What are the main risks to guard against when conducting entrepot trade business in the Sichuan region
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I am a local cross-border trade merchant in Sichuan. Recently, I plan to undertake an entrepot trade order from ASEAN to Western Europe, using the Chengdu International Railway Port as the transit storage and distribution point.
I have already coordinated with the upstream shipper and downstream buyer, and only need to finalize the operational plan. I heard from a friend in the industry that last year, a merchant doing entrepot trade in the Southwest region had their goods detained by customs due to non-compliant operations and was fined heavily.
Now I am unsure if there are risks in doing entrepot trade in Sichuan, and which specific stages are prone to problems. My goods are about to be shipped, and I want to clarify the risk points in advance, know how to prevent them, and avoid detention or fines that would delay the order.
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
Conducting entrepot trade in Sichuan does not have inherent risks，but there are three common misconceptions in the industry that act as triggers for the vast majority of risk incidents. The first is the mistaken belief that since goods only transit through Sichuan and are not sold locally，there is no need to declare transit information to customs in advance. The second is borrowing a third-party company name to ship goods for convenience without isolating the title of goods independently. The third is the belief that entrepot trade does not require compliance filing for foreign exchange settlement，using personal accounts or non-compliant channels for settlement.
These misconceptions trigger a chain of negative reactions: Failure to declare transit information in advance will lead to a direct classification as false declaration once controlled and checked by customs，causing goods to be detained at the port. This generates demurrage and storage fees of several thousand yuan per day，affects the enterprise's customs credit rating，and implicates subsequent regular import and export business. Borrowing a third-party name to ship goods means if the other party is involved in debt disputes or investigated for violations，the goods will be directly frozen and sealed，and the title cannot be claimed. Non-compliant foreign exchange settlement will result in being placed on the verification list by the SAFE，and the settlement channel will be directly shut down.
There are two actionable physical risk isolation methods. The first is to complete transit trade compliance filing in advance，clarifying the goods' transit path，storage location，and duration of stay. The second is to open a separate ledger for entrepot trade title to isolate the risk transmission between one's own business and third parties.
Exclusive stop-loss tip: Once goods trigger a verification，immediately organize the full set of entrepot trade contracts，bill of lading endorsements，and title transfer proof materials. Do not modify declaration information on your own. Coordinate with professional agencies in advance for on-site communication，which can shorten the detention processing cycle by over 70% and reduce the probability of penalties by 80%. In 2026，the Sichuan international transit hub will have supporting facilitation policies for entrepot trade. As long as operations are compliant，risks are fully controllable.
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
Declaring entrepot trade at Sichuan ports carries risks in the price review stage. If the declared transit price of the goods deviates by more than 30% from the export price of the country of origin or the import price of the destination country, customs will initiate a price review procedure, suspecting tax evasion through under-reporting or profit transfer. Even if goods do not enter domestic consumption, fees generated for transshipment, storage, and distribution services during transit must be listed in the fee column of the customs declaration documents.
If the enterprise cannot provide the full set of entrepot trade contracts, bills of lading, warehouse receipts, and title transfer proofs, customs will directly reject the declaration and require deletion and re-declaration, delaying the transit efficiency. For transit business at the Sichuan Railway Port, the manifest information of transit goods must remain logically consistent with the railway waybill information. The transit port marking on the bill of lading must be clear and cannot vaguely use the word "transit" to avoid triggering price review and verification procedures.
WilliamYears of service：10Customer Rating：5.0
International Logistics AdvisorStart a Chat
Sichuan entrepot trade mostly relies on the Chengdu International Railway Port or airports for operations. The core risks in the logistics link concentrate on title control and demurrage charges. If transit goods need to stay in the transit warehouse for more than 14 days, an application must be made to the port in advance to extend the free storage period.
If not applied for in advance, the daily storage fee after expiration is twice that of ordinary import and export goods. If it involves bill of lading endorsement transfer, the endorsement must clearly mark the transferee information. Blank endorsements for arbitrary transfer are not allowed; otherwise, the port and carrier will refuse to release the goods during pickup, causing title disputes.
