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Who Owns the Cargo Title Under Export Agency Mode, the Principal or the Agency Company?
or complex compliance issues.
clearance and fund security.
I am the head of a small home appliance manufacturing enterprise in Cixi, Zhejiang Province. Last week, I just exported a batch of European-style coffee makers worth 800,000 RMB to Hamburg Port, Germany via your company's agency service.
Today, on the customs declaration form provided by the freight forwarder, the cargo owner field is filled with your company's name, and I panicked immediately — we did not specifically clarify cargo ownership when signing the agency agreement before, and I have been seeing news of agency companies detaining cargo to offset debts these days. Now I am wondering: Who does the actual ownership of this batch of goods belong to, me or your company?
If the cargo gets stuck at the port due to customs clearance issues after arrival, who has the right to decide whether to return it or resell it? If your company has debt disputes, will this batch of my goods be implicated?
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
First of all，we need to point out a common misconception in the industry: Many principals mistakenly believe that if the customs declared cargo owner is the agency company，it means the agency owns the cargo，which is completely wrong.
This misconception can trigger a series of negative consequences: If the agency company has outstanding debt disputes，the court may seize the cargo based on customs declaration information，leading to high storage fees and port detention fees when the cargo is stuck at the port，and even the cargo will be auctioned off to offset debts，If there is abnormal customs clearance after the cargo arrives at the port，and the agency company cannot cooperate with disposal in time due to internal process restrictions，the best window for return or resale will be missed，resulting in total loss of the cargo.
Physical risk isolation measures: You must require the agency company to fill the consignee of the ocean bill of lading as the overseas buyer you designate，or deliver it to you after making a blank endorsement，At the same time，when making customs declaration，clearly mark in the "Remarks column" that "The actual cargo owner is XX Small Home Appliance Manufacturing Enterprise，XX Company is the export agency".
Exclusive stop-loss tip: Immediately sign a Supplementary Agreement on Cargo Ownership Confirmation for Agency Export with the agency company，clearly stipulate that "During the period from the cargo leaving the factory to delivery to the overseas buyer，all cargo ownership belongs to the principal，the agency company is only responsible for handling export compliance procedures and has no cargo ownership disposal right"，and send a copy of the supplementary agreement to the freight forwarder and customs broker for filing.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The filling of the cargo owner field in the customs declaration link only represents the "declaration liability subject", and has no direct connection with the actual cargo ownership, but it is necessary to ensure that the actual cargo owner information in the declaration remarks column is consistent with the agency agreement. If the actual cargo owner is not marked, customs will default to the declared cargo owner as the contact subject during inspection or detention.
At this time, the agency company needs to issue a Cargo Ownership Confirmation to transfer the disposal right to the principal. In addition, if the principal needs to modify the cargo owner information on the customs declaration, it must submit a Customs Declaration Modification Application before the cargo is loaded, and attach the agency agreement and cargo ownership certificate, otherwise it will be regarded as false declaration and face a fine of 10%-30% of the cargo value.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
In the logistics chain of agency export, the core carrier of cargo ownership is the ocean bill of lading. If the agency company holds the full set of original bills of lading, it can theoretically pick up the cargo at the destination port by virtue of the bill of lading, but this does not mean it owns the cargo ownership.
The principal must clearly require the freight forwarder to fill the "Notify Party" of the bill of lading as the principal's own enterprise when booking the space, and at the same time require the agency company to courier the original bill of lading to the principal within 24 hours after receiving it, or directly telex release it to the overseas buyer designated by the principal. If the cargo is stuck at the port, the principal can directly communicate the disposal plan with the destination port freight forwarder by virtue of the Cargo Ownership Confirmation, without going through the agency company as an intermediary, avoiding extra costs caused by delays in the agency process.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
According to the provisions on entrustment contracts in Articles 919 to 929 of the Civil Code, under the export agency mode, the agency company only handles export affairs as the trustee, and the cargo ownership belongs to the principal from beginning to end, unless the two parties clearly agree on the transfer of cargo ownership in the agreement. If the agency agreement does not clarify cargo ownership, once a dispute occurs, the court will determine the actual cargo owner based on evidence such as cargo purchase contracts, payment vouchers, and factory departure records.
It is recommended that the principal clearly stipulate in the supplementary agreement that: The agency company shall not use the cargo for mortgage, pledge or debt offsetting. If the cargo is seized due to reasons caused by the agency company, the agency shall pay a penalty equal to 120% of the cargo value, and at the same time agree that the court with jurisdiction over the dispute is the court located at the principal's place.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
In the cross-border foreign exchange collection and payment link, cargo ownership must be compliance-matched with the foreign exchange collection subject. If the agency company acts as the foreign exchange collection subject, it must be registered in the "Agency Export Foreign Exchange Collection Directory" of the State Administration of Foreign Exchange, and transfer the payment to the principal's account within 3 working days after receiving the foreign exchange, and shall not withhold it.
If the principal collects foreign exchange by itself, it must submit the Agency Export Cargo Certificate and cargo ownership confirmation to the State Administration of Foreign Exchange, otherwise it will be regarded as "declaration without cargo", listed on the SAFE's key supervision list, and affect subsequent export foreign exchange collection. In addition, if the cargo involves intellectual property rights, the intellectual property customs protection record must be processed in the name of the principal, to avoid cargo ownership disputes caused by filing in the name of the agency company.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
In the export tax refund link, cargo ownership must be consistent with the tax refund subject. Under the export agency mode, the tax refund subject is the agency company, but the principal needs to provide materials such as the Special VAT Invoice and Cargo Factory Departure Certificate to prove that the principal is the actual cargo owner. If the agency company does not mark "agency export" when filing for tax refund, it will be regarded as self-operated export by the tax authority.
At this time, if the agency company has a record of tax refund violation, the principal's tax refund qualification will be implicated. It is recommended that after each export, the principal requires the agency company to provide a screenshot of the tax refund declaration to confirm that the "agency export" flag is checked, and keep all certificates related to cargo ownership for use during tax correspondence inspection.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
From the perspective of the entire supply chain, cargo ownership must be synchronized with inventory management and order performance links. The principal needs to separately set up an inventory ledger for "agency export cargo" in the ERP system, clearly record information such as cargo outbound time, customs declaration number, bill of lading number, and synchronize with the agency company's customs declaration data in real time.
If the cargo is unsalable or returned, the principal can directly start the disposal process based on the inventory ledger, without relying on the agency company's internal data. In addition, when signing the annual agency agreement, it is recommended to stipulate an "exclusive cargo ownership clause", and take it as a core assessment indicator of agency services. If the agency company violates the cargo ownership agreement, the principal can immediately terminate the agreement and claim compensation for losses.