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Why is no official customs declaration required for transit trade? What is the core compliance logic behind it?
or complex compliance issues.
clearance and fund security.
I am the head of a foreign trade enterprise in Shanghai focusing on Southeast Asian transit trade. Last month, we shipped a container of natural rubber transited from Malaysia to Brazil. The cooperating freight forwarder said no customs declaration was needed for the entire transit process, and I agreed without asking further details as I was rushing to meet the delivery schedule.
However, my finance staff came to me in a hurry these days, saying that the bank requires a customs declaration form for foreign exchange settlement, otherwise the foreign exchange receipt and payment cannot be completed. I panicked immediately. Also, I heard from a peer last week that a batch of transit goods was temporarily detained by customs at Hong Kong Port due to lack of customs declaration, resulting in tens of thousands of yuan in port demurrage charges.
The more I think about it, the more frightened I get: Why exactly can transit trade be exempted from customs declaration? Will there be risks of cargo detention and confiscation without customs declaration? How to solve the foreign exchange receipt and payment problem without a customs declaration form? Is the claim of "no customs declaration required for transit trade" from freight forwarders a common industry misunderstanding?
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
First of all，we need to clarify a common industry misunderstanding: Many freight forwarders claim that "no customs declaration is required for all transit trade"，which is a typical misleading statement. The premise for transit trade to be exempted from customs declaration is that the goods never enter the domestic customs territory throughout the entire process，that is，after departing from overseas，they only transit at domestic ports and change means of transport，without any landing storage，processing or sales activities.
If you mistakenly skip customs declaration for transit goods that have already entered the domestic customs territory，it will trigger a chain of negative reactions: First，the customs will judge the goods as "illegally entering the country"，directly detain the goods and launch an inspection，which will not only incur port demurrage and container detention fees，but also may face a fine of 5% to 30% of the cargo value，Second，in the bank's foreign exchange receipt and payment link，due to the lack of electronic ledger data of the customs declaration form，the transaction will be listed as "suspicious foreign exchange receipt and payment"，the foreign exchange settlement authority will be suspended，and even trigger a compliance inspection by the State Administration of Foreign Exchange.
Physical risk isolation measures: If the goods need to transit at domestic ports，you must apply for transit goods filing with the customs in advance，obtain the Transit Goods Filing Notice，use customs-supervised vehicles for connection throughout the process or enter the special transit supervision yard to ensure that the goods do not enter the domestic circulation link，At the same time，require the freight forwarder to provide the "no landing certificate" from the transit port，and keep the full video record of the means of transport replacement.
Exclusive loss mitigation tips: If there is already a situation of missing customs declaration，you need to submit supplementary transit goods declaration materials to the customs at the transit place within 72 hours after the goods depart，explain the authenticity of the transit trade，and strive for lenient treatment，For the problem of bank foreign exchange settlement，you can apply to the bank for a green channel for cross-border foreign exchange receipt and payment with the transit filing certificate，transit agreement and full set of transaction documents，without providing an official customs declaration form.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The core criterion for determining whether customs declaration is required for transit trade is whether the goods enter China's customs territory. If the goods only transit and change means of transport at domestic ports, without going through import customs clearance procedures and entering the domestic market circulation, no official customs declaration is required, but a transit goods filing application must be submitted to the customs to obtain the Transit Goods Filing Notice.
If the goods need to be stored on land for special reasons, you must go through "bonded storage customs declaration" and be included in the customs bonded supervision system. If you fail to file as required, the customs will judge it as illegal entry according to the Customs Law, impose a fine of 5% to 30% of the cargo value, and in serious cases, it will also affect the enterprise's customs credit rating, leading to a decline in subsequent customs clearance efficiency.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
The premise that transit trade is exempt from official customs declaration is that the entire logistics path is within the "transit channel" supervised by the customs. In operation, you need to confirm the transit qualification of the transit port in advance, and give priority to ports with "special international transit yards", such as the transit yard of Shanghai Yangshan Port. After the goods arrive at the port, they directly enter the supervision yard, without unpacking or landing, and only complete the replacement of means of transport.