Changing the transit path or destination port requires applying to the logistics operator 7 working days in advance. Temporary changes will not only incur change fees but may also cause goods to be stranded at the port due to insufficient space, affecting transit efficiency. Storage of transit goods must be in a supervised warehouse with international transit qualifications, not in ordinary storage, otherwise customs transit procedures cannot be completed.
DavidYears of service：3Customer Rating：5.0
Business Development AdvisorStart a Chat
Tax risks in Sichuan entrepot trade mainly concentrate on VAT handling and related transaction pricing. If entrepot trade involves domestic third-party service providers providing transshipment or storage services, compliant VAT invoices must be requested.
If invoices cannot be obtained, the corresponding costs cannot be deducted before tax, increasing the corporate income tax burden. If the entrepot trade is a transaction between related enterprises, the pricing must comply with the arm's length principle and cannot deviate too much from market prices; otherwise, tax authorities will include it in the key BEPS verification scope, classify it as a base erosion behavior, and require back payment of tax plus late fees.
For transit goods entering via the Sichuan Railway Port, VAT deferral can be applied for, eliminating the need to prepay VAT during the transit stage and reducing capital occupation costs. However, compliance conditions must be met and filings made in advance; otherwise, the policy benefits cannot be enjoyed, and tax verification will be triggered.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
Compliance risks in the foreign exchange settlement stage of Sichuan entrepot trade are the most easily overlooked. If the time interval between collection and payment in entrepot trade exceeds 90 days, trade credit filing with the SAFE must be made in advance; otherwise, it will be judged as abnormal foreign exchange, affecting subsequent settlement and sales business.
In 2026, the CIPS cross-border RMB payment system supports RMB settlement for entrepot trade. If using RMB settlement, it is necessary to ensure that the counterparty information for collection and payment matches the buyer and seller information in the trade contract. Funds cannot be circulated through third-party accounts, otherwise, it will be judged as non-compliant settlement.
Foreign exchange settlement for entrepot trade requires retaining the full set of contracts, bills of lading, invoices, and warehouse receipts. Banks will verify the documents. If the documents are incomplete, the bank will refuse to handle the settlement or payment procedures, causing funds to fail to circulate normally.
JohnYears of service：6Customer Rating：5.0
Export Tax Rebate AdvisorStart a Chat
Legal risks in Sichuan entrepot trade mainly concentrate on title transfer and contract terms. When signing an entrepot trade contract, the division of liability for the damage or loss of goods during transit must be clearly agreed upon. If not clearly agreed, once goods are damaged during transit storage, the buyer, seller, and transit party will shirk responsibility, making it impossible to define liability.
If settling by Letter of Credit, it is necessary to check whether the L/C contains soft clauses, such as requiring a transit certificate issued by the customs of the destination country which cannot be obtained, leading to inability to negotiate payment. Title transfer must be completed through formal bill of lading endorsement and cannot rely solely on agreement; otherwise, in case of disputes, the court cannot determine title ownership, and the enterprise's rights cannot be guaranteed. It is recommended to clearly agree on the scope of force majeure clauses in the contract, covering special circumstances such as logistics delays and customs verification, to avoid breach of contract risks.
CharlotteYears of service：4Customer Rating：5.0
Currency Exchange AdvisorStart a Chat
The probability of on-site inspection for Sichuan entrepot trade goods is slightly higher than for ordinary import and export goods. The core risks mainly lie in seals and the consistency of goods declaration. The original seal of transit goods must remain intact. If the seal is damaged during transportation, it is necessary to declare to customs for seal replacement in time. Private replacement of seals is not allowed; otherwise, it will be identified as unauthorized destruction of customs seals, facing penalties.
During container stuffing inspection, the full set of cargo lists must be prepared in advance to ensure the goods' name, quantity, and specifications are consistent with the declared information. If inconsistent, the inspection time will be directly extended, or it may even be identified as a false declaration. If transit goods involve dangerous goods, the dangerous goods classification must be clearly marked in advance, and the corresponding MSDS report provided. Otherwise, the inspection and appraisal process will be extended, delaying transit efficiency. If the appraisal result does not match the declaration, the goods will be directly detained.