--- title: "How to Implement the Full Process of Transit Trade in Compliance, and What Core Nodes Need to Be Focused on?" description: "Facing the high anti-dumping duty imposed by the US on mechanical and electrical equipment，export enterprises that want to retain multi-million dollar orders through transit trade but are afraid of potential pitfalls need to carry out full-chain compliant operations from the dimensions of document review，core node connection，and emergency plan for abnormalities. They should prioritize controlling core elements such as authentic third-country certificates of origin and order bills of lading，lock..." url: "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html" language: "en" type: "Q&A" category: "Entrepôt Trade Q&A" datePublished: "2026-10-26" dateModified: "2026-10-26" brand: "Zhongshen Trading China" answerCount: 10 --- # How to Implement the Full Process of Transit Trade in Compliance, and What Core Nodes Need to Be Focused on? ## Question I am the person in charge of an enterprise based in Shanghai specializing in the export of mechanical and electrical equipment. Last week, we just signed a multi-million dollar order with a US customer, but the US still imposes a high anti-dumping duty on this type of product, which directly cuts nearly 30% of our profit. I previously heard from peers that transit trade can bypass anti-dumping barriers, but last month a friend's goods were detained by customs in a third country due to non-compliant transit documents. He not only spent more than 100,000 yuan on port detention fees, but also paid liquidated damages to the customer. The miserable situation of losing both money and goods still makes me shudder when I think about it. Now I want to retain this order through transit trade, but I am afraid of falling into pitfalls and have no clue at all: which transit port is reliable? How to prepare documents to avoid inspection? How to prevent goods from being intercepted during the transfer of title to goods? How to carry out compliant payment and receipt operations without triggering regulatory warnings? ## Answers ### Answer 1 — Best Answer Pre-document review is the core prerequisite for transit trade compliance. It is necessary to focus on verifying the validity of **authentic third-country certificates of origin**，ensure that the certificates are issued by formal chambers of commerce or customs of the third country，and that the headers of packing lists and invoices for mechanical and electrical equipment are completely consistent with those of the third-country supplier. At the same time，all traces of the original exporting country on the packaging and labels of the goods must be completely removed，for example，covering or replacing the original factory logo on the outer packaging of mechanical and electrical equipment，to avoid triggering anti-dumping investigations by the customs of the importing country due to "residual traces". Three key points must be controlled for the connection of core nodes: First，give priority to neutral ports not associated with free trade agreements as transit ports，such as Port Klang in Malaysia and Port of Singapore，to avoid regulatory warnings from the importing country. Second，**order bill of lading** must be used for title control，with the agency company as the only endorser，to lock the title to goods throughout the whole process and prevent malicious interception of goods by third-party transit operators. Third，**direct transit mode** is adopted for logistics. After the goods arrive at the transit port，the document exchange and transshipment are completed directly within the port area，without entering a third-party warehouse，to reduce the risk of inspection. Emergency plans for abnormalities must be formulated in advance: If the customs of the transit port initiates inspection，it is necessary to immediately provide materials such as the authentic purchase and sales contract of the third-country supplier and the storage and document exchange vouchers of the transit port，and the local agent will assist in communication. At the same time，special insurance for transit trade should be purchased in advance to cover sudden costs such as port detention fees，cargo damage and liquidated damages. For final compliant implementation，it is necessary to ensure the "consistency of three flows". For payment and receipt，**back-to-back letter of credit** or cross-border RMB payment through the CIPS system shall be adopted，so that the capital flow is completely consistent with the document flow and goods flow. All documents shall be kept for at least 5 years for subsequent verification by customs and tax authorities，so as to ensure a closed loop of compliance for the whole process. **status:** accepted **Author:** Kevin Lin **Date:** 2026-10-27 ### Answer 2 Customs declaration for transit trade must strictly follow the "neutral transit" logic. The customs declaration form of the transit port shall not contain any information about the source of goods from the original exporting country. For customs