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What core operation nodes must be implemented in the whole process of compliant transit trade?
or complex compliance issues.
clearance and fund security.
I am the person in charge of a foreign trade enterprise mainly engaged in high-end outdoor furniture. Last month, the anti-dumping duty on our product category in the United States was raised to 28%, which directly swallowed the already meager profit, forcing us to consider transit trade to bypass trade barriers. But last week, I heard from a peer in Shenzhen that his friend had his goods detained at the transit port for 12 days due to improper operation of the transit process.
He not only paid nearly 200,000 yuan in port detention fees and customer liquidated damages, but also was targeted by the customs and imposed a large amount of supplementary tax later. Now I am so worried that I can't sleep well for several consecutive days, just wanting to figure out what links are included in the whole process of transit trade, especially the key details such as document review, logistics node connection, abnormal emergency response, and how to ensure the final compliant implementation without stepping into pitfalls.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
First，for the pre-document review details，you need to verify the consistency of the certificate of origin，bill of lading and commercial invoice page by page. The certificate of origin issued by a third party in the transit country must avoid sensitive marks of the country of origin，and at the same time ensure that the invoice value conforms to the fair market price of similar products in the local transit country，so as to avoid triggering customs valuation warning.
For core node connection，seamless docking of "domestic shipment - transit port document exchange - destination port customs clearance" needs to be realized: when shipping domestically，the goods shall be marked as "transit goods"，the transit port agent shall complete document exchange，re-labeling and secondary customs declaration within 24 hours，and simultaneously update the logistics track to the system designated by the destination port customer，when clearing customs at the destination port，the full set of documents of the transit country shall be used，and any documents related to the country of origin are strictly prohibited.
Abnormal plans should be formulated in advance: if containers are detained at the transit port，the alternative transit country route should be activated immediately，and a professional team shall submit the local product procurement contract of the transit country to prove the authenticity of goods circulation，if the destination port customs questions the origin，chain evidence such as transit country warehousing records and logistics loading and unloading vouchers shall be provided within 3 working days.
For the final compliance implementation link，within 15 days after the completion of destination port customs clearance，the full set of transit and destination port documents shall be collected and handed over to the compliance team to complete the "four streams in one" verification，ensuring that the goods flow，document flow，capital flow and information flow are completely matched，and the files shall be kept for no less than 5 years.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
For transit trade customs declaration, the two modes of "direct transit" and "domestic transit" shall be strictly distinguished. For direct transit declaration, "transit trade (0110)" shall be filled in the "trade mode" column of the "exit goods declaration form", together with the transit country agency agreement and the final receiving contract of the destination port; for domestic transit, "bonded warehousing (1233)" shall be declared when entering the country, and "transit trade (0110)" shall be declared when leaving the country.
If the trade mode is filled in incorrectly during customs declaration, it will directly trigger customs valuation and control. In mild cases, the declaration form will be deleted and re-submitted, and in severe cases, it will be identified as general trade and be subject to supplementary tariff collection.
In addition, the deviation between the declared value of transit trade goods and the average transaction price of similar products in the transit country in the past 3 months shall not exceed 10%, otherwise the customs will launch a price questioning procedure and require supporting materials such as transit country procurement vouchers and warehousing records. If they cannot be submitted on time, the goods will be detained at the port until the review is passed.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The logistics route of transit trade shall give priority to ports with direct transit shipping space, and routes requiring multiple transits shall be avoided to reduce the risk of cargo right transfer. The selection of transit ports shall avoid regions with direct trade early warning cooperation with the destination country, and at the same time ensure that the transit agent has the bonded warehousing qualification recognized by the local customs. For cargo right control, "order bill of lading" shall be adopted, and the endorsement shall only be completed by the transit agent, and direct endorsement to the destination port customer is strictly prohibited; when exchanging documents at the transit port, the uniqueness of the container seal shall be checked.
If the seal is found damaged or inconsistent, photos shall be taken immediately for retention, and the shipping company shall be required to re-seal. In addition, the free detention period for container detention fees shall be agreed with the transit agent in advance. Generally, the free stacking period at the transit port shall be no less than 7 days. If the container detention fee is incurred due to the agent's operation error, it shall be clearly stipulated in the agency agreement that the agent shall bear the full amount.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The tax treatment of transit trade shall strictly follow the principle of "three streams in one". The capital flow shall be transferred through the account of the transit country, and direct remittance from the domestic account to the destination port customer account shall be avoided, otherwise it will be identified as general trade, and value-added tax and additional tax shall be paid.
If RMB cross-border payment (CIPS) is adopted, "transit trade payment" shall be clearly marked in the "transaction postscript" column of the payment message, and a copy of the tax registration certificate of the transit country agent shall be retained. In addition, the profit of transit trade shall be declared domestically, but it can enjoy the tax reduction and exemption policy for cross-border service trade.
