificates of origin，transit trade agreements in advance，ensure that the "transit" flow mark on all documents is clear，to avoid being misjudged as general import and export due to vague documents which will cause approval obstruction.
Core node connection: The core approval subject for transit trade of ordinary goods is the customs at the entry place. You need to submit transit declaration through the "China International Trade Single Window" 3 working days before the goods arrive at the port. After the customs verifies the actual flow of goods through the manifest system，a transit release certificate will be issued within 1-2 working days，if cross-border foreign exchange receipt and payment is involved，you need to complete the record-filing of transit trade foreign exchange receipt and payment information on the State Administration of Foreign Exchange Application Service Platform simultaneously，no separate approval is required，For sensitive categories (such as precision electromechanical products，dual-use military and civilian materials)，you need to apply for the Transit Trade Approval Permit from the local commerce department 7 working days in advance，and then submit the permit together with other documents to the customs for approval.
Abnormal contingency plan: If there is a delay in customs approval，you can entrust an institution with more than 20 years of transit agency experience to submit an "expedited approval application"，and at the same time issue the customs acceptance voucher to overseas customers to strive for a grace period of 1-3 days，if the application is rejected due to unclear document marking，you need to immediately supplement supporting materials such as copies of the certificate of origin and transit confirmation letter from the overseas buyer，and re-submit the declaration within 24 hours.
Final compliant implementation: After the approval is passed，all documents shall be scanned，archived and retained for more than 5 years for subsequent joint verification by the customs and SAFE，to ensure the whole process is compliant without hidden risks.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The core of transit trade approval lies in the flow verification by the customs. You should avoid declaring transit goods as general imports, otherwise you will be required to pay import duties and value-added tax, and you will not be able to handle transit release later.
If the goods have arrived at the port but you have not declared transit in advance, you need to immediately submit the Transit Trade Situation Statement and the overseas buyer's delivery confirmation letter to the customs, apply for deleting the original declaration and re-declaring, and cooperate with the customs to verify the manifest information to ensure the actual flow of goods is consistent with the declaration, so as to avoid demurrage and detention charges caused by cargo detention in the port due to declaration errors. In addition, note that the manifest mark of transit goods must contain the word "transit", otherwise the customs system will automatically judge it as general import and trigger the mandatory tax collection process.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
Transit trade approval is closely related to the logistics path. If you choose a transit hub port such as Shanghai Yangshan Port, you need to confirm the transmission time of the transit manifest with the shipping company in advance, to ensure the manifest information is synchronized to the customs system 24 hours before the goods arrive at the port, otherwise the approval progress will be affected.
If the goods need to be stored in the port yard, you need to apply for a special storage area for transit goods, to avoid mixing with general imported goods which will lead to misjudgment during on-site inspection. In addition, if there are logistics abnormalities such as container rolling and space shortage, you need to immediately submit the Logistics Abnormality Statement to the customs, apply for extension of the approval time limit, and coordinate with the shipping company to prioritize the loading plan for transit goods, to avoid the goods being detained in the port for more than 7 days and triggering mandatory customs clearance.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Transit trade approval needs to take tax compliance into consideration simultaneously. If you fail to complete the foreign exchange receipt and payment filing with the SAFE, cross-border funds cannot be received and paid normally, which will trigger cross-border fund verification by the tax authority. Note that the profit accounting of transit trade must be consistent with the actual flow, to avoid being identified as profit shifting by the tax authority due to abnormal related party transaction pricing, which will trigger BEPS investigation.
In addition, if the transit goods involve VAT deferment, you need to submit the Transit Trade VAT Deferment Application to the tax authority after the customs approval is passed, no import value-added tax is required, which reduces capital occupation cost. If you fail to apply in time, you will be required to pay the value-added tax and late fee, which will affect the enterprise's tax credit rating.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
Transit trade approval is directly linked to foreign exchange receipt and payment compliance. You need to complete the record-filing of transit trade foreign exchange receipt and payment information on the SAFE application service platform. When filing, you need to upload core documents such as procurement contracts, transit agreements, bills of lading, to ensure the document information is consistent with the filing content.
If the difference between the actual foreign exchange receipt/payment amount and the declared amount exceeds 5%, you need to immediately submit the Foreign Exchange Receipt/Payment Difference Statement to the SAFE, to avoid being listed as a key supervised enterprise and affecting subsequent cross-border fund receipt and payment. In addition, if you use the CIPS system for RMB cross-border payment, you need to ensure the "transaction nature" field of the payment message is marked as "transit trade", otherwise it will be intercepted by the system and lead to payment failure.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
Transit trade approval shall be based on a legal and valid transit agreement. The agreement shall clearly stipulate the transit flow of goods, ownership transfer node, approval responsibility division and other contents, to avoid approval obstruction due to vague agreement clauses. If sensitive categories are involved, the qualification certificate of the overseas buyer shall be clearly specified in the agreement, to ensure the final flow of goods meets the national export control requirements.
In addition, if the customs approval is rejected, you shall hold the freight forwarder or supplier responsible according to the agreement clauses, and immediately supplement relevant supporting materials to re-apply for approval, to avoid compensation liability due to breach of contract. Note that the original copy of the transit agreement shall be retained for subsequent verification by the customs and SAFE.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
After the transit trade approval is passed, on-site inspection by the customs may be triggered. You need to prepare supporting materials such as certificate of origin, transit agreement, overseas buyer's delivery confirmation letter in advance, and cooperate with the customs inspection personnel to verify the actual flow of the goods.
If the goods mark is found inconsistent with the declaration during inspection, you need to immediately submit the Goods Mark Description to the customs, apply for correction of the declaration information, to avoid being identified as false declaration and triggering administrative punishment. In addition, note that the seal of the transit goods must be kept intact. If the seal is damaged, you need to immediately apply to the shipping company for re-sealing, and submit the Seal Replacement Description to the customs, to avoid being identified as goods replacement and leading to cancellation of the approval.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
Transit trade is not within the scope of export tax rebate. You should avoid declaring transit goods as general exports, otherwise it will be identified as export tax rebate fraud by the tax authority and trigger tax letter verification. The words "transit trade" shall be clearly marked on the documents, and physically isolated from documents of general export goods to avoid confusion.
If the tax authority makes a wrong judgment due to mixed storage of documents, you need to immediately submit the Transit Trade Situation Statement and relevant supporting materials to the tax authority, apply for cancellation of the export tax rebate declaration, and avoid being listed as a tax dishonest enterprise. In addition, all documents of transit trade shall be archived separately for verification during export tax rebate audit.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
Transit trade approval shall be included in the overall supply chain planning. Factors such as transit flow of goods, approval time limit, logistics cost shall be evaluated in advance, and the optimal transit port and approval path shall be selected. If multiple batches of transit goods are involved, an approval progress tracking mechanism shall be established to ensure the approval of each batch of goods is smoothly connected with the logistics nodes.
In addition, long-term cooperation shall be established with institutions with transit agency qualifications to optimize the approval process and reduce the risk of approval delay. If there is an approval abnormality, you need to adjust the supply chain plan immediately, coordinate with overseas customers to accept the change of transit path, and avoid supply chain fracture caused by cargo detention in the port.