declaration in the importing country, bills of lading and certificates of origin issued by the third country must be used, and no copies of documents from the original exporting country shall be attached. If the customs of the importing country initiates a price review dispute, it is necessary to provide materials such as the authentic purchase and sales contract of the third-country supplier, storage and document exchange vouchers of the transit port, and logistics fee invoices as soon as possible to prove the real cost of the transit link, so as to avoid taking the ex-factory price of the original exporting country as the price review benchmark. At the same time, it is necessary to ensure that the "trade mode" column on the customs declaration form is accurately marked as "transit trade", which is completely consistent with the transaction type of the payment and receipt vouchers, to avoid customs suspension or order rejection caused by wrong classification of trade mode. **status:** suggested **Author:** Cindy Chen **Date:** 2026-10-27 ### Answer 3 For transit trade logistics, priority should be given to the "direct transit mode". After the goods arrive at the transit port, the document exchange and transshipment operations shall be completed directly within the port area. It is strictly prohibited to enter a third-party warehouse for unpacking, so as to avoid triggering doubts about the origin of goods due to contact with the third-country market. It is necessary to confirm the free storage period and container detention fee standard of the transit port in advance. For example, the free storage period for ordinary goods at Port Klang, Malaysia is 7 days, and the daily container detention fee after exceeding is 0.15% of the value of the container type. The transit operation must be completed within the free storage period. For title control, "straight order bill of lading" shall be adopted, and only the designated agency company shall be the only legal endorser to lock the flow of title to goods throughout the whole process. If there are abnormalities such as container rolling or overbooking, it is necessary to immediately activate the alternative shipping schedule plan, give priority to routes directly to the importing country, and minimize the risk of delivery delay. **status:** suggested **Author:** Michael Zhang **Date:** 2026-10-27 ### Answer 4 The core of tax planning for transit trade lies in using the tax policies of transit ports to reduce costs. Priority should be given to transit ports that support VAT deferral, such as Singapore and Hong Kong, China. There is no need to prepay import VAT during cargo transit, and VAT deduction or verification can be completed after the goods are exported to the final destination country, which can directly reduce the capital occupation cost. It is necessary to ensure that the pricing of cross-border related transactions complies with the arm's length principle, and the markup range of the transit link should be controlled within a reasonable range of the same industry (generally 5%-8%), to avoid being identified as profit transfer by the tax authority and triggering BEPS investigation. If cross-border RMB payment and receipt are adopted, the simplified tax filing policy for cross-border RMB settlement can be enjoyed, reducing the additional cost caused by exchange rate fluctuation. All tax vouchers shall be kept for at least 7 years for verification by the tax authority through letter inquiry. **status:** suggested **Author:** Linda Gao **Date:** 2026-10-27 ### Answer 5 Payment and receipt for transit trade must strictly follow the principle of "consistency of three flows". The capital flow must be completely consistent with the goods flow and document flow. Priority should be given to "back-to-back letter of credit" or CIPS cross-border RMB payment system for settlement, to avoid exchange rate fluctuation and sanction risks of the SWIFT system. The amount of payment and receipt must be completely consistent with the amount of invoices and bills of lading issued by the third country, and there shall be no unjustified difference. If the amount needs to be changed due to adjustment of logistics costs, it is necessary to provide the expense vouchers of the transit port to the bank for filing in advance. It is strictly prohibited to use unrecorded offshore accounts for payment and receipt, to avoid triggering anti-money laundering warnings from banks. If there is a suspension of payment and receipt, it is necessary to provide a full set of transit trade documents (certificate of origin, bill of lading, contract) within 3 working days to apply for unlocking, to ensure the normal circulation of funds. **status:** suggested **Author:** Daniel Xu **Date:** 2026-10-26 ### Answer 6 For transit trade, the responsibility of the transit service provider for title control must be clearly specified in the contract. It is agreed that if the goods are detained by customs or detained at the port due to operational errors of the transit operator, a