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What are the core points of full-process compliant operation of reexport trade in the Chinese mainland?
or complex compliance issues.
clearance and fund security.
I am a foreign trade trader of solid wood furniture based in Dongguan. Last month, 3 containers of my goods shipped to the US were imposed a 220% anti-dumping duty, causing a loss of nearly 800,000 yuan.
Now I still have orders for 5 containers to fulfill, and I intend to avoid anti-dumping duties through reexport trade. But the small freight forwarder I worked with before did not even have a clear understanding of the documents required at the transshipment port, which led to the goods being detained at the port for 3 days and incurred more than 20,000 yuan of extra container detention fees.
Now I am both anxious and afraid of falling into pitfalls: I have no idea what the compliant process of reexport trade in the Chinese mainland is, what details of documents need to be reviewed in advance, how to choose a transshipment port to avoid customs detention, and how to hedge the extra costs brought by reexport trade. After all, the profit is already very thin, and I am really afraid that another problem will make me lose all my investment.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
First，conduct pre-document review and detail control: you need to check the authenticity of the certificate of origin of the transshipment country and third-party inspection certificate in advance，ensure that the goods description，quantity and weight on the documents are 100% consistent with the actual goods，and require the transshipment freight forwarder to provide the customs filing number of the transshipment port，to avoid machine inspection triggered by inconsistent documents.
The connection of core nodes shall be accurate: before departure from the Chinese mainland，you shall sign a goods ownership transfer agreement with the freight forwarder at the transshipment port，clarifying that container replacement and relabeling operations shall be completed within 24 hours after the goods arrive at the port. At the same time，you shall lock the RMB cross-border payment channel in advance through the CIPS system，to avoid cost losses caused by exchange rate fluctuations，after container replacement，you shall upload the new bill of lading and certificate of origin to the customer at the port of destination as soon as possible，to ensure customs clearance efficiency.
Abnormal response plans shall be established in advance: in case of random inspection by the customs at the transshipment port，you shall prepare the MSDS report of the goods and factory shipment details in advance，and a dedicated specialist will assist in communication，in case of port detention risk，you can activate the priority container pickup authority signed with the transshipment port wharf，and extend the container detention fee reduction and exemption period to 7 days.
The final compliant implementation shall be completed together with document filing: all transshipment documents，payment vouchers and goods ownership agreements shall be kept for more than 5 years，to ensure compliance with the verification requirements of the State Administration of Foreign Exchange for consistency of three streams，and avoid being listed as a key supervision object in the follow-up.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
When declaring customs for reexport trade, the departure port in the Chinese mainland shall declare the supervision mode of "reexport goods" (code 0110), and it is strictly prohibited to falsely declare it as "general trade", otherwise it will be identified as smuggling by the customs, triggering customs detention and fines. In the price review process, you shall provide the container replacement voucher at the transshipment port and the charging details of the third-party logistics, to ensure that the declared price is consistent with the market fair price, and avoid customs price review doubts.
If the customs returns the declaration, you shall supplement the certificate of origin of the transshipment country and the goods ownership transfer agreement within 3 working days, to avoid entering the account posting process; if you need to delete the declaration and re-declare, you shall submit the logistics connection voucher between the departure port in the Chinese mainland and the transshipment port at the same time, to ensure a logical closed loop.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
For the logistics path of reexport trade, priority shall be given to ports with direct transshipment routes, such as Port Klang in Malaysia and Port of Singapore, to avoid increasing the risk of cargo damage and port detention caused by stopping at multiple ports. In terms of goods ownership control, you shall adopt the "order bill of lading", and endorse and transfer the bill of lading to the customer at the port of destination immediately after the container replacement is completed.
At the same time, you shall require the transshipment freight forwarder to provide photos of the seal and on-site videos of the goods during container replacement, to ensure that the goods ownership is not intercepted. In case of container rolling, you shall sign a container rolling compensation agreement with the transshipment port freight forwarder in advance, agreeing to arrange priority shipping space within 48 hours, and clearly dividing the compensation responsibility for container detention fees; the free storage period can be extended to 10 days by applying to the wharf in advance, to reduce storage costs.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
Reexport trade can reduce tax costs through the VAT deferral policy. When enterprises in the Chinese mainland carry out reexport trade, if the goods do not enter the customs territory of the Chinese mainland, they can apply for exemption from value-added tax, and do not need to pay import value-added tax and consumption tax.
