What compliance requirements must cross-border payments in transit trade meet for smooth foreign exchange settlement?

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  • May 25, 2026 at 17:36
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I am the person in charge of an enterprise mainly engaged in transit trade from Southeast Asia to the EU. Recently, for a rubber order transshipped from Malaysia to Germany, funds were suspended in the offshore account for 12 days due to unclear payment routes.

The customer is urging for delivery urgently, and our capital turnover has also been affected. I used SWIFT for payment several times before, but the handling fee is high and exchange rate fluctuation is large.

I heard that CIPS RMB payment is more cost-effective, but I do not know the specific operation process, and I am also afraid that the account will be frozen by the bank due to non-compliance. I would like to ask experts, how to make payment for transit trade to be compliant, efficient and cost-controlled?

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Expert Q&A

Grace Wang
Grace WangYears of service：10Customer Rating：5.0

Senior Foreign Trade ConsultantStart a Chat

First of all，pre-document review is the core foundation of transit trade payment. It is necessary to ensure complete consistency of the four key documents: Bill of Lading，Invoice，Contract，Manifest. In particular，the endorsement and transfer of the bill of lading should clearly reflect the transit link (such as marking "Transit Port: Singapore") to avoid the bank refusing to pay foreign exchange due to the lack of a logical closed loop of documents. It is recommended to submit the full set of documents to the bank for pre-review 3 working days in advance，and initiate the payment instruction after confirming no errors.

Secondly，prioritize compliant channels for core payment nodes. The CIPS RMB cross-border payment system is recommended，which has a clearing efficiency of T+1 fund arrival，a handling fee about 20% lower than SWIFT，and conforms to the policy orientation of RMB internationalization. During operation，it should be noted that the words "Transit Trade" should be clearly marked in the SWIFT message MT103 format，and correct transit port information should be filled in to ensure traceable capital flow.

Plans should be made for abnormal situations. In case of fund suspension，immediately contact the bank to check the message status，and verify whether there is any missing document or wrong information，if the exchange rate fluctuation exceeds 3%，you can lock the exchange rate through the bank's forward foreign exchange settlement and sale tool to avoid exchange rate loss. In addition，for foreign exchange receipt and payment via offshore accounts，transaction background supporting materials should be submitted to the bank every quarter to prevent the account from being classified as high risk.

Finally，attention should be paid to details for compliant implementation. The return path of offshore account funds should be consistent with the trade process，and fictitious transactions are strictly prohibited，when purchasing foreign exchange，prioritize the bank's preferential exchange rate periods (such as 9-11 a.m.)，or strive for better exchange rates through bulk foreign exchange purchase. Through the above steps，a safe，efficient and compliant closed loop of transit trade payment can be realized.

Reference: US Solar Tariffs: Impact on Southeast Asian Imports
Andy Guo
Andy GuoYears of service：3Customer Rating：5.0

Supply Chain Management ExpertStart a Chat

Transit trade payment should be closely connected with the customs declaration process, to ensure that the "Trade Mode" column of the customs declaration form is marked with "Transit Trade", and the transit port information is consistent with the payment message.

If the transit attribute is not indicated during customs declaration, the bank may refuse to pay foreign exchange due to doubts about transaction authenticity. If the customs declaration information is inconsistent with the payment information, you need to apply to the customs for modifying the customs declaration form within 3 working days, and update the bank documents simultaneously to avoid prolonged fund suspension.

Daniel Xu
Daniel XuYears of service：10Customer Rating：5.0

Director of Import & Export OperationsStart a Chat

Cargo right control in transit trade directly affects payment security. It is recommended to use Order B/L, and transfer cargo right through endorsement to ensure that cargo right is released after receiving payment.

For logistics routes, choose direct transit schemes to reduce intermediate links, and the information of the port of discharge and transit port on the bill of lading should match the payment message. In case of container rollover or port change, update the bill of lading immediately and notify the bank to ensure synchronization of capital flow and logistics, so as to avoid bank refusal of payment.

Eric Zhou
Eric ZhouYears of service：6Customer Rating：5.0

Senior Manager of Foreign Exchange & Tax RebatesStart a Chat

Attention should be paid to related party transaction pricing for transit trade payment. The comparable uncontrolled price method should be adopted to determine the fair price, and third-party market quotations should be retained as the basis to avoid BEPS investigation.

Use the VAT deferment policy to reduce double taxation, and the invoice should clearly indicate the tax treatment method for transit trade during payment to ensure tax compliance. In addition, withholding tax for non-resident enterprises should be calculated in advance to avoid insufficient payment after fund deduction.

Lucas Liu
Lucas LiuYears of service：8Customer Rating：5.0

Senior Operations ConsultantStart a Chat

Foreign exchange receipt and payment for transit trade must comply with foreign exchange management regulations. SWIFT messages should contain complete transaction information (buyer and seller, transit port, name and amount of goods), and transaction code 121010 should be filled in for CIPS payment.

Offshore accounts should be audited annually regularly to update information. If there is any abnormal transaction, take the initiative to explain to the bank to avoid account freezing. When settling foreign exchange, supporting materials proving consistency of the four streams should be submitted to ensure compliance.

Evelyn Li
Evelyn LiYears of service：3Customer Rating：5.0

Cross-border Compliance SupervisorStart a Chat

Soft clauses of the letter of credit should be avoided in transit trade payment. The contract should clearly specify the payment method (T/T/L/C), fund arrival time and liability for breach of contract.

For letter of credit review, soft clauses such as "bill of lading endorsed by the applicant" should be excluded to prevent loss of control over cargo rights. All payment-related legal documents (contracts, bills of lading, message receipts) should be retained as evidence for dispute resolution to reduce legal risks.

Jason Wu
Jason WuYears of service：10Customer Rating：5.0

International Logistics & Supply Chain ManagerStart a Chat

Transit trade payment should be included in the supply chain cost model. Prioritize the use of CIPS instead of SWIFT to reduce handling fees; lock the exchange rate through forward foreign exchange settlement and sale to reduce exchange rate loss; sign agreements with banks to obtain preferential rates for bulk foreign exchange purchase.

The payment cycle should be synchronized with the logistics cycle (for example, pay 30% of the payment after the goods arrive at the transit port), to avoid excessive capital occupation and improve the turnover rate.

Note: We respect all users' expressions; however, user comments represent their personal views only.

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