If the transit port has no special supervision yard, you need to arrange customs-supervised vehicles for connection throughout the process to avoid the goods being out of supervision. At the same time, keep all logistics documents, including transit manifests, replacement records, ship dynamic tracks, etc., as evidence that the goods have not entered the domestic customs territory, to avoid subsequent compliance risks caused by vague logistics tracks.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The core tax logic for the exemption of customs declaration for transit trade is that the goods do not enter China's customs territory and are not within the scope of value-added tax and tariff collection in China, so there is no need to go through customs declaration procedures for tax declaration. However, if the goods have value-added activities such as processing and packaging during the transit process, no matter whether they land or not, you need to go through temporary customs declaration procedures and pay the corresponding value-added tax and tariff.
In addition, the income from transit trade belongs to cross-border taxable activities, which needs to be declared during the final settlement of enterprise income tax, and transit contracts, bills of lading, foreign exchange receipt and payment vouchers and other materials should be kept for future reference. If you fail to declare as required, it may trigger an anti-tax avoidance investigation by the tax authority, requiring you to pay back taxes and late fees.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
When there is no customs declaration record for transit trade, you need to focus on compliance in the foreign exchange receipt and payment link. The core basis for banks to verify cross-border foreign exchange receipt and payment is "transaction authenticity". If there is no customs declaration form, you need to provide supporting materials such as transit trade contracts, transit agreements, copies of bills of lading, and manifest information to prove the transit flow of the goods.
At the same time, ensure that the amount and currency of foreign exchange receipt and payment are consistent with the transit contract, to avoid the situation of "over-collection and over-payment" or "mismatch between income and expenditure". In addition, if the transit trade involves sensitive countries or regions, you need to file the transaction with the State Administration of Foreign Exchange in advance to avoid the foreign exchange receipt and payment being listed as suspicious transactions, resulting in account freezing or restriction.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
The agreement of "no customs declaration required" in transit trade should be clearly marked in the logistics service contract, and the supervision responsibility of the freight forwarder should also be agreed, that is, to ensure that the goods are within the scope of customs transit supervision throughout the process and do not enter the domestic customs territory.
If the goods are detained by customs because the freight forwarder fails to perform the filing obligation, it should be clearly stated in the contract that the freight forwarder shall bear all responsibilities such as port demurrage, fines and cargo losses. In addition, all legal documents related to transit trade, including contracts between buyers and sellers, transit agreements, bills of lading, filing notices, etc., should be kept as core evidence for subsequent dispute resolution, to avoid difficulties in rights protection due to incomplete documents.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
If transit trade goods are randomly inspected by customs at the transit port, you need to prepare documents such as transit contracts, transit agreements, transit filing notices in advance to cooperate with customs inspection. During the inspection, the focus is to prove that the goods have not been unpacked, and no processing or alteration has occurred. You can provide photos of container seals, records of seal numbers before and after replacement, ship dynamic tracks and other materials.
If the customs suspects that the goods have entered the domestic customs territory, you need to apply for "supervision yard verification" on the spot, and the yard will issue a certificate that the goods have not landed. If the relevant documents are not prepared in advance, it may lead to extended inspection time, incur port demurrage charges, and even be judged as illegal entry.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
Transit trade is exempt from customs declaration, so it cannot enjoy the export tax rebate policy. Enterprises need to clearly distinguish the accounting treatment of transit trade from that of general export trade. The income from transit trade shall be accounted for separately to avoid confusion with general export income, which may lead to the tax authority's misjudgment of export tax rebate fraud.
At the same time, all documents of transit trade, including contracts, bills of lading, foreign exchange receipt and payment vouchers, transit filing notices, etc., should be kept as original vouchers for accounting. If they are not kept or accounted for as required, it may trigger a tax letter adjustment, requiring enterprises to provide additional supporting materials, which will affect the enterprise's tax rebate credit rating.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
The core purpose of skipping the customs declaration link in transit trade is to shorten the logistics cycle and reduce customs clearance costs, but the compliance requirements of transit nodes need to be clarified in supply chain planning. Enterprises should give priority to transit ports with mature transit supervision systems, such as Hong Kong, Shanghai Yangshan Port, Singapore Port, etc. The transit procedures of these ports are more standardized and the supervision risk is lower.
At the same time, a real-time monitoring mechanism for logistics nodes should be established to track the dynamic track of goods and ensure that the goods do not deviate from the transit path. In addition, a certain compliance buffer time should be reserved to avoid skipping the filing process due to rushing to meet the delivery schedule, leading to subsequent compliance risks.