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What core compliance operation processes should Shaoxing enterprises control when carrying out international transit trade?
or complex compliance issues.
clearance and fund security.
I am the person in charge of a foreign trade enterprise mainly engaged in chemical fiber fabrics in Shaoxing. Last month, I heard that a peer had goods detained in a third country when conducting transit trade, and lost more than 100,000 yuan in port detention fees alone.
Now I have 20 containers of chemical fiber fabrics to be shipped to Germany. Due to the excessively high EU anti-dumping duty, I have to adopt transit trade, but I have never been exposed to transit trade before, so I am very worried. I want to know what specific processes are required for transit trade in Shaoxing?
How to choose a safe transit port? Are there any hidden compliance pitfalls in terms of documents? And how can I control the cost within an acceptable range, so that the final profit is not even enough to compensate for risk losses?
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
First，details of pre-document review: In view of the characteristics of Shaoxing textile transit trade，it is necessary to focus on verifying the consistency of the certificate of origin，commercial invoice and packing list provided by the third-country supplier. Any mark related to Shaoxing origin is strictly prohibited in the documents. At the same time，the authenticity of third-party documents should be verified to avoid deep inspection by the customs of the third country or the destination country triggered by "insufficient document traceability". In addition，it is necessary to cross-check the shipping order of Shaoxing factories with the documents after document exchange in the third country in advance to ensure that the name，quantity and weight of the goods are fully matched.
Core node connection link: Most Shaoxing goods are sent to transit ports through Ningbo Port. It is necessary to connect the "manifest pre-declaration" node of transshipment logistics well to ensure seamless connection between the shipping information of Shaoxing factories and the document exchange information of the transit port. Mature textile transit ports such as Singapore and Port Klang，Malaysia are preferred as transit ports. These ports are equipped with professional neutral packaging replacement warehouses，which can quickly complete the removal of origin marks and repackaging operations. For goods right control，negotiable bill of lading should be used to avoid loss of control over goods right.
Abnormal plan setting: Agree on the "inspection rapid response mechanism" with the transit port agent in advance. If the goods are detained and inspected by the customs of the third country，immediately submit the standby third-party supplier qualification certificate and goods purchase contract. In case of port detention，apply for a 7-14 day free storage period in advance，and the agent will assist in issuing a compliance statement for transit trade to the customs of the destination country，so as to avoid the destination country identifying the goods as direct imports and triggering anti-dumping duties.
Final compliance implementation: For the foreign exchange collection link，priority should be given to completing it through the CIPS RMB cross-border payment system to ensure the compliance of the collection and payment path. All documents should be retained for at least 5 years to meet the inspection requirements of local foreign trade supervision departments in Shaoxing. At the same time，cooperate with the agent to complete the compliance filing of each batch of transit trade to ensure that there are no compliance loopholes in the whole process.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
When Shaoxing enterprises carry out transit trade and declare customs at Ningbo Port, they should clearly declare the supervision method of "transit goods", and it is strictly prohibited to falsely declare them as general export goods, otherwise it will trigger export tax refund verification and trade nature questioning by the customs of the destination country. In the price review link, supporting materials such as purchase contracts and commercial invoices of third-country suppliers should be provided to ensure that the declared price conforms to the market fair price of similar goods in the transit port, so as to avoid document deletion and re-declaration or customs seizure caused by inconsistent price review.
In addition, the customs declaration form of the transit port and the import customs declaration form of the destination port should be completely consistent in the name, quantity and weight of the goods, forming a logical closed loop. If the customs pushes the order for review, the full set of supporting materials for transit trade should be submitted at the first time, including the warehousing receipt of the third-country warehouse, photos of repackaging, etc., to complete the customs declaration error correction quickly.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
When Shaoxing goods are sent to the transit port, priority should be given to the direct shipping schedule from Ningbo Port to the transit port to avoid the risk of container rolling of transshipment ships. If a transshipment ship is selected, the free storage period of the transshipment port should be confirmed in advance, and generally a free storage period of more than 7 days should be applied to reserve time for document exchange and repackaging.
For goods right control, the logistics provider should be required to issue an "order bill of lading", and the endorsement of the bill of lading only allows the operation of the designated transit port agent. Blank endorsement is strictly prohibited to avoid the misappropriation of goods right by a third party.