liquidated damage of 10% of the value of the goods shall be paid, and all additional expenses shall be borne. The letter of credit terms must strictly avoid "soft traps", and unreasonable requirements such as "providing a copy of the certificate of origin of the original exporting country" and "the third-party inspection institution must be the one designated by the importing country" are strictly prohibited. At the same time, a "title retention clause" shall be added to clarify that the agency company is the sole holder of the title to goods before the full payment is received. The transit service provider shall be required to issue an irrevocable LOI (Letter of Indemnity) to ensure that the goods can only be picked up by the designated endorser, to prevent malicious interception by the transit operator. In case of force majeure events at the transit port (such as strike, port blockade), it shall be agreed in the contract that the delivery date shall be automatically extended for 15 days, and no liability for breach of contract shall be borne. **status:** suggested **Author:** Jason Wu **Date:** 2026-10-26 ### Answer 7 When transit trade goods are inspected at the transit port, the authenticity of the seal shall be checked as soon as possible to ensure that the seal number is completely consistent with that marked on the bill of lading and manifest. If the seal is damaged, it is necessary to immediately apply for re-sealing and take photos to keep evidence. During inspection, materials such as the certificate of origin issued by the third country, purchase and sales contract, and packing photos of the goods shall be provided to the customs to prove the transit attribute of the goods. It is strictly prohibited to carry any documents or goods labels of the original exporting country (such as original factory logo, origin label). If the customs requires unpacking inspection, it is necessary to cooperate with the on-site personnel to handle the goods with care to avoid damaging the packaging of the goods. At the same time, the whole inspection process shall be recorded by video to avoid cargo damage or cargo replacement. If there is any abnormality in the inspection result, the local contact person of the agency company shall immediately assist in communication and provide supplementary materials to prove the authenticity of the transit, so as to avoid the goods being forcibly cleared or returned to the original exporting country. **status:** suggested **Author:** Lucas Liu **Date:** 2026-10-26 ### Answer 8 Mechanical and electrical equipment in transit trade shall adopt completely neutral packaging. The outer packaging shall not contain any origin mark, original factory logo or brand name of the original exporting country, and only general information such as goods model and weight can be marked. The packaging scheme shall be customized according to the climate environment of the transit port. For example, the humidity of Port Klang, Malaysia is higher than 80% all year round, so thickened moisture-proof film and silica gel desiccant shall be added inside the packaging to avoid moisture damage to the precision parts of mechanical and electrical equipment. If the equipment contains accessory parts such as lithium batteries and lubricating oil, an MSDS report that meets the requirements of the transit port shall be prepared in advance to clarify the dangerous attributes of the goods. If the goods are dangerous goods under UN classification, certified UN special packaging must be used, and compliant dangerous goods labels must be pasted on the packaging to avoid detention and inspection by the customs of the transit port due to non-compliant packaging. **status:** suggested **Author:** Andy Guo **Date:** 2026-10-26 ### Answer 9 Transit trade is not within the scope of export tax rebate. It is strictly prohibited to declare transit goods as general trade exports to apply for tax rebate, otherwise it will trigger tax letter inquiry and even fines. It is necessary to strictly control the "consistency of four flows", that is, the transaction subjects, amounts and goods information of the contract flow, document flow, capital flow and goods flow are completely matched. All documents (including third-country certificate of origin, transit bill of lading, payment and receipt vouchers) shall be uniformly filed and kept for at least 5 years for subsequent verification by the tax authority. If the tax authority initiates a letter inquiry, it is necessary to provide materials such as logistics vouchers of the transit port, qualification certificate of the third-country supplier, and full tracking record of cargo transit within 10 working days to prove the authenticity of the transit transaction, so as to avoid being identified as false trade leading to tax payment or credit downgrade. **status:** suggested **Author:** Eric Zhou **Date:** 2026-10-26 ### Answer 10 For transit trade, a "three-party isolated" supply chain structure shall be established, that is, the exporter only connects with the agency