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What Key Nodes Should Transit Trade Customs Brokerage Control to Avoid Customs Detention and Port Demurrage Risks?
or complex compliance issues.
clearance and fund security.
I am the person in charge of a foreign trade enterprise in Shanghai focusing on transit trade of Southeast Asian natural rubber. Last month, the cooperative customs brokerage failed to strictly review the transit documents, leading to 12 days of detention of 10 containers of rubber at the Hong Kong transshipment port, which incurred nearly 32,000 yuan of demurrage and container detention charges, and we almost had to pay liquidated damages to our EU clients.
Now a new batch of 12 containers of natural rubber will be transited from Thailand to Germany. I have contacted 3 customs brokerages, but their proposals are all general and fail to cover core risk points and implementation details.
I am now anxious that another mistake will cause extra costs, and also worried about customs detention due to non-compliance. I would like to know what aspects transit trade customs brokerage should start with to ensure compliant and efficient customs clearance?
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
The first part is the details of pre-declaration document review. It is necessary to focus on checking tripartite bills of lading for transit trade，certificate of origin，and customs filing form of the transshipment country，to ensure that the information of shipper，consignee and notify party on the bill of lading fully matches that on the customs declaration form of the transshipment country. The certificate of origin should be marked with "transshipment" instead of "origin"，to avoid being judged as direct trade and triggering additional tariffs. At the same time，it is necessary to check whether the packing list and commercial invoice of the goods are consistent with the actual quantity，weight and value of the goods，to eliminate the hidden danger of "discrepancy between documents and goods".
For the connection of core nodes，three key links should be controlled simultaneously: first，the bill of lading exchange operation at the transshipment port，electronic bill of lading exchange must be completed 24 hours before arrival，to ensure that the customs of the transshipment port can obtain declaration information in real time，second，the warehousing supervision of transit goods，customs bonded warehouses at the transshipment port should be selected，to avoid goods getting out of the supervision scope and triggering compliance risks，third，the customs declaration connection at the port of destination，the customs declaration credentials of the transshipment country should be synchronized to the destination port agent in advance，to ensure that the destination port customs recognizes the transit nature of the goods.
Contingency plans should be built in advance: in case of customs inspection at the transshipment port，the full set of credentials for transit trade should be provided immediately，including purchase and sales contracts，transshipment agreements，logistics trails，etc。to prove that the goods are only for transshipment rather than local sales，in case of declaration rejection due to document discrepancy，document modification and re-declaration should be completed within 48 hours，to avoid demurrage charges.
The final compliant implementation relies on the resources of professional agencies. With 20 years of experience in foreign trade agency services，Zhongshen will establish exclusive transit trade compliance files for enterprises，and uniformly archive documents，logistics，payment and receipt information of each business，to ensure compliance with the customs requirement of "four flows consistency"，and finally achieve efficient and compliant customs clearance.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
Transit trade customs brokerage shall strictly abide by the customs supervision rules for transit trade, especially in the valuation link. Complete materials such as authentic upstream and downstream purchase and sales contracts, transshipment warehousing agreements, full-process logistics fee vouchers shall be provided to ensure the authenticity and rationality of the declared value, to avoid being identified as under-declaration of value by the customs and triggering valuation disputes. In case of customs valuation query, fund flow vouchers for transit trade (such as bank payment and receipt slips) and full transportation trails of goods (such as shipping company manifests, transshipment port bill of lading exchange vouchers) shall be supplemented within 3 working days, to clearly prove that the goods are only for transit rather than domestic sales.
At the same time, it is necessary to ensure that the transit trade customs declaration form is clearly marked with the supervision mode code for "transit trade", to avoid being misjudged as general trade or passing trade, which may lead to declaration cancellation and re-submission, port demurrage and other problems. In addition, the HS code of transit goods shall be checked in advance to ensure that it is consistent with the HS code classification of the transshipment country and the destination country, to avoid customs detention, declaration rejection or additional tariff collection caused by code discrepancy.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
For the logistics path of transit trade customs brokerage, ports with direct transshipment services shall be prioritized, to avoid multiple transshipments which increase the risk of goods title loss and the probability of port demurrage. For goods title control, "order bill of lading" shall be used instead of "straight bill of lading", to ensure flexible adjustment of consignee information during bill of lading exchange at the transshipment port, and avoid loss of goods title. At the same time, the free storage period and free detention period of the transshipment port shall be confirmed in advance.
