Shanghai Transshipment Trade 2026: Is It Permitted?

Question

I am an operations manager of a foreign trade company. Recently, we have a batch of Indonesian palm oil that needs to be transshipped to Iran via Shanghai, involving third-country transshipment and certificate of origin. We heard that the customs in 2026 will strictly review certificates of origin for goods without substantial processing.

The finance department is also concerned about VAT deferral and foreign exchange settlement issues. We would like to know if transshipment trade is feasible in Shanghai now and what key points we should pay attention to during operations.

Daniel · Accepted Answer

Shanghai fully supports transshipment trade in 2026，but it requires a closed loop through "full-link compliance + precise policy matching". Taking the palm oil transshipment from Indonesia→Shanghai→Iran as an example，the following core aspects need to be focused on:

1. Pre-documentation Review: Verification of Certificate of Origin Authenticity is Key. Shanghai Customs has implemented the "Transshipment Trade Whitelist System" in 2026. For third countries (e.g。Indonesia)，a three-part document including "Certificate of Origin + logistics trajectory of transshipment port + import permit of the final destination country" is required. The "substantial processing" clause must be satisfied: the goods must not be unpacked，mixed，or processed in the transshipment port. For example，if the goods are temporarily stored in Yangshan Port Bonded Warehouse，a "Bonded Warehouse Goods Transshipment Certificate" must be submitted. The customs system will automatically verify whether the logistics data matches the declared information to avoid suspicion of "empty transshipment".

2. Core Node Coordination: Dynamic Balance of Ownership and Declaration. After the goods arrive at the port，"two-document matching" must be completed: the bill of lading (with "transshipment" marked and blank endorsement) and the "Transshipment Trade Contract Filing Form" to ensure ownership remains with our company during transshipment. During customs declaration，the "declaration first，inspection later" model should be adopted，and a "Goods Transit Risk Isolation Agreement" should be proactively submitted to the customs，clarifying that the goods will not enter the domestic market during transshipment period，otherwise，it will trigger "domestic sale taxation".

3. Emergency Response: Loss Prevention for Port Detention and Goods Seizure. If the Iranian importer suddenly cancels the order，immediately activate the "Bonded Zone Emergency Resale" process and utilize Shanghai Free Trade Zone's 24-hour fast release channel for "urgent transshipment". Complete new buyer qualification review within 72 hours (requires foreign exchange certificate from the Central Bank of Iran). If customs questions the certificate of origin，submit production records and transportation documents of Indonesian factories through the "Cross-Border Blockchain Tracing System" for "second-level verification".

4. Compliance Implementation Long-Term Closed Loop from Operations to Risk Control. It is recommended to simultaneously apply for "Shanghai Cross-Border Trade RMB Settlement Pilot" qualification and complete foreign exchange payment via CIPS system to avoid "blacklist" risk caused by SWIFT message delays. For tax purposes，utilize the "special VAT treatment for transshipment trade" policy: apply for VAT deferral at the import stage and declare tax refund uniformly after goods are shipped out. This can save approximately 12% capital occupancy cost per transaction.

Alexander · Answer

Chief Customs Declaration Expert: Transshipment trade requires key verification of "HS code consistency of third-country certificates of origin". For example, Indonesian palm oil HS code is 15079000. If declared as 15111000 (refined palm oil) during transshipment, it will trigger price dispute. Submit "Transshipment Trade Price Declaration" 72 hours in advance with temperature monitoring records of Shanghai overseas warehouse to prove no processing occurred.

Robert · Answer

Senior Logistics Expert: Shanghai Port has launched "multimodal transport transshipment charter" service in 2026. The direct voyage from Yangshan Port to Bandar Abbas Port can reduce container detention fees to $0.8 per box per day. Bill of lading should be "order bill with blank endorsement" to ensure ownership transfer via telex release, avoiding disputes over straight bill of lading.

John · Answer

Senior Tax Advisor: Shanghai Free Trade Zone provides "VAT deferral + consumption tax reduction" package policy for transshipment trade companies. Apply for VAT deferral during import with "Transshipment Trade Filing Receipt", declare tax refund after goods are shipped out. Note: "Offshore transfer transactions" must be separately accounted for to avoid confusion with domestic sales.

William · Answer

Trade Compliance Expert: Foreign exchange settlement requires "CIPS message verification". When receiving payment, note "Transshipment Trade - Indonesia - Iran" to avoid "account freeze" due to SWIFT code errors. If third-party payment is involved, verify if the other party is on Shanghai Foreign Exchange Bureau's "whitelist" to avoid 5-day verification period.

David · Answer

Foreign Trade Legal Expert: The contract must clearly define "transshipment liability division", e.g., agree on "who bears detention loss due to customs policy changes". Use "demand guarantee" instead of traditional letter of credit to quickly obtain bank compensation in case of origin certificate disputes, avoiding long-term goods detention due to legal disputes.

Olivia · Answer

On-Site Inspection Expert: Self-inspect for "substantial processing traces" before inspection, e.g., whether palm oil packaging labels have "Shanghai Refining Processing" wording. If customs requires inspection, pre-book "non-intrusive inspection" to avoid damage disputes from unpacking.

Sarah · Answer

Special Packaging Engineer: Iran has strict packaging requirements. Use "UN3264 hazardous goods packaging" (if additives are included) with MSDS document. Complete packaging reinforcement in Yangshan Port Bonded Zone to avoid long-term transportation damage, otherwise face $5,000 fine per batch.