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What Compliance Procedures and Policy Requirements Should Be Followed for Conducting Transit Trade in Hainan?
or complex compliance issues.
clearance and fund security.
I am the head of a foreign trade company based in Zhejiang, mainly engaged in the export of Southeast Asian rubber wood furniture. Recently, we have a batch of rubber wood furniture worth 800,000 yuan planned to be transited to the EU via Hainan.
I learned that Hainan Free Trade Port offers tax reduction and logistics facilitation policies for transit trade, but I have never had any experience in operating transit trade in Hainan before. Last week, I heard from a peer that an enterprise had its cargo detained due to inadequate document review when doing transit trade in Hainan, and it lost 120,000 yuan just for port demurrage.
I am very anxious now: I want to seize the policy dividend to cut costs, but I am also afraid of stepping into pitfalls and encountering accidents. I want to know how to conduct the business compliantly in detail, and what core risks should I avoid?
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
To conduct transit trade in Hainan，the first step is to complete advance document review: ensure that all information on the bill of lading，packing list and certificate of origin of transit goods is completely consistent. In particular，the name，specification and weight of the goods must match the actual goods accurately，so as to avoid triggering high-risk customs inspection due to "discrepancy between documents and goods". For sensitive categories such as timber and furniture，you need to confirm the supervision requirements for transit goods in Hainan Free Trade Port in advance，and proactively provide special documents such as endangered species certificates to eliminate the risk of customs detention from the source.
Core nodes need to be connected accurately: First，for logistics nodes，prioritize ports with special transit yards such as Yangpu Port and Xiuying Port，to ensure that discharging，document exchange and yard transfer are completed within 24 hours after the cargo arrives at the port. This maximizes the use of Hainan Free Trade Port's 14-day free storage period policy and avoids high port storage charges. Second，for document circulation，entrust an enterprise with agency qualification for Hainan Free Trade Port to push electronic documents to the customs system simultaneously，so as to realize "paperless customs clearance" and shorten the customs clearance time to within 4 hours.
A complete contingency plan shall be formulated in advance: In case of customs valuation disputes，submit supporting materials such as upstream and downstream trade contracts and bill of lading endorsement records immediately to prove that no substantial transfer of cargo title has occurred. If there is a shipment delay，communicate with the client in the destination country in advance to adjust the delivery date，and activate backup resources of shipping companies. Finally，all documents must be retained for no less than 5 years to ensure compliance with the requirements of the *Measures for the Supervision of Transit Goods* of Hainan Free Trade Port and realize a closed compliance loop.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
The core of customs valuation for Hainan transit trade is to prove that no substantial transfer of cargo title has occurred. Complete documents such as upstream and downstream trade contracts, bill of lading endorsement records, and transit agency agreements need to be provided to avoid being classified as general import and export trade and levied taxes.
In case of a valuation dispute, you can apply for customs price consultation, submit a value assessment report issued by a third-party institution, and synchronize documents to the customs of the country of departure and destination country through the unified customs clearance system of Hainan Free Trade Port to prove the authenticity of the transit trade. It should be noted that transit goods must not be sold or used within the territory of Hainan Free Trade Port, otherwise you will be obligated to pay back taxes and even face administrative penalties.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
For the logistics route of Hainan transit trade, you should prioritize ports with special transit yards such as Yangpu Port and Xiuying Port to ensure direct transfer of goods and avoid entering warehouses outside the bonded area in the territory. In terms of cargo title control, you should adopt "order bill of lading", and only authorize the Hainan transit agency enterprise to handle document exchange during endorsement. Do not endorse directly to the buyer in the destination country to prevent early transfer of cargo title.
In case of container rolling or full shipping space, you need to sign a priority space allocation agreement for transit goods with the shipping company in advance, and reserve a 3-5 day shipment buffer to avoid default by the destination country client caused by shipment delay. In addition, you should pay attention to the free storage period policy: the maximum free storage period for transit goods in Hainan Free Trade Port is 14 days, and you need to complete transshipment before the expiration to avoid container detention fees.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
Hainan transit trade can enjoy value-added tax and consumption tax exemption policies, but you need to meet three core conditions: First, the goods only transit through Hainan Free Trade Port and do not enter the domestic territory for consumption; Second, all upstream and downstream contracts of the transit trade are signed by overseas entities, and the domestic agency enterprise only provides agency services; Third, all payments for goods are received and paid via cross-border RMB settlement (CIPS system) or foreign exchange accounts, and shall not enter domestic RMB settlement accounts (except for agency service fees).
In addition, you can apply for VAT deferral to delay the VAT payment obligation until after the goods leave the country, which eases the capital pressure of enterprises. It should be noted that if transit goods involve value-added operations such as processing and assembly, you cannot enjoy the tax exemption policy, and tax will be levied according to general import and export trade.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The collection and payment of foreign exchange for Hainan transit trade must strictly follow the principle of "consistency of three flows": capital flow must match document flow and cargo flow. Agency service fees must be collected separately and must not be mixed with payments for transit goods. When using the CIPS system for cross-border RMB payment, you must clearly mark "transit trade payment" in the message remarks to avoid being listed as an abnormal transaction by the State Administration of Foreign Exchange.
In terms of offshore account management, you should select a bank with offshore qualification in Hainan Free Trade Port, ensure that the account is only used for foreign exchange collection and payment of transit trade, and must not be used for daily domestic settlement. If there is any abnormal foreign exchange collection and payment, you must submit supporting materials of the transit trade to the State Administration of Foreign Exchange immediately to avoid the account being frozen.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The contract for Hainan transit trade must clearly specify the "transit agency" clause, distinguish the responsibilities of the agency enterprise and the cargo owner. The agency enterprise is only responsible for document and logistics operations, and does not bear cargo title risks.
A force majeure clause must be added to the contract, covering shipment delays caused by extreme weather such as typhoons and heavy rains in Hainan Free Trade Port, and clarify the division of responsibilities between the two parties. In terms of cargo title transfer, when a "telex release bill of lading" is required, you must ensure that the buyer in the destination country has paid the full payment for the goods to avoid out-of-control cargo title.
In addition, the intellectual property of the transit goods must be registered. If patents and trademarks are involved, you must submit an application for intellectual property protection filing to Hainan Customs in advance to avoid cargo detention due to infringement.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
For on-site inspection of Hainan transit trade, you need to prepare both paper and electronic versions of all documents in advance, and ensure that document information is completely consistent with the goods. In case of devanning inspection, you need to cooperate with customs staff to verify the name, specification and quantity of the goods, to avoid misjudgment caused by vague marking of the goods name.
For seal authenticity verification, you need to check the seal number provided by the shipping company before loading to ensure that it is consistent with the number on the bill of lading. If the seal is found damaged, you need to take photos for records immediately and notify the shipping company to replace the seal, to avoid being identified as cargo damage. In addition, you need to pay attention to arrangements for machine inspection: stack the goods neatly by category to avoid triggering secondary inspection due to blurred machine inspection images.