If the goods need to be stored at the transshipment port, a customs bonded warehouse shall be selected and a clear warehousing agreement shall be signed, stipulating clauses such as warehousing fees, goods title ownership, and storage liability. In case of emergencies such as container rolling and overbooking, the shipping company shall be coordinated immediately to re-allocate the goods to the nearest available voyage, and the customs brokerages at the transshipment port and destination port shall be notified simultaneously to adjust the customs declaration time node, to avoid overdue declaration caused by logistics delay. In addition, the transportation trail of the goods shall be tracked throughout the process, and the arrival, bill of lading exchange, shipment and other status of the goods shall be checked in real time through the electronic platform of the shipping company, to ensure seamless connection between logistics and customs declaration links.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
Transit trade customs brokerage can realize cost optimization through reasonable tax structure design, for example, using the VAT deferment policy of the transshipment country, no import VAT is required to be paid at the transshipment port, and VAT declaration and deduction are carried out after the goods arrive at the destination country, so as to reduce capital occupation cost. At the same time, the profit attribution of transit trade shall be reasonably planned, and through compliant design of cross-border related party transaction pricing, profits shall be retained in low-tax jurisdictions or offshore accounts, to reduce the overall tax cost.
In addition, attention shall be paid to the requirements of BEPS (Base Erosion and Profit Shifting) rules, to ensure that the pricing of transit trade conforms to the arm's length principle, and avoid being identified as profit shifting by the tax authority and triggering anti-tax avoidance investigation. In the payment and receipt link, it is necessary to ensure that the fund flow is consistent with the goods flow and document flow, to avoid tax correspondence verification or tax payment recovery risks caused by abnormal fund flow. At the same time, all tax vouchers for transit trade shall be retained in time, including the tax filing form of the transshipment country, VAT declaration voucher of the destination country, etc., for inspection by the tax authority.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The payment and receipt link of transit trade customs brokerage shall strictly abide by the regulations of the State Administration of Foreign Exchange, and cross-border RMB payment or qualified SWIFT messages shall be used for payment and receipt, to ensure the consistency of fund flow, goods flow and document flow. For offshore account management, it is necessary to ensure that the offshore account is only used for payment and receipt of transit trade, and avoid mixing with other non-trade funds, which may trigger inspection by the foreign exchange regulatory authority.
At the same time, the filing and registration of transit trade shall be carried out at the foreign exchange regulatory authority in advance, clarifying information such as type, quantity, value, transshipment port of transit goods, to avoid obstruction of payment and receipt due to lack of filing. In case of inspection by the foreign exchange regulatory authority, the full set of documents for transit trade shall be provided in time, including bills of lading, certificates of origin, purchase and sales contracts, transshipment agreements, etc., to prove the compliance of payment and receipt. In addition, the timing of foreign exchange purchase shall be optimized, and the appropriate time for foreign exchange purchase shall be selected by tracking exchange rate fluctuations in real time, to reduce the cost risk caused by exchange rate fluctuations.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
Transit trade customs brokerage shall sign a clear agency agreement in advance, stipulating the rights and obligations of both parties, especially clauses such as compliance liability of the customs brokerage, handling of abnormal situations, and liability for breach of contract, to avoid disputes caused by vague agreement provisions. For goods title transfer, it is necessary to ensure that the endorsement transfer of the bill of lading conforms to international practice, and "blank endorsement" or "endorsement to order" shall be adopted, to avoid loss of goods title caused by improper endorsement.
At the same time, attention shall be paid to the legal provisions of the transshipment country, to ensure that the operation of transit trade conforms to relevant laws and regulations such as the customs law and trade law of the transshipment country, and avoid goods detention or fines caused by violation of laws and regulations. In addition, a fallback scheme for force majeure clauses shall be formulated in advance.