company, and the importer only conducts transactions with the agency company, so as to avoid the failure of transit logic caused by direct contact between the buyer and the seller. A cost actuarial model shall be established, including storage fees, document fees, logistics insurance fees, certificate of origin processing fees of the transit port, etc. into the accounting. Generally, the comprehensive cost of transit of mechanical and electrical equipment accounts for about 3%-5% of the value of the goods. It is necessary to negotiate with the importer in advance to include the transit cost into the total price of the goods to avoid bearing it alone. It is recommended to adopt "FOB transit port" as the trade term, clarifying that the agency company is responsible for transporting the goods to the transit port and completing the transshipment operation, and the importer is responsible for the logistics and costs from the transit port to the final destination country, so as to avoid cost disputes caused by ambiguous agreement on trade terms. **status:** suggested **Author:** Grace Wang **Date:** 2026-10-26 ## Related Categories - [Import Agency Q&A](https://www.sh-zhongshen.com/en/qa/cat-import-agency/) - [Export Agency Q&A](https://www.sh-zhongshen.com/en/qa/cat-export-agency/) - [Export Tax Rebate Q&A](https://www.sh-zhongshen.com/en/qa/cat-export-tax-rebate/) - [Customs Declaration Q&A](https://www.sh-zhongshen.com/en/qa/cat-customs-declaration/) - [Freight Forwarding Q&A](https://www.sh-zhongshen.com/en/qa/cat-freight-forwarding/) - [Forex Settlement Q&A](https://www.sh-zhongshen.com/en/qa/cat-forex-settlement/) - [General Trade Q&A](https://www.sh-zhongshen.com/en/qa/cat-general-trade/) ## Related Resources - [Trade Services](https://www.sh-zhongshen.com/en/services/) - [Trade Cases](https://www.sh-zhongshen.com/en/cases/) - [Trade Wiki](https://www.sh-zhongshen.com/en/wiki/) - [Trade Class](https://www.sh-zhongshen.com/en/guide/) - [Global Trade Services](https://www.sh-zhongshen.com/en/country/) ## Structured Data ```json [ { "@context": "https://schema.org", "@type": "QAPage", "inLanguage":"en", "isPartOf": { "@id":"https://www.sh-zhongshen.com/en/#website" }, "publisher":{ "@id":"https://www.sh-zhongshen.com/en/#organization" }, "mainEntity": { "@type": "Question", "name": "How to Implement the Full Process of Transit Trade in Compliance, and What Core Nodes Need to Be Focused on?", "text": "I am the person in charge of an enterprise based in Shanghai specializing in the export of mechanical and electrical equipment. Last week, we just signed a multi-million dollar order with a US customer, but the US still imposes a high anti-dumping duty on this type of product, which directly cuts nearly 30% of our profit. I previously heard from peers that transit trade can bypass anti-dumping barriers, but last month a friend's goods were detained by customs in a third country due to non-compliant transit documents. He not only spent more than 100,000 yuan on port detention fees, but also paid liquidated damages to the customer. The miserable situation of losing both money and goods still makes me shudder when I think about it. Now I want to retain this order through transit trade, but I am afraid of falling into pitfalls and have no clue at all: which transit port is reliable? How to prepare documents to avoid inspection? How to prevent goods from being intercepted during the transfer of title to goods? How to carry out compliant payment and receipt operations without triggering regulatory warnings?", "answerCount": 10, "upvoteCount": 4, "datePublished": "2026-10-26T22:42:33Z", "dateModified": "2026-10-26T22:49:43Z", "author": { "@type": "Person", "name": "Zhongshen Trading China", "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html" } ,"acceptedAnswer": { "@type": "Answer", "text": "Pre-document review is the core prerequisite for transit trade compliance. It is necessary to focus on verifying the validity of authentic third-country certificates of origin ，ensure that the certificates are issued by formal chambers of commerce or customs of the third country，and that the headers of packing lists and invoices for mechanical and electrical equipment are completely consistent with those of the third-country supplier. At the same time，all traces of the original exporting country on the packaging and labels of the goods must be completely removed，for example，covering or replacing the original factory logo on the outer packaging of mechanical and electrical equipment，to avoid triggering anti-dumping investigations by the customs of the importing country due to "residual traces". Three key points must be controlled for the connection of core nodes: First，give priority to neutral ports not associated with free trade agreements as transit ports，such as Port Klang in Malaysia and Port of Singapore，to avoid regulatory warnings from the importing country. Second， order bill of lading must be used for title control，with the agency company as the only endorser，to lock the title to goods throughout