At the same time, they can use the tax agreement between the transshipment country and the destination country to apply for income tax reduction and exemption in the transshipment country, and need to prepare the company registration certificate and tax filing number of the transshipment country in advance. The pricing of cross-border related party transactions shall comply with the arm's length principle, to avoid being identified as profit shifting by the tax authorities and triggering BEPS investigation; for the withholding tax of non-resident enterprises, the tax rate can be reduced from 10% to 5% by applying for tax treaty treatment, to reduce tax expenditure.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The foreign exchange receipt and payment for reexport trade shall be completed through the CIPS RMB cross-border payment system, to avoid the exchange rate fluctuation risk brought by using the SWIFT system. At the same time, you shall ensure that the amount and time of foreign exchange receipt and payment are consistent with the contract agreement, and meet the requirements of the State Administration of Foreign Exchange for "consistency of three streams".
For offshore account management, if you use an offshore account for foreign exchange receipt and payment, you shall submit the account flow details to the State Administration of Foreign Exchange every month, to avoid being listed as an abnormal account. When settling foreign exchange and balancing accounts, you shall submit transshipment documents, logistics vouchers and goods ownership agreements at the same time, to ensure that the reason for foreign exchange settlement is compliant; when purchasing foreign exchange, you can adopt the "exchange rate locking" strategy, and lock the exchange rate 3 days in advance, to avoid losses caused by exchange rate fluctuations.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The reexport trade contract shall clearly define the force majeure clause, agreeing that the losses of goods detained at the port caused by policy changes of the transshipment port customs, natural disasters and other factors shall be borne by both parties in proportion. When settling by letter of credit, be alert to soft clauses, such as "the customs clearance certificate of the destination country customs shall be provided as the payment condition", which shall be revised to "the certificate of origin of the transshipment country and a copy of the bill of lading shall be provided as the payment condition".
A written agreement shall be signed for goods ownership transfer, clarifying that the ownership of the goods shall be transferred to the customer at the port of destination after the container replacement is completed, to avoid the freight forwarder intercepting the goods ownership. In terms of intellectual property rights, you shall complete the intellectual property customs protection filing in the transshipment country in advance, to avoid the goods being detained due to infringement.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
During customs inspection at the transshipment port, you shall prepare the MSDS report of the goods and the factory shipment inspection sheet in advance, to assist the customs in completing the unpacking inspection, and avoid the goods being sent for inspection due to failure to provide documents. For the authenticity identification of the seal, you shall check that the seal number is consistent with the number on the bill of lading, and check whether the seal has prying traces.
If the seal is found to be abnormal, you shall take photos immediately and notify the transshipment freight forwarder to replace the seal. For machine inspection skills, you shall stack the goods evenly, to avoid dense accumulation areas triggering machine inspection alarms; if you receive an inspection notice, you shall arrange a specialist to be present for coordination within 24 hours, to avoid delaying the inspection time and leading to port detention.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The packaging of reexport trade goods shall meet the packaging standards of the transshipment country and the destination country. Solid wood furniture shall be fumigated and provided with a fumigation certificate, to avoid being detained by the transshipment port customs due to carrying insects.
The moisture-proof reinforcement scheme shall be designed according to the climatic conditions of the transshipment port. For example, Port Klang in Malaysia has high humidity, so desiccants shall be placed in the packaging, and the goods shall be wrapped with waterproof film.
If dangerous goods are involved (such as paint for furniture), a UN dangerous goods packaging specification shall be prepared, and UN packaging containers that meet the standards shall be used, to avoid the goods being rejected due to unqualified packaging. The buffer packaging materials shall be environmentally friendly and meet the environmental protection requirements of the destination country, to avoid customs clearance obstruction due to non-compliant packaging materials.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
Reexport trade is not within the scope of export tax refund, and you shall avoid declaring reexport goods as general trade exports, otherwise it will trigger tax inquiry and adjustment, leading to temporary withholding of tax refund. In terms of document management, all documents of reexport trade (including transshipment documents, logistics vouchers, foreign exchange receipt and payment vouchers) shall be filed separately, and stored separately from the documents of general trade, to avoid confusion.
In case of the "consistency of four streams" verification by the tax authorities, you shall provide the goods ownership transfer agreement, the container replacement voucher at the transshipment port, and the charging details of the third-party logistics, to prove the consistency of capital flow, goods flow, document flow and contract flow. When declaring across months, the income from reexport trade shall be declared separately, and shall not be combined with the income from general trade for declaration, to avoid triggering tax early warning.