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How can professional foreign trade agencies realize full-link compliant operation of transit trade?
or complex compliance issues.
clearance and fund security.
I am the head of a foreign trade enterprise engaged in outdoor camping equipment in Shanghai. Last week, I just signed an order for 1,200 sets of tents from the EU.
However, the anti-dumping duty imposed by the EU on similar products made in China is as high as 42%, which directly erodes all profits, so I have to adopt transit trade to avoid the tariff. I heard from a peer before that the small agency he hired was investigated and detained by customs due to forged third-country documents, and the goods were detained at the port for 3 months with a loss of nearly 500,000 yuan.
Now I am eager to meet the delivery date but also afraid of stepping on pitfalls: I don't know the specific operation process of transit trade agency, how to ensure that the goods title is not lost, documents are compliant and free from inspection, as well as the charging standard of the agency and cost hedging methods. Can you explain it clearly to me?
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
The first part is the details of pre-document review，focusing on authenticity review of third-country certificates of origin: it is necessary to verify the actual production qualification and capacity matching degree of third-country suppliers，ensure that the production records and logistics trajectories corresponding to the certificates of origin are traceable，and eliminate false documents issued by shell enterprises -- this is the core prerequisite to avoid detention by EU customs. At the same time，it is necessary to simultaneously review the logical consistency of bills of lading，packing lists and commercial invoices to ensure that the goods description，quantity，weight and other information are completely matched.
The connection of core nodes needs to strengthen full-process monitoring of container replacement at transit ports and matching of foreign exchange receipt and payment entities: container replacement at transit ports shall be operated by compliant third-party logistics providers designated by the agency，and videos of sealing，container replacement and new seal application shall be taken throughout the process for evidence retention. The goods title certificate adopts order bill of lading and is fully escrowed by the agency to avoid out-of-control of goods title，the foreign exchange receipt and payment link shall be operated through compliant offshore accounts or CIPS system to ensure the logical closed loop between foreign exchange receipt entities and export documents，as well as between foreign exchange payment entities and import documents，so as to avoid early warning from the foreign exchange administration.
Abnormal response plans shall be deployed in advance: if EU customs questions the authenticity of the certificate of origin，supporting materials such as production material requisition forms of third-country factories and workshop monitoring screenshots shall be prepared in advance，if there is a risk of detention at the transit port，an agreement on extension of free storage period shall be signed with the port authority in advance，and the responsibility division standard for port detention fees shall be agreed at the same time，if there is a document discrepancy，the standby document replacement process shall be launched within 24 hours.
For the final compliance implementation，full-link documents shall be retained for at least 5 years，including third-country logistics documents，certificates of origin，foreign exchange receipt and payment vouchers，container replacement monitoring videos，etc。for post-event verification by customs and tax authorities，so as to ensure that the entire transit trade process fully complies with the compliance requirements of China，the transit country and the destination country.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
Transit trade customs declaration shall strictly follow the "double declaration" logic. The first declaration is the customs declaration for China's export to the transit country, which shall be marked with the attribute of "transit goods" to avoid being identified as general export; the second is the customs declaration for export from the transit country to the destination country, which shall match the third-country certificate of origin and corresponding logistics documents.
In case of valuation disputes, local purchase invoices and logistics cost vouchers of the transit country shall be prepared in advance to prove that the goods are only stored and container-replaced in the transit country without substantial processing. If there is a need to delete and re-declare, the application shall be submitted within 48 hours as stipulated by the customs of the transit country, and the pre-entry information of import declaration of the destination country shall be updated simultaneously to avoid verification initiated by the customs of the destination country due to inconsistent information.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The logistics path of transit trade shall give priority to routes with direct transit ports, such as Port Klang in Malaysia and Port of Singapore, so as to avoid increasing goods title risks caused by multiple transshipments. The container replacement operation shall select bonded warehouses with customs supervision qualification to ensure that the whole process of container replacement is under the supervision of customs, so as to avoid goods being swapped or seals being tampered with.
