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What dual compliance review standards of multiple national customs authorities need to be met when drafting the full set of declaration documents for transit trade?
or complex compliance issues.
clearance and fund security.
I am the person in charge of a foreign trade enterprise exporting hardware and building materials, and this is my first time handling transit trade: the goods are shipped from Shanghai Port, transited via Port Klang, Malaysia to Los Angeles, the United States. The documents I submitted for the first time last week were rejected by Malaysian customs, which caused the container to be detained at the port for 3 days, incurring more than 2,000 yuan in port detention fees, and I am so worried that I cannot sleep now.
The freight forwarder I hired before only said the documents should meet transit trade requirements, but did not tell me how to draft them specifically, I am completely confused now - how to fill in the port of loading on the bill of lading? Should I apply for the certificate of origin from the transit country or China?
How to match the supporting documents for foreign exchange receipt and payment with the customs declaration form? I am afraid that if I make mistakes again this time, I will not only have to pay more port detention fees, but also may delay the delivery time for the US customer. Could you please teach me how to draft transit trade documents correctly?
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
First，you need to complete the consistency review of pre-documents: all documents shall be drafted around the core logic that "the goods are only transited in the transit country and do not enter the local market". Focus on checking the key information of the first-leg bill of lading，second-leg bill of lading and non-reprocessing certificate issued by the transit country，to ensure that the port of loading，port of destination，cargo name and quantity are fully matched. It is strictly prohibited to have content where the origin country information conflicts with the supervision requirements of the final destination country.
Three key points shall be clarified for core node connection: First，for bill of lading drafting，the first-leg bill of lading shall show the port of loading as Shanghai and the port of discharge as Port Klang，the second-leg bill of lading shall be issued by the freight forwarder of the transit country，showing the port of loading as Port Klang and the port of destination as Los Angeles，and the container number and seal number on the two bills of lading shall be completely consistent. Second，you shall apply for the transit certificate from the transit country (instead of the Chinese certificate of origin)，marked with "transit only，no processing". Third，the foreign exchange receipt and payment documents shall match the trade mode "transit trade" indicated on the customs declaration form，with the transit port information noted.
You shall formulate an abnormal emergency plan in advance: if the customs of the transit country requires supplementary documents，you shall submit supporting documents such as warehousing photos of the transit country warehouse and non-reprocessing certificate within 24 hours，if there is information inconsistency，you shall immediately contact the freight forwarder of the transit country to modify the second-leg bill of lading，and update the customs declaration form information simultaneously.
For final compliance implementation，you shall complete the pre-review of the full set of documents one day before customs declaration，to ensure that all documents meet the dual compliance requirements of the transit country and the destination country，and avoid risks of port detention and cargo seizure caused by inconsistent documents.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
The drafting of transit trade customs declaration forms shall strictly follow the customs valuation rules. The "transit trade" option must be selected in the trade mode column, and the name of the transit port and the number of the second-leg bill of lading shall be clearly indicated in the remarks column.
The cargo value on the customs declaration form shall be filled with the actual transaction price of the transit link, and it is strictly prohibited to directly fill in the total transaction price from China to the final destination country, otherwise it will trigger customs valuation disputes, and even be identified as false declaration of trade mode. In addition, the attached sales contract shall clearly stipulate the clause that "the goods are only stored and transited in the transit country, without any processing or sales", and the contract amount shall be completely consistent with the cargo value on the customs declaration form, to avoid document cancellation and re-declaration caused by inconsistent price logic, which will extend the customs clearance time.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The drafting of transit trade logistics documents shall focus on cargo title control and route compliance, with the core being the standardized drafting of the dual bill of lading system: the first-leg bill of lading is issued by the domestic freight forwarder, with the shipper as the domestic enterprise and the consignee as the designated freight forwarder of the transit country; the second-leg bill of lading is issued by the freight forwarder of the transit country, with the shipper as the freight forwarder of the transit country and the consignee as the US customer. The container number, seal number and cargo name on the two bills of lading must be completely consistent, and any information deviation is strictly prohibited.
In addition, the warehousing receipt of the transit country shall be clearly marked "for transit storage only", and submitted to the domestic customs broker simultaneously as core supporting documents for transit trade. You can also apply for a 7-14 day free storage period in the transit country with this document, to avoid extra container detention fees caused by missing documents.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
The drafting of transit trade tax documents shall center on the core of "cross-border tax deferral and compliance isolation". First, you need to prepare the official certificate issued by the transit country stating that "the goods have not entered the local market and have not undergone any processing", as the core basis for applying for VAT deferral, to avoid being charged domestic sales VAT by the transit country.
