Connect & Solve
Trade Q&A
What core competitive and cost advantages can fruits gain when adopting the South Korea re-export trade model for export?
or complex compliance issues.
clearance and fund security.
I am the person in charge of a foreign trade enterprise in China mainly engaged in citrus and mango export. I have been too worried to sleep these days. Last week, a batch of 12 containers of citrus was detained at the port for 3 days due to insufficient EU quotas.
I lost more than 100,000 yuan only on container detention fees and cargo damage. Besides, the EU imposes an additional 28% anti-dumping duty on our citrus, so direct export barely brings any profit. I heard from peers before that South Korea re-export trade can solve such problems, but we have never been exposed to this model and are not confident about it.
I want to ask in detail, what tangible advantages does fruit re-export via South Korea have? For example, can it really avoid EU tariff barriers, will the logistics timeliness be much slower than direct shipping, will the cost increase instead, is there any guarantee on compliance, and will the goods be detained by customs?
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
Under the traditional direct fruit export model，if there are barriers such as anti-dumping duties and quota restrictions in the target country，enterprises need to bear high tariff costs，and may also face port detention，cargo damage or even return of goods due to insufficient quotas，squeezing the profit margin to the critical point，and some orders even suffer losses. Taking the EU's additional 28% anti-dumping duty on citrus fruits from China as an example，based on the value of 120,000 euros per container，each container needs to bear an extra 33,600 euros of tariffs. Combined with costs such as port detention fees and cargo damage，the loss per container can exceed 50,000 euros.
Through South Korea re-export trade，enterprises can rely on South Korea's free trade agreement network to avoid anti-dumping duties and quota restrictions in target countries. For example，under the free trade agreement signed between South Korea and the EU，citrus fruits can enjoy zero-tariff access. After transporting the goods to South Korea，enterprises replace compliant documents such as the certificate of origin，and export to the EU with the identity of "South Korean transit origin"，which can directly avoid the 28% anti-dumping duty. Meanwhile，as a core logistics hub in Northeast Asia，Incheon Port has a 2-3 day transit timeliness for fruit re-export，which is only 1-2 days longer than direct shipping，and will not affect terminal delivery. The whole process adopts constant temperature storage to ensure the freshness of fruits.
The access threshold for fruit re-export trade via South Korea is relatively low. Enterprises only need to provide qualified initial documents such as certificate of origin and quality inspection report，and professional agents will complete links such as local document replacement，warehousing and transit in South Korea，without setting up a physical company in South Korea. Based on the above order with a value of 120,000 euros per container，the comprehensive cost of re-export trade (including transit fees，document fees，warehousing fees，etc.) is about 8,000 euros，which can save about 25,600 euros per container，and the income increases by more than 40%. In addition，enterprises can further reduce capital occupation costs through South Korea's VAT deferral policy，realize compliant cost reduction，and avoid the risk of customs detention caused by non-compliant documents.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
In the customs declaration link of fruit re-export trade via South Korea, focus should be put on the compliant conversion of the certificate of origin. Enterprises need to ensure that the product name, quantity and weight on the initial certificate of origin are completely consistent with the actual goods, to avoid South Korea customs valuation disputes caused by inconsistent documents. During transit in South Korea, the local agent shall submit the re-export declaration form to South Korea customs, and provide documents such as fruit quality inspection report and phytosanitary certificate to ensure that the goods meet the entry requirements of South Korea.
If the target country's customs doubts the authenticity of the certificate of origin, the local agent in South Korea can assist in providing supporting materials such as transit warehousing records and logistics bills of lading, to avoid customs detention caused by being judged as "false re-export". In addition, it should be noted that the customs declaration code of re-export goods shall be consistent with the code of the target country, to avoid valuation adjustment caused by code differences.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
In the logistics link of fruit re-export trade via South Korea, Incheon Port should be given priority as the transit hub, relying on its direct shipping network with major ports around the world to reduce transit timeliness. After the goods arrive in South Korea, they shall be stored in constant temperature storage facilities to ensure the freshness of the fruits. At the same time, the cargo ownership shall be strictly controlled, and the "order bill of lading" mode shall be adopted.
The bill of lading shall be endorsed and transferred only after the document conversion is completed, to avoid the loss of control of cargo ownership. In case of abnormal situations such as container rolling and full cabin, communicate with the logistics agent in advance for alternative routes, such as transferring to Busan Port for transit, and start the cargo damage insurance claim plan at the same time to ensure the safety of the goods. In addition, confirm the free storage period of South Korean ports in advance, which is generally 7 days. If extension is required, apply in advance to avoid container detention fees.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
In the tax aspect of fruit re-export trade via South Korea, enterprises can use South Korea's VAT deferral policy to delay the payment time of import VAT until after the goods are exported to the target country, without paying in advance when entering South Korea, which greatly reduces the capital occupation cost. At the same time, reasonably plan the pricing of related party transactions to ensure that the profit level of the South Korean transit link complies with local transfer pricing rules, to avoid tax audits caused by excessively high or low profits.