If there is a demand for port change, an application should be submitted to the shipping company 72 hours in advance, and the customs declaration information of the transit port and the destination port should be updated simultaneously to avoid container detention fees caused by information lag. In addition, the warehouse of the transit port should be a professional transit warehouse with bonded qualification to ensure that the operation of goods in the warehouse meets the customs supervision requirements.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
Shaoxing enterprises carrying out transit trade can apply for the VAT deferment policy of the third country, without prepaying value-added tax at the transit port, and carry out tax accounting after the goods arrive at the destination port, which effectively relieves the capital pressure. The pricing of cross-border related transactions should conform to the arm's length principle. The transaction price between Shaoxing factories and third-country suppliers should refer to the market fair price of similar goods, so as to avoid BEPS (Base Erosion and Profit Shifting) investigation triggered by pricing deviation.
In addition, it is necessary to carry out tax filing for transit trade in the local tax department of Shaoxing, and clarify that the income from transit trade is not included in the scope of export tax refund, so as to avoid letter investigation or fine caused by incorrect tax declaration. If multi-batch transit trade is involved, an overseas SPV company can be set up for fund collection, optimize the tax structure and reduce the overall tax cost.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The collection and payment of foreign exchange for Shaoxing enterprises carrying out transit trade should be completed through compliant channels, and the CIPS RMB cross-border payment system should be preferred. It is prohibited to use offshore accounts that have not been filed for fund transfer, otherwise it will trigger the inspection of the foreign exchange administration department. When collecting foreign exchange, the full set of documents for transit trade should be uploaded simultaneously, including the third-country bill of lading, commercial invoice, warehouse receipt, etc., to ensure that the capital flow is consistent with the document flow.
If there is a difference in foreign exchange settlement and account balancing, it is necessary to submit the cost accounting description of transit trade to the foreign exchange administration department in time, including supporting materials such as logistics fees, storage fees, agency service fees, etc., to avoid being identified as abnormal foreign exchange collection. In addition, the funds in the offshore account should be reconciled regularly, and all SWIFT messages or CIPS payment vouchers for collection and payment of foreign exchange should be retained for inspection by the foreign exchange administration department.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
When Shaoxing enterprises carry out transit trade, if they involve letter of credit settlement, they should focus on checking the soft clauses in the letter of credit, such as clauses that cannot be independently controlled like "a transit certificate issued by the customs of the destination country is required", so as to avoid refusal of payment caused by failure to meet the clauses. A formal transit trade agency agreement should be signed in the goods right transfer link to clarify the rights and responsibilities of the agent, especially the transfer time and conditions of goods right, so as to avoid goods right disputes caused by the agent's mistakes.
If the goods involve intellectual property rights, it is necessary to carry out intellectual property customs protection filing in the transit port and the destination country in advance to avoid customs seizure caused by infringement. In addition, a force majeure clause should be added to the agreement to clarify the way of bearing losses caused by force majeure such as policy changes in third countries and port strikes, so as to reduce the legal risks of enterprises.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
When Shaoxing goods are subject to on-site inspection at the transit port, a full set of transit trade documents should be prepared in advance, including the qualification certificate of the third-country supplier, goods purchase contract, warehouse receipt, etc., to cooperate with the customs to complete the unpacking inspection. For seal identification, attention should be paid to selecting qualified seal suppliers. After repackaging at the transit port, a new seal should be replaced, and the new seal number should be marked on the bill of lading to avoid deep inspection caused by inconsistent seals.
If the customs requires testing, cooperate with the agent to select a third-party testing institution recognized by the transit port. The test report should clearly state that the origin of the goods is the third country, and any origin mark of Shaoxing or China is strictly prohibited. In addition, after the inspection is completed, the customs inspection record and release certificate should be retained as supporting materials for subsequent customs clearance at the destination port.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
Shaoxing enterprises carrying out transit trade should clarify that transit trade is not within the scope of export tax refund, and it is strictly prohibited to declare the income from transit trade as export tax refund income, otherwise it will trigger tax letter investigation. It is necessary to ensure the "four-consistency of flows" of transit trade, that is, the capital flow, document flow, goods flow and contract flow are fully matched. The shipping order of Shaoxing factories, the third-country bill of lading, foreign exchange collection and payment vouchers, and agency agreement should correspond one by one.
For document filing, the full set of documents for transit trade should be retained, including third-country commercial invoices, packing lists, bills of lading, warehouse receipts, repackaging photos, etc., and the retention period shall not be less than 5 years. In case of tax letter investigation, the full set of supporting materials for transit trade should be submitted in time, and the operation process and income source of transit trade should be clearly explained, so as to avoid tax fines caused by the failure of letter investigation.