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Is Transshipment Trade Allowed in China in 2026? What Are the Core Compliance Boundaries and Requirements?
or complex compliance issues.
clearance and fund security.
I am the head of a natural rubber foreign trade enterprise based in Shanghai. I just received a large order of 300 tons of rubber from an EU client last week, which requires transshipment of rubber purchased from Thailand via China's Yangshan Port to the EU.
But I heard from a peer recently that a company was detained by customs for non-compliant transshipment trade last year, and its collection and payment account was frozen, leading to huge default damages to the client. I am really worried now. Is transshipment trade still allowed in China in 2026?
My cargo will arrive at the port next week. If transshipment is not allowed, I will not only pay 15% default damages to the client, but also bear thousands of dollars of detention fee every day, and even affect the company's customs credit rating. Can you clarify the current policy and how I can ensure compliance?
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
First of all，it should be clear that compliant transshipment trade is still allowed in China in 2026，but there are many common misunderstandings in the industry: many enterprises mistakenly believe that transshipment trade is just "passing through the port without stopping"，and there is no need for strict document review. They even use false bills of lading and contracts to simplify the process，which is the most easily stepped compliance red line.
If such misunderstandings are touched，it will trigger a series of negative reactions: Customs will determine it as "false declaration of trade method"，directly detain the cargo，resulting in not only high container detention fee and port detention fee，but also the collection and payment account being frozen by the bank，and even being listed on the customs dishonesty list，unable to enjoy foreign trade customs clearance facilitation policies for 3 years，which affects the normal operation of all subsequent foreign trade businesses.
The core method of physical risk isolation is: transshipment cargo must stay in bonded port area or special customs supervision area throughout the whole process，must not enter domestic non-supervised areas，let alone be processed or sold domestically. The title to goods is controlled by the enterprise throughout the whole process，avoiding the connection between the cargo and the domestic market.
Exclusive loss prevention tips: Entrust a professional foreign trade agency in advance to complete the pre-document review for consistency of three flows，to ensure that the information on the bill of lading，trade contract，and collection/payment voucher completely match，at the same time，purchase exclusive cargo insurance for transshipment trade，covering cargo loss and default damages caused by cargo detention and port detention，to minimize the loss caused by compliance risks.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
Customs declaration for transshipment trade must be strictly declared in accordance with the "bonded transit" method, and false declaration as "general trade" or "transit cargo" is prohibited. When declaring, you need to submit original bill of lading, transshipment trade contract, certificate of origin and other documents. Customs will focus on reviewing the logical consistency of the documents.
If the deviation of declared value from the market average price exceeds 15%, it will trigger a price assessment dispute and enter the customs price consultation procedure, resulting in cargo detention. In addition, the customs integration clearance system in 2026 has realized national port data sharing, and violation records at any port will be synchronized to the enterprise credit file, so it is necessary to ensure that the declaration information of each transshipment cargo is true and accurate to avoid losing big for small gains.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
The logistics route of transshipment trade should give priority to domestic bonded port area as the transit node, and cargo is prohibited from entering ordinary domestic port yards. After the cargo arrives at the port, it must directly enter the special yard of the bonded port area, and be supervised by the customs throughout the whole process. The enterprise should entrust a freight forwarder with bonded logistics qualification to operate to avoid loss of control of the title to goods.
The bill of lading should be "order bill of lading", and clearly indicate "only for transshipment transit" when endorsing. Blank endorsement is prohibited to prevent arbitrary transfer of title to goods. In case of container rolling by the shipping company, you need to apply for transfer to a transit ship of the same route calling at the bonded port area immediately, and apply for container detention fee reduction from the shipping company at the same time to avoid additional costs caused by logistics abnormalities.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
In 2026, transshipment trade in China does not need to pay domestic value-added tax, but it needs to meet the core condition that "the goods have not entered the domestic consumer market". If the goods stay outside the domestic bonded area for more than 72 hours, it will be regarded as "domestic sales" and need to pay back value-added tax and additional taxes.
In addition, if transshipment trade involves cross-border related party transactions, it is necessary to comply with BEPS (Base Erosion and Profit Shifting) rules to ensure that transaction pricing meets the arm's length principle, so as to avoid being identified as profit transfer by tax authorities and triggering tax inspection. Enterprises can apply for VAT deferral filing to link the tax declaration of transshipment trade with subsequent export business and reduce capital occupation cost.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The collection and payment of transshipment trade must strictly follow the principle of "collect first then pay" or "balance of payment and receipt". It is prohibited to pay all the payment in advance or receive excess foreign exchange.
When collecting and paying foreign exchange, it is necessary to clearly mark "payment under transshipment trade" in the SWIFT message or CIPS payment instruction, and attach the corresponding transshipment trade contract and copy of bill of lading. In 2026, the State Administration of Foreign Exchange (SAFE) has realized real-time comparison between foreign exchange collection and payment data and customs declaration data.
If the deviation between the collection/payment amount and the declared cargo value exceeds 10%, it will trigger foreign exchange verification and lead to account freezing. Enterprises need to complete the transshipment trade directory filing with SAFE in advance to avoid blockage of collection and payment.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The transshipment trade contract must clearly mark the "transshipment transit" clause to avoid being identified as a domestic purchase and sale contract. If it involves letter of credit settlement, you need to be alert to soft clauses set by the issuing bank, such as the clause requiring a domestic certificate of origin, which will make the transshipment trade unable to meet the requirements and trigger L/C refusal.
The transfer of title to goods must be completed by endorsement of bill of lading. It is forbidden to transfer title only by oral agreement or internal voucher. At the same time, you need to sign an exclusive guarantee for transshipment trade, which clarifies the supervision responsibility of the freight forwarder. If the cargo is lost or detained due to the forwarder's operation error, the freight forwarder shall bear all losses.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
Transshipment trade does not belong to the scope of export tax refund. Enterprises need to avoid mixing transshipment goods into general trade export goods to declare tax refund, otherwise it will trigger tax correspondence investigation, and even be identified as defrauding export tax refund. In 2026, the tax department has realized automatic system verification of "consistency of four flows", that is, contract flow, capital flow, cargo flow and invoice flow must be completely consistent.
Since transshipment trade has no domestic value-added tax invoice, it is necessary to separately mark "transshipment trade" in the declaration system, and file documents such as transshipment contract, bill of lading and collection/payment voucher, which must be retained for no less than 5 years. If the documents are lost or the filing is incomplete, the enterprise will be listed as a key monitoring object by the tax authority, which will affect subsequent export tax refund business.