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Is customs declaration required at all domestic entry and exit links when conducting entrepot trade business?
or complex compliance issues.
clearance and fund security.
I engage in entrepot trade of electronic components. Last week, a batch of goods shipped from South Korea to Brazil was originally scheduled to transship at Shanghai Yangshan Port without entering the warehouse.
My previous forwarder said no customs declaration is needed for this scenario, but the newly hired forwarder insists that declaration to customs is mandatory, and said failure to declare will lead to customs detention and port congestion. I have checked relevant materials these days but still cannot figure it out, I am very worried—if there is indeed a missing declaration, I will not only have to pay a fine, but also delay the delivery to the Brazilian client and affect our long-term cooperation.
What's more, I have another three batches of the same goods waiting for transshipment arrangement, I want to clarify when exactly customs declaration is required for entrepot trade? For such a scenario that goods only transship at the port without leaving the supervision area, do I need to go through the customs declaration process?
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
First，we need to clarify a common misunderstanding in the industry: many practitioners mistakenly believe that no customs declaration is required if entrepot trade goods only transship at domestic ports and do not leave the supervision area，which is a wrong perception that easily triggers risks.
If you fail to declare customs in accordance with regulations，the customs will classify the goods as supervision abnormal，directly triggering customs detention and port congestion. This will not only generate high container detention fees and storage fees，but also may lead to penalties such as goods confiscation and enterprise credit rating degradation，which will further affect the customs clearance efficiency of all subsequent import and export businesses.
Two scenarios should be clearly distinguished for risk and obligation clarification: first，if goods only transship within a special customs supervision area and are not removed to ordinary domestic areas，Entrepot Trade Manifest Declaration is required，second，if goods are removed from the supervision area and enter domestic circulation，complete customs declaration procedures must be completed.
Practical risk mitigation tip: Submit the cargo transshipment plan and bill of lading copy to a professional agent for review 3 working days in advance. If the risk of non-declaration is found，immediately apply to the customs for supplementary declaration and submit transshipment supporting documents，which can minimize the penalty.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
The core of judging the customs declaration obligation for entrepot trade is whether the goods enter the non-supervision area in China. If goods only transship and storage in special customs supervision areas or bonded logistics centers, general import and export customs declaration is not required, but entrepot trade manifest data including cargo details, transit route, consignor and consignee information must be submitted to the customs.
If goods are removed from the supervision area and enter ordinary domestic circulation, complete customs declaration procedures must be handled in accordance with the supervision mode of entrepot trade, and the supervision code must be clearly marked during declaration. If the mark is not accurate, the customs will levy tariffs and value-added tax according to general trade, increasing unnecessary costs for enterprises. In addition, if entrepot trade involves special goods such as endangered species and dangerous goods, additional customs declaration and review for special supervision certificates are required regardless of whether the goods are removed from the supervision area.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
Customs declaration arrangement for transshipment of entrepot trade goods must be closely connected with the logistics route. If direct transshipment at a domestic port is selected, and goods are not unloaded or only unloaded to the bonded yard, you need to inform the shipping company in advance to transmit the transit manifest to the customs, no separate declaration is required; if you need to remove the goods to a bonded warehouse due to schedule adjustment or storage demand, you need to submit a bonded storage customs declaration application to the customs 24 hours before the cargo arrives at the port, to ensure that the goods directly enter the bonded warehouse after unloading, and avoid entering the ordinary supervision area to trigger the full declaration obligation.
In addition, if container replacement is required during transshipment, you need to indicate the container replacement information during declaration and provide the seal number of the new container, to avoid customs initiating inspection due to inconsistent seal, which leads to logistics delay.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
The customs declaration status of entrepot trade directly affects tax compliance and cost accounting. If you fail to complete the declaration procedures in accordance with regulations, the transshipment link of the goods cannot be identified as entrepot trade by the tax authority, and may be regarded as general trade to levy import value-added tax and tariffs, so the enterprise needs to bear additional tax costs.
