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What is Intermediary Trade

Under normal trade, the parties signing the contract directly complete the handover of the goods, and the domestic company imports and re-exports the goods.

Under the intermediary trade is no longer directly carried out between China and the destination consumer countries. Instead, it is traded by third-party countries with equally developed productivity, and the trade subject is legally avoided. The goods do not go directly to the destination port, but around the transit port, complete the change of the cabinet at the transit port, the certificate of origin of the supporting transit country and the export documents to provide customs clearance documents for the destination customers.

Although the United States has increased tariffs on Chinese products, it has not increased tariffs on certain countries. Therefore, through the intermediary trade, the goods are transported to this third country for transfer, which increases some transit costs, but avoids high anti-dumping duties.

Need to let the consignee know, dont tell the customer directly re-export. On the packaging, because it is to be re-exported, the package is made of neutral packaging, or the third domestically produced land, there must be no “Made in China” logo, or it can be identified as a Chinese product.

The T/T method notifies the customer to pay the agent company, and the agency company deducts the handling fee and calls it to the domestic and domestic production. The balance of the customer is sent to the agency company. The agency deducts the handling fee and transfers it to the domestic company. The domestic company sends the receipt to the agency or gives it to the electric.

For some L/C operations, since the customs clearance documents for the customers are third-party countries, and the letter of credit is for the receipt of foreign exchange, the letter of credit must indicate that the third-party documents are acceptable.

What is intermediary trade

Risk of intermediary trade

1. Risk of cargo rights

Since it is an agent, and it is necessary for a third party to transfer in a third-party country, it is also possible to directly confiscate the goods if the agent company is low in credit. In the third-party country to the destination customer, this is a re-export trade agent, this operation is in the hands of third-party agents, and may also encounter the possibility of customers colluding agents to release goods.

2. Capital risk

In the hands of a third-party transit agency, will the funds be misappropriated? Even if the contract is signed, the entrepot trading company will not take the money to run.

3. Clearance risk

There are a lot of intermediary trade agents who will have false third-party transit national certificate certificates. If they are found at the port of destination, they will be discovered, resulting in difficulties in customs clearance and high fines.

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