the whole process and prevent malicious interception of goods by third-party transit operators. Third， direct transit mode is adopted for logistics. After the goods arrive at the transit port，the document exchange and transshipment are completed directly within the port area，without entering a third-party warehouse，to reduce the risk of inspection. Emergency plans for abnormalities must be formulated in advance: If the customs of the transit port initiates inspection，it is necessary to immediately provide materials such as the authentic purchase and sales contract of the third-country supplier and the storage and document exchange vouchers of the transit port，and the local agent will assist in communication. At the same time，special insurance for transit trade should be purchased in advance to cover sudden costs such as port detention fees，cargo damage and liquidated damages. For final compliant implementation，it is necessary to ensure the "consistency of three flows". For payment and receipt， back-to-back letter of credit or cross-border RMB payment through the CIPS system shall be adopted，so that the capital flow is completely consistent with the document flow and goods flow. All documents shall be kept for at least 5 years for subsequent verification by customs and tax authorities，so as to ensure a closed loop of compliance for the whole process.", "upvoteCount": 4, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#acceptedAnswer", "datePublished": "2026-10-27T00:32:43Z", "author": {"@type": "Person","name": "Kevin Lin","url": "https://www.sh-zhongshen.com/en/team/kevin-lin/"} } ,"suggestedAnswer": [ { "@type": "Answer", "text": "Customs declaration for transit trade must strictly follow the "neutral transit" logic. The customs declaration form of the transit port shall not contain any information about the source of goods from the original exporting country. For customs declaration in the importing country, bills of lading and certificates of origin issued by the third country must be used, and no copies of documents from the original exporting country shall be attached. If the customs of the importing country initiates a price review dispute, it is necessary to provide materials such as the authentic purchase and sales contract of the third-country supplier, storage and document exchange vouchers of the transit port, and logistics fee invoices as soon as possible to prove the real cost of the transit link, so as to avoid taking the ex-factory price of the original exporting country as the price review benchmark. At the same time, it is necessary to ensure that the "trade mode" column on the customs declaration form is accurately marked as "transit trade", which is completely consistent with the transaction type of the payment and receipt vouchers, to avoid customs suspension or order rejection caused by wrong classification of trade mode.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-2", "datePublished": "2026-10-27T00:23:45Z", "author": {"@type": "Person","name": "Cindy Chen","url": "https://www.sh-zhongshen.com/en/team/cindy-chen/"} } , { "@type": "Answer", "text": "For transit trade logistics, priority should be given to the "direct transit mode". After the goods arrive at the transit port, the document exchange and transshipment operations shall be completed directly within the port area. It is strictly prohibited to enter a third-party warehouse for unpacking, so as to avoid triggering doubts about the origin of goods due to contact with the third-country market. It is necessary to confirm the free storage period and container detention fee standard of the transit port in advance. For example, the free storage period for ordinary goods at Port Klang, Malaysia is 7 days, and the daily container detention fee after exceeding is 0.15% of the value of the container type. The transit operation must be completed within the free storage period. For title control, "straight order bill of lading" shall be adopted, and only the designated agency company shall be the only legal endorser to lock the flow of title to goods throughout the whole process. If there are abnormalities such as container rolling or overbooking, it is necessary to immediately activate the alternative shipping schedule plan, give priority to routes directly to the importing country, and minimize the risk of delivery delay.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-3", "datePublished": "2026-10-27T00:21:37Z", "author": {"@type": "Person","name": "Michael Zhang","url": "https://www.sh-zhongshen.com/en/team/michael-zhang/"} } , { "@type": "Answer", "text": "The core of tax planning for transit trade lies in using the tax policies of transit ports to reduce costs. Priority should be given to transit ports that support VAT deferral, such as Singapore and Hong Kong, China. There is no need to prepay import VAT during cargo transit, and VAT deduction or verification can be completed after the goods are exported to the final destination country, which can directly reduce the capital occupation cost. It is necessary to ensure that the pricing of cross-border related transactions complies with the arm's length principle, and the markup range of the transit link should be controlled within a reasonable range of the same industry (generally 5%-8%), to avoid being identified as profit transfer by the tax authority and triggering BEPS investigation. If cross-border RMB payment and receipt are adopted, the simplified tax filing policy for cross-border RMB settlement can be enjoyed, reducing the additional cost caused by exchange rate fluctuation. All tax vouchers shall be kept for at least 7 years for verification by the tax authority through letter inquiry.