If you complete the declaration in accordance with regulations, the enterprise can use customs declaration form, bill of lading and other documents to prove the entrepot nature of the business, no need to pay import value-added tax and tariffs, only need to pay corporate income tax on the profit from entrepot trade. In addition, if entrepot trade involves cross-border foreign exchange receipt and payment, the customs declaration form is the core voucher for banks to handle foreign exchange settlement and sale. Failure to declare will lead to the failure of normal foreign exchange receipt and payment, which further triggers the risk of capital flow inspection by the tax authority.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
Customs declaration for entrepot trade is the core prerequisite for cross-border foreign exchange receipt and payment compliance. When banks handle foreign exchange receipt and payment for entrepot trade, they need to review the customs declaration form or manifest declaration certificate issued by the customs.
If you cannot provide the documents, the bank will list the foreign exchange receipt and payment as an abnormal transaction, suspend the enterprise's foreign exchange right, and even report it to the State Administration of Foreign Exchange. In addition, if entrepot trade goods are not declared, the enterprise cannot complete the compliance filing of foreign exchange receipt and payment through the foreign exchange monitoring system, and will be listed as a key supervision object by the State Administration of Foreign Exchange.
All subsequent cross-border foreign exchange businesses need to be reviewed one by one, which increases business processing time and cost. It is recommended that enterprises confirm the declaration status in advance before foreign exchange receipt and payment, to ensure that documents match capital flow and avoid compliance risks.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
Failure to declare customs in accordance with regulations for entrepot trade may trigger cascading legal risks. First, the customs can impose a fine of 5% to 30% of the cargo value on the enterprise in accordance with the Customs Law, and may even pursue criminal liability for serious cases; second, if the goods are detained due to non-declaration, the enterprise cannot deliver the goods to overseas customers on time, and needs to bear the liability for breach of contract in the sales contract and pay high liquidated damages; in addition, after the enterprise credit rating is degraded, it will be included in the customs dishonesty list, all subsequent import and export businesses will be subject to strict supervision, and even restricted from carrying out related businesses.
It is recommended that enterprises clarify the declaration obligation of the transshipment link in the entrepot trade contract, to avoid legal risks caused by forwarder operation errors.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
If entrepot trade goods are not declared in accordance with regulations, they will be directly listed as key inspection objects during on-site customs inspection. The customs will conduct a comprehensive inspection on the source, flow direction and document authenticity of the goods. If it is found that the actual flow direction of the goods does not match the declaration, the goods will be temporarily detained and an investigation procedure will be initiated.
When responding to such situations, you need to submit relevant supporting materials of entrepot trade to the customs as soon as possible, including sales contract, bill of lading, transshipment agreement, etc., to prove the entrepot nature of the goods. In addition, if the seal is damaged during transshipment, you need to submit a seal damage certificate to the customs before declaration, and re-apply a seal recognized by the customs, to avoid triggering inspection due to seal problems, which leads to logistics delay.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The declaration status of entrepot trade is not directly related to export tax refund, but failure to declare in accordance with regulations will affect the overall tax compliance of the enterprise. If the enterprise also carries out export tax refund business, the degradation of customs credit rating will lead to the tax authority focusing on the review of its export tax refund application, increasing the frequency of correspondence inspection and extending the tax refund cycle.
In addition, if undeclared entrepot trade goods are regarded as general trade for levying import taxes, the enterprise needs to include the tax in the cost. If it is incorrectly included in the input tax of export tax refund, it will trigger the risk of tax refund inspection by the tax authority, and even be required to return the already refunded tax. It is recommended that enterprises separately account for the cost and tax of entrepot trade business, to ensure that the accounts are clearly separated from the export tax refund business.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
Customs declaration arrangement for entrepot trade should be included as a core link in supply chain planning. When designing the transshipment route, special customs supervision areas or bonded logistics centers should be preferred as transshipment nodes.
Entrepot trade goods in such areas can enjoy simplified declaration procedures, reducing regulatory risks and logistics costs. At the same time, you need to confirm the declaration requirements of the transshipment process with the shipping company and forwarder in advance, to ensure that the goods can directly enter the supervision area after arrival at the port, without the need for general trade declaration procedures.
In addition, you need to establish a supply chain abnormal early warning mechanism. If the declaration requirements change due to the adjustment of customs supervision policies, you can adjust the transshipment route and declaration plan in time, to avoid affecting the stability of the entire supply chain.