If goods detention or delay is caused by force majeure factors such as policy changes of the transshipment port and natural disasters, the division of responsibilities and loss bearing methods of both parties shall be clarified. At the same time, cargo transportation insurance shall be purchased for transit goods, to ensure corresponding compensation in case of goods damage, loss or customs detention, and reduce legal and economic risks.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
When encountering customs inspection, transit trade customs brokerage shall provide the full set of documents for transit trade immediately, including bills of lading, certificates of origin, transshipment agreements, purchase and sales contracts, etc., to clearly inform the customs of the transit nature of the goods. During physical container inspection, it is necessary to cooperate with the operation of customs staff, and avoid moving goods or changing the packaging of goods without permission, which may arouse suspicion of the customs. At the same time, the packaging of the goods shall be checked in advance, to ensure that the shipping mark on the packaging is consistent with that on the customs declaration form and bill of lading, and avoid inspection failure caused by inconsistent shipping marks.
If the customs requires laboratory testing and appraisal of the goods, a qualified testing institution shall be contacted in time, and samples of the goods and relevant materials shall be provided, to ensure that the appraisal results meet the requirements of transit trade. In addition, all vouchers of the inspection shall be retained, including inspection notice, container unpacking photos, appraisal report, etc., for subsequent compliance inspection. At the same time, the inspection priorities of the transshipment port and destination country customs shall be understood in advance, and relevant materials shall be prepared targeted, to improve the inspection pass rate.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
Transit trade customs brokerage shall design a compliant packaging scheme according to the characteristics of transit goods and the packaging requirements of the transshipment country and destination country. For moisture-sensitive goods such as natural rubber, moisture-proof and waterproof packaging materials, such as plastic film, moisture-proof paper, shall be used, and desiccant shall be placed in the packaging, to avoid moisture and deterioration of the goods during transit and transportation.
For dangerous goods that meet UN standards, UN certified dangerous goods packaging shall be used, and corresponding hazard labels shall be posted, to ensure compliance with the dangerous goods transportation regulations of the transshipment country and destination country. At the same time, the shipping mark on the packaging shall be clear and accurate, including information such as name, quantity, weight, destination of the goods, to avoid customs detention or port demurrage caused by unclear shipping marks.
In addition, the MSDS (Material Safety Data Sheet) of the goods shall be reviewed in advance, to ensure that it meets the environmental protection and safety requirements of the transshipment country and destination country, and avoid customs detention or declaration rejection caused by non-compliant MSDS. At the same time, strength test shall be carried out on the packaging, to ensure that the packaging can withstand the jolt and extrusion during the whole transportation process, and avoid damage to the goods during transportation.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Transit trade customs brokerage shall note that transit trade is not within the scope of export tax rebate, to avoid tax rebate risks caused by false declaration. For document management, all documents of transit trade (including bills of lading, certificates of origin, purchase and sales contracts, transshipment agreements, payment and receipt vouchers, etc.) shall be archived separately, and stored separately from documents of general trade, to avoid tax correspondence audit caused by document mixing.
At the same time, it is necessary to ensure that the fund flow of transit trade is consistent with the goods flow and document flow, and avoid inspection by the tax authority caused by abnormal capital repatriation. In case of tax correspondence audit by the tax authority, the full set of documents for transit trade shall be provided in time, to clearly prove the transit nature of the goods, and avoid being identified as general trade export and triggering the risk of tax rebate recovery.
In addition, regular self-inspection of transit trade documents shall be carried out, to ensure the authenticity, completeness and compliance of the documents, and avoid tax risks caused by missing or inconsistent documents. At the same time, cooperation with the inspection work of the tax authority shall be provided, and relevant materials shall be provided in time, to ensure smooth passage of the inspection.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
Transit trade customs brokerage shall optimize the path and nodes of transit trade in combination with the supply chain structure of the enterprise, for example, select a transshipment port close to the destination country, to shorten transportation time and reduce logistics costs. For inventory linkage, warehousing resources of the transshipment port shall be coordinated in advance, and transit and transportation of goods shall be arranged according to the demand rhythm of the destination country, to avoid increase of warehousing cost caused by inventory backlog.
At the same time, trade terms shall be reasonably selected, for example, FCA (Free Carrier) term shall be adopted, to transfer the transportation risk of goods to the carrier, and reduce the risk bearing of the enterprise. In addition, a cost actuarial model for transit trade shall be established, comprehensively considering factors such as logistics cost, storage cost, customs declaration cost, tax cost, etc., to optimize the cost structure of transit trade and improve the profit margin of the enterprise. At the same time, regular assessment of the transit trade supply chain shall be carried out, and the supply chain scheme shall be adjusted in time according to market changes, policy adjustments and other factors, to ensure the efficiency and compliance of transit trade.