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-4", "datePublished": "2026-10-27T00:06:16Z", "author": {"@type": "Person","name": "Linda Gao","url": "https://www.sh-zhongshen.com/en/team/linda-gao/"} } , { "@type": "Answer", "text": "Payment and receipt for transit trade must strictly follow the principle of "consistency of three flows". The capital flow must be completely consistent with the goods flow and document flow. Priority should be given to "back-to-back letter of credit" or CIPS cross-border RMB payment system for settlement, to avoid exchange rate fluctuation and sanction risks of the SWIFT system. The amount of payment and receipt must be completely consistent with the amount of invoices and bills of lading issued by the third country, and there shall be no unjustified difference. If the amount needs to be changed due to adjustment of logistics costs, it is necessary to provide the expense vouchers of the transit port to the bank for filing in advance. It is strictly prohibited to use unrecorded offshore accounts for payment and receipt, to avoid triggering anti-money laundering warnings from banks. If there is a suspension of payment and receipt, it is necessary to provide a full set of transit trade documents (certificate of origin, bill of lading, contract) within 3 working days to apply for unlocking, to ensure the normal circulation of funds.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-5", "datePublished": "2026-10-26T23:23:25Z", "author": {"@type": "Person","name": "Daniel Xu","url": "https://www.sh-zhongshen.com/en/team/daniel-xu/"} } , { "@type": "Answer", "text": "For transit trade, the responsibility of the transit service provider for title control must be clearly specified in the contract. It is agreed that if the goods are detained by customs or detained at the port due to operational errors of the transit operator, a liquidated damage of 10% of the value of the goods shall be paid, and all additional expenses shall be borne. The letter of credit terms must strictly avoid "soft traps", and unreasonable requirements such as "providing a copy of the certificate of origin of the original exporting country" and "the third-party inspection institution must be the one designated by the importing country" are strictly prohibited. At the same time, a "title retention clause" shall be added to clarify that the agency company is the sole holder of the title to goods before the full payment is received. The transit service provider shall be required to issue an irrevocable LOI (Letter of Indemnity) to ensure that the goods can only be picked up by the designated endorser, to prevent malicious interception by the transit operator. In case of force majeure events at the transit port (such as strike, port blockade), it shall be agreed in the contract that the delivery date shall be automatically extended for 15 days, and no liability for breach of contract shall be borne.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-6", "datePublished": "2026-10-26T23:12:16Z", "author": {"@type": "Person","name": "Jason Wu","url": "https://www.sh-zhongshen.com/en/team/jason-wu/"} } , { "@type": "Answer", "text": "When transit trade goods are inspected at the transit port, the authenticity of the seal shall be checked as soon as possible to ensure that the seal number is completely consistent with that marked on the bill of lading and manifest. If the seal is damaged, it is necessary to immediately apply for re-sealing and take photos to keep evidence. During inspection, materials such as the certificate of origin issued by the third country, purchase and sales contract, and packing photos of the goods shall be provided to the customs to prove the transit attribute of the goods. It is strictly prohibited to carry any documents or goods labels of the original exporting country (such as original factory logo, origin label). If the customs requires unpacking inspection, it is necessary to cooperate with the on-site personnel to handle the goods with care to avoid damaging the packaging of the goods. At the same time, the whole inspection process shall be recorded by video to avoid cargo damage or cargo replacement. If there is any abnormality in the inspection result, the local contact person of the agency company shall immediately assist in communication and provide supplementary materials to prove the authenticity of the transit, so as to avoid the goods being forcibly cleared or returned to the original exporting country.