The domestic tax filing documents shall clearly indicate the trade mode as "transit trade", and it is strictly prohibited to mistakenly fill in as "general trade export", otherwise it will trigger export tax refund review risks, and you may even be required to repay the refunded tax. In addition, the foreign exchange receipt and payment vouchers shall be completely consistent with the transaction amount and counterparty on the tax filing form, to ensure that the capital flow is consistent with the tax flow, and avoid cross-border tax inspections caused by inconsistent tax logic.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
The drafting of transit trade foreign exchange receipt and payment documents shall strictly meet cross-border capital supervision requirements. The SWIFT message shall clearly indicate "transit trade payment" in the remarks column, and note the name of the transit port and the number of the second-leg bill of lading at the same time, to ensure that the logic of capital flow and cargo flow is consistent. When settling foreign exchange, you shall submit scanned copies of the first-leg bill of lading, second-leg bill of lading and non-reprocessing certificate of the transit country to the bank.
The cargo name, quantity and amount of all documents shall be completely matched, and it is strictly prohibited that the deviation between the capital amount and the cargo value exceeds 5%, otherwise it will trigger abnormal capital inspection by the foreign exchange administration, leading to delayed foreign exchange settlement. In addition, if an offshore account is used for foreign exchange receipt and payment, you shall keep the account transaction flow and corresponding documents simultaneously for subsequent supervision and inspection.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The drafting of legal documents related to transit trade shall focus on cargo title protection and risk mitigation. The sales contract shall clearly stipulate the clause that "the goods can only be stored during the period in the transit country, and shall not be processed or sold", and clarify the boundary of responsibilities of the transit freight forwarder, strictly prohibiting them from disposing of the cargo title without authorization.
For high-value goods, you may require the freight forwarder of the transit country to issue a Letter of Guarantee for Non-Transferable Cargo Title, clarifying that the cargo title belongs only to the domestic enterprise until the second-leg bill of lading is issued. In addition, an "intellectual property compliance clause" shall be added to the contract, stating that the goods do not infringe the intellectual property rights of the transit country and the final destination country, to avoid cargo seizure caused by intellectual property disputes. Meanwhile, the governing law and the court with jurisdiction over dispute resolution shall be clearly specified to reduce cross-border legal risks.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
The drafting of supporting documents for on-site inspection of transit trade shall focus on the core evidence of "no processing, transit only". You shall prepare in advance the warehousing photos of the transit country's warehouse, photos of container seals, and non-reprocessing certificate, and the seal number on all documents shall be completely consistent with that on the bill of lading and customs declaration form.
If you receive a customs inspection notice, you shall clearly indicate in the reply that "the goods are for transit trade, only stored in the transit country, without any processing or modification", and submit the seal photos as supporting evidence simultaneously, to avoid being required to conduct unpacking inspection. In addition, the inspection documents shall be separately marked "for transit trade only", and sorted into paper versions as required by the customs, to ensure that on-site inspection personnel can quickly obtain core information, shorten the inspection time, and avoid extra port detention fees.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The drafting of tax refund documents related to transit trade shall be strictly distinguished from that of general trade. First, the trade mode shall be clearly marked as "transit trade" on the customs declaration form, and it is strictly prohibited to mistakenly fill in as "general trade export", otherwise it will trigger export tax refund review risks. Transit trade is not within the scope of export tax refund, so there is no need to submit export tax refund declaration documents.
However, if the enterprise mistakenly mixes transit trade payments into general trade foreign exchange receipts, it shall immediately submit a Statement on Transit Trade Funds to the tax authority, clearly distinguishing the capital flow of transit trade and general trade, to avoid being identified as defrauding export tax refunds. In addition, the full set of transit trade documents (bill of lading, transit certificate, contract) shall be kept for at least 5 years for subsequent audit and inspection by the tax authority.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The drafting of transit trade documents shall match the logic of supply chain planning. First, the transit inventory cycle shall be clearly marked on the warehousing receipt, to ensure consistency with the overall inventory linkage strategy of the enterprise, and avoid inventory backlog caused by too long transit cycle.
The drafting of cargo value shall be combined with the tariff policy of the transit country, and the transaction price of the transit link shall be filled in reasonably, to avoid high tariffs imposed by the transit country due to excessively high cargo value, which will increase supply chain costs. In addition, standardized templates for transit trade documents shall be established, clarifying the fixed formats of the first-leg bill of lading, second-leg bill of lading and transit certificate, to ensure unified key information of all documents, improve the connection efficiency of each node of the supply chain, and avoid increased communication costs caused by inconsistent document formats.