The transit trade business record form and relevant documents shall be submitted to the competent tax authority in advance. If the record is not completed, the reduction and exemption cannot be enjoyed, and 25% corporate income tax shall be paid according to the profit of general trade.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The collection and payment of foreign exchange for transit trade shall be carried out through the cross-border settlement account filed with the foreign exchange administration. When receiving foreign exchange, "transit trade income" shall be filled in the "foreign-related income declaration form", together with documents such as the transit country bill of lading and commercial invoice; when paying foreign exchange, the domestic procurement contract, transit country agency agreement and destination port sales contract shall be provided to ensure that the goods flow and capital flow of foreign exchange collection and payment match.
If the deviation between the amount of foreign exchange received and paid and the contract amount exceeds 5%, a written explanation shall be submitted to the foreign exchange administration, otherwise it will be listed as a concerned account, affecting subsequent cross-border settlement business. In addition, it is strictly prohibited to use offshore accounts for foreign exchange collection and payment operations of transit trade, otherwise it will trigger the anti-money laundering monitoring of the foreign exchange administration, the account may be frozen, and subsequent compliance investigations shall be accepted at the same time.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
The agency agreement for transit trade shall clarify the cargo right custody responsibility of the transit agent to avoid cargo right loss caused by the agent's error. At the same time, the "force majeure exemption clause" shall be added, but the scope of force majeure shall be clearly defined, and delays caused by improper operation of the agent shall be excluded. If letter of credit settlement is involved, it shall be clearly stated in the letter of credit that mentioning the information of the country of origin is prohibited, and all documents shall be issued by the transit country institution, so as to avoid soft clauses leading to dishonor.
In addition, intellectual property filing shall be carried out in the transit country in advance. If the goods involve branded products, it shall be ensured that the transit country agent has the authorization letter from the brand owner, otherwise the goods may be detained at the transit port due to intellectual property infringement, and high infringement compensation and lawyer fees shall be paid later.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
When transit trade goods are inspected at the transit port, the transit agent shall be informed in advance to bring the full set of transit documents to the site, including the certificate of origin of the transit country, warehousing contract, loading and unloading records, etc. During inspection, cooperate with the customs to check the marks of the goods to ensure that all marks of the country of origin have been completely covered or removed. If any unremoved marks are found, the agent shall immediately arrange on-site rectification, and re-apply for inspection after the rectification is completed.
In addition, if the customs requires sampling inspection, the agent shall be required to select a local qualified third-party testing institution and obtain the test report within 3 working days. The report shall clearly indicate that the origin of the goods is the transit country. If the test report shows the information of the country of origin, the goods will be directly detained and cannot continue to be transited.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The packaging of transit trade goods shall be adjusted according to the climatic conditions of the transit port. If the transit port is located in a tropical region, moisture-proof packaging shall be adopted to avoid damage to the goods due to moisture.
If the goods are fragile, packaging materials with good cushioning performance shall be adopted, and marks such as "fragile" and "transit goods" shall be marked on the outside of the packaging to avoid violent operation during transit loading and unloading. In addition, if the goods involve dangerous goods, compliant packaging shall be selected according to the UN dangerous goods classification standard, correct hazard labels shall be pasted on the outside of the packaging, and the MSDS report recognized by the transit country shall be provided.
If the packaging does not meet the requirements, the goods will be prohibited from loading and unloading at the transit port, and the packaging needs to be replaced again. The resulting costs and delay losses shall be borne by the cargo owner.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
Transit trade is not within the scope of export tax rebate, and shall be strictly distinguished from general trade export. If transit trade goods are incorrectly declared for export tax rebate according to general trade, they will be listed as tax fraud suspects by the tax authority, the refunded tax and late fee shall be paid, and fines may be imposed at the same time. In addition, the documents of transit trade shall be kept separately, shall not be mixed with the export documents of general trade, and the retention period shall be no less than 10 years, so as to facilitate the subsequent verification by the tax authority.
If transit trade involves domestic procurement, it shall be ensured that the name and quantity of goods on the domestic procurement invoice are completely consistent with the transit trade goods, so as to avoid tax authority inspection caused by inconsistent documents. If inspected, the full set of transit trade documents shall be provided within 15 days, otherwise it will be identified as illegal operation.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
The supply chain structure of transit trade shall adopt the three-level structure of "domestic supplier - transit port agent - destination port customer", and direct procurement relationship with destination port customers shall be avoided to reduce the risk of trade barriers. For inventory linkage, a small amount of safety stock shall be reserved at the transit port to avoid shortage of destination port customers caused by domestic shipment delays.
The quantity of safety stock shall be set according to 10% of the monthly demand of destination port customers. In addition, the logistics cost and compliance risk of the transit port shall be evaluated regularly, and the alternative transit port shall be replaced every six months, so as to avoid supply chain interruption caused by problems in a single transit port. At the same time, a long-term cooperation agreement shall be signed with the transit agent to obtain more preferential warehousing and transit fees and reduce the overall supply chain cost.