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-7", "datePublished": "2026-10-26T23:09:07Z", "author": {"@type": "Person","name": "Lucas Liu","url": "https://www.sh-zhongshen.com/en/team/lucas-liu/"} } , { "@type": "Answer", "text": "Mechanical and electrical equipment in transit trade shall adopt completely neutral packaging. The outer packaging shall not contain any origin mark, original factory logo or brand name of the original exporting country, and only general information such as goods model and weight can be marked. The packaging scheme shall be customized according to the climate environment of the transit port. For example, the humidity of Port Klang, Malaysia is higher than 80% all year round, so thickened moisture-proof film and silica gel desiccant shall be added inside the packaging to avoid moisture damage to the precision parts of mechanical and electrical equipment. If the equipment contains accessory parts such as lithium batteries and lubricating oil, an MSDS report that meets the requirements of the transit port shall be prepared in advance to clarify the dangerous attributes of the goods. If the goods are dangerous goods under UN classification, certified UN special packaging must be used, and compliant dangerous goods labels must be pasted on the packaging to avoid detention and inspection by the customs of the transit port due to non-compliant packaging.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-8", "datePublished": "2026-10-26T22:56:31Z", "author": {"@type": "Person","name": "Andy Guo","url": "https://www.sh-zhongshen.com/en/team/andy-guo/"} } , { "@type": "Answer", "text": "Transit trade is not within the scope of export tax rebate. It is strictly prohibited to declare transit goods as general trade exports to apply for tax rebate, otherwise it will trigger tax letter inquiry and even fines. It is necessary to strictly control the "consistency of four flows", that is, the transaction subjects, amounts and goods information of the contract flow, document flow, capital flow and goods flow are completely matched. All documents (including third-country certificate of origin, transit bill of lading, payment and receipt vouchers) shall be uniformly filed and kept for at least 5 years for subsequent verification by the tax authority. If the tax authority initiates a letter inquiry, it is necessary to provide materials such as logistics vouchers of the transit port, qualification certificate of the third-country supplier, and full tracking record of cargo transit within 10 working days to prove the authenticity of the transit transaction, so as to avoid being identified as false trade leading to tax payment or credit downgrade.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-9", "datePublished": "2026-10-26T22:50:01Z", "author": {"@type": "Person","name": "Eric Zhou","url": "https://www.sh-zhongshen.com/en/team/eric-zhou/"} } , { "@type": "Answer", "text": "For transit trade, a "three-party isolated" supply chain structure shall be established, that is, the exporter only connects with the agency company, and the importer only conducts transactions with the agency company, so as to avoid the failure of transit logic caused by direct contact between the buyer and the seller. A cost actuarial model shall be established, including storage fees, document fees, logistics insurance fees, certificate of origin processing fees of the transit port, etc. into the accounting. Generally, the comprehensive cost of transit of mechanical and electrical equipment accounts for about 3%-5% of the value of the goods. It is necessary to negotiate with the importer in advance to include the transit cost into the total price of the goods to avoid bearing it alone. It is recommended to adopt "FOB transit port" as the trade term, clarifying that the agency company is responsible for transporting the goods to the transit port and completing the transshipment operation, and the importer is responsible for the logistics and costs from the transit port to the final destination country, so as to avoid cost disputes caused by ambiguous agreement on trade terms.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/transit-trade-compliance-process-core-operation-nodes.html#suggestedAnswer-10", "datePublished": "2026-10-26T22:49:43Z", "author": {"@type": "Person","name": "Grace Wang","url": "https://www.sh-zhongshen.com/en/team/grace-wang/"} } ] } }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ {"@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.sh-zhongshen.com/en/"},{"@type": "ListItem", "position": 2, "name": "Q&A", "item": "https://www.sh-zhongshen.com/en/qa/"},{"@type": "ListItem", "position": 3, "name": "Entrepôt Trade Q&A", "item": "https://www.sh-zhongshen.com/en/qa/cat-entrepot-trade/"} ,{"@type": "ListItem", "position": 4, "name": "How to Implement the Full Process of Transit Trade in Compliance, and What Core Nodes Need to Be Focused on?"} ] } ] ```