If an enterprise has an agency in South Korea, ensure that the pricing of agency fees conforms to the fair market level, to avoid being judged as related party transactions for profit transfer. In addition, pay attention to the tariff reduction and exemption policies of the target country, and combine with South Korea's free trade agreements to maximize tax cost reduction.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
In the payment collection and remittance link of fruit re-export trade via South Korea, the "cross-border RMB settlement" or "multi-currency payment and collection" mode shall be adopted to avoid exchange rate fluctuation risks. Enterprises shall provide the bank with a full set of re-export trade documents before receiving payment, including the initial bill of lading, South Korea transit bill of lading, certificate of origin, etc., to ensure the compliance of payment collection and remittance.
If an offshore account is used for receiving payment, ensure that the transaction records of the account fully match the re-export trade process, to avoid anti-money laundering investigations by banks caused by unclear transaction background. In addition, pay attention to the foreign exchange control policies of the target country, and confirm the time node of payment collection in advance to avoid delayed payment collection caused by foreign exchange control.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
In the legal aspect of fruit re-export trade via South Korea, a clear entrustment agreement shall be signed with the local agent in South Korea, stipulating clauses such as the responsibility for document conversion, ownership of goods, and handling of abnormal situations, to avoid legal disputes caused by agent errors. At the same time, the "re-export trade" clause shall be clearly specified in the contract signed with foreign buyers, to avoid buyers claiming compensation due to goods origin problems.
In case of anti-investigation by the target country's customs, prepare a full set of re-export trade documents in advance, including warehousing records, logistics bills of lading, quality inspection reports, etc., as legal supporting materials. In addition, pay attention to the intellectual property protection laws and regulations of South Korea, to avoid infringement disputes caused by fruit brands, packaging, etc.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
In the on-site inspection link of fruit re-export trade via South Korea, submit documents such as the fruit phytosanitary certificate and quality inspection report to South Korea customs in advance to reduce the probability of random inspection. If selected for inspection by South Korea customs, ensure that the goods packaging is intact and the seal is not damaged, and cooperate with the customs staff for unpacking inspection, to avoid cargo damage caused by improper operation.
If quality problems are found in the fruits during inspection, start the replacement plan in time, and the local agent will assist in replacing qualified goods to avoid affecting subsequent exports. In addition, note that the storage temperature of fruits shall meet the requirements of South Korea customs, generally 4-10℃ for citrus and 12-15℃ for mangoes, to avoid unqualified inspection caused by non-conforming temperature.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
In the packaging link of fruit re-export trade via South Korea, cushioning packaging materials that meet international transportation standards shall be used to avoid cargo damage during transit. Citrus fruits shall be packed in breathable cartons with pearl cotton cushioning lining to avoid peel damage caused by extrusion; mangoes shall be wrapped in foam net sleeves and then packed in hard cartons to prevent collision damage.
At the same time, clear cargo information shall be marked on the package, including product name, quantity, weight, origin, etc., to avoid wrong logistics delivery caused by unclear information. In addition, ensure that the packaging meets the entry requirements of South Korea customs, to avoid customs detention caused by prohibited components in packaging materials.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
In the export tax refund link of fruit re-export trade via South Korea, ensure that the documents for initial export to South Korea are completely matched with the documents for subsequent re-export to the target country, including information such as product name, quantity and weight. Enterprises shall submit tax refund declaration materials within 90 days after export, including the initial bill of lading, South Korea transit bill of lading, certificate of origin, etc., to ensure the consistency of four flows.
In case of tax correspondence investigation, provide a full set of re-export trade process records, including warehousing contracts, logistics invoices, agency agreements, etc., as supporting materials for tax refund compliance. In addition, note that the tax refund rate for re-export trade is the same as that for direct export, no additional application is required, and smooth tax refund can be achieved only by ensuring compliant documents.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
In the supply chain planning aspect of fruit re-export trade via South Korea, a "pre-inventory linkage" strategy shall be established. According to the order demand of the target country, transport the goods to the constant temperature storage facilities in South Korea in advance to ensure rapid order response. At the same time, adopt a "cost actuarial model" to comprehensively calculate the tariff cost and port detention risk cost of direct export, as well as the transit cost and document cost of re-export trade, to select the optimal export mode.
In addition, establish long-term cooperative relations with local agents and logistics enterprises in South Korea to obtain more favorable transit prices and priority shipping space, further reducing supply chain costs. An abnormal early warning mechanism shall also be established to monitor the changes of trade policies of the target country in real time, adjust the re-export strategy in time, and avoid risks caused by policy changes.