The free storage period shall be extended to 7-10 days by applying to the port authority in advance, so as to reserve sufficient time for container replacement and document review. In case of container rolling, the shipping company shall be coordinated immediately to arrange transshipment, and the customer in the destination country shall be notified simultaneously to adjust the expected delivery date, so as to avoid the risk of breach of contract. The bill of lading endorsement transfer shall adopt the method of "blank endorsement + designated title" to ensure that the goods can only be picked up by the designated consignee of the destination country.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The tax planning of transit trade shall focus on VAT deferral and compliance of related party transaction pricing. Domestic enterprises in China do not need to pay export VAT.
If the transit country link complies with the local bonded warehousing policy, VAT deferral can be applied for, and there is no need to pay import VAT in the transit country. Related party transaction pricing shall comply with the arm's length principle to avoid being identified as profit shifting by the tax authority due to excessively high or low profits in the transit link.
Local warehousing and container replacement cost vouchers of the transit country shall be prepared in advance to prove the rationality of pricing. If it involves withholding tax for non-resident enterprises, the tax treaty preference of the transit country shall be applied for in advance to reduce the withholding tax rate, and all tax vouchers shall be retained for at least 10 years for verification by the tax authority.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
The foreign exchange receipt and payment of transit trade shall strictly follow the principle of "three streams consistency", that is, the capital flow, document flow and goods flow are completely matched. It is forbidden to use personal accounts for foreign exchange receipt and payment, and the operation shall be carried out through enterprise accounts with cross-border foreign exchange receipt and payment qualification.
SWIFT messages shall be marked with the attribute of "transit trade" and matched with the corresponding bill of lading and certificate of origin numbers to avoid being marked as abnormal transactions by the SWIFT system. Offshore account management shall carry out regular compliance self-inspection to ensure that the account is only used for foreign exchange receipt and payment of transit trade, and avoid mixing with other irrelevant transactions. If a verification notice from the foreign exchange administration is received, full-link documents shall be submitted within 3 working days for explanation.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The transit trade contract shall clearly stipulate the node of goods title transfer, that is, after the goods are container-replaced at the transit port and new seals are applied, the goods title is transferred from the Chinese exporter to the consignee of the destination country, so as to avoid risks caused by early transfer of goods title. The "authenticity guarantee clause for certificate of origin" shall be added to the contract, and the transit country supplier shall guarantee that the issued certificate of origin is authentic and valid.
If losses are caused by false documents, the transit country supplier shall bear full responsibility. At the same time, force majeure clauses shall be added to clarify the responsibility division for force majeure events such as port detention and port closure at the transit port, so as to avoid unnecessary breach of contract disputes. In terms of intellectual property rights, it shall be ensured that the transited goods do not infringe the intellectual property rights of the destination country, and intellectual property customs filing shall be carried out in advance.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
For on-site inspection of transit trade, full-link documents shall be prepared in advance, including China's export declaration form, import declaration form of the transit country, certificate of origin, container replacement records, etc. If the customs of the transit country requires unpacking inspection, it shall cooperate with the customs staff for inspection, and take videos of the inspection process for evidence retention. The authenticity of seals shall be identified by using electronic seals recognized by customs, and the use of paper seals shall be avoided.
At the same time, the new seal number shall be synchronized to the consignee of the destination country and the agency immediately after container replacement, so as to ensure consistency when the customs of the destination country conducts inspection. If there is a testing demand, an application shall be made in advance for testing by a third-party authoritative institution in the transit country to ensure that the test report meets the requirements of the destination country.
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, and the attribute of "transit trade" shall be clearly marked in the tax system to avoid tax risks caused by false declaration of export tax rebate. Full-link foreign exchange receipt and payment vouchers, logistics documents, contracts and other documents shall be retained for the tax authority's tax rebate audit and verification.
If there is a capital return, relevant documents of transit trade shall be prepared in advance to prove that the capital return is used to pay the logistics and warehousing costs of the transit country, not for false transactions. Cross-month declaration shall strictly follow the regulations of the tax authority, and the tax declaration for transit trade shall be completed within the declaration period to avoid late fees.