Review: A "Perfectly Compliant" Failed Transshipment

In October 2023, a Chinese manufacturer exported a batch of mattresses to the United States via Singapore. The enterprise strictly followedTransit tradeRules:

• Obtained theCertificate of OriginForm A from Singapore
• Provided photos of the production line of the Singaporean factory
• Submitted the payment and receipt vouchers of the Singaporean account
• Completed the CPSC (Consumer Product Safety Commission of the United States) test report

First Stage: Document Review
When the US Customs inspected the container for the first time, it required the following supplements:
① Original laboratory test data of the flame retardant components of the mattress sponge
② Full - journey transport bill of lading from Singapore to the United States (including the container - unpacking records at the transit warehouse)
③ Purchase contract between the Singaporean factory and the raw material supplier

Phase 2: Technical Pressure
After the customer submitted all the documents, the customs suddenly invoked Article 19 CFR 113.13 of the Customs Code and required:
Option A Pay anti - dumping bond (AD/CVD Bond), with the amount being 200% of the cargo value (estimated according to the US 301 tariff on Chinese mattresses + anti - dumping duty)
Option B Return the goods immediately

Final Result:

• Port detention fee + Warehouse rent: $5,200 (28 days)
• Expedited fee of inspection agency: $3,800
• Legal consultation fee: $2,500
• Total Loss: $11,500, and finally chose to return the goods

In-Depth Analysis: The Operational Logic Behind U.S. Customs' "Compliance Trap"

1. Abuse Mechanism of Legal Tools

According to the U.S. Customs Operational Manual CBP 19 CFR 141.113, when goods involve "third-country transit," Customs has the authority to:

• Trace the source of raw materials (even if the value - added of processing in the transit country exceeds 35%)
• Please provide proof of "substantial transformation" (simply repackaging mattresses does not meet the standard).
• Initiate a "reasonable doubt" investigation (no preliminary evidence required)

2. Weaponization of Time Cost

Port Detention Cost Calculation Model:

Number of days	Type of fee	Daily cost of 20 - foot container
1-5	Basic port storage fee	$85
6-10	Demurrage fee + Supervision fee	$220
11+	Punitive rate	$380

Data source: Los Angeles Ports charging standard in 2024

A detention exceeding 15 days will trigger the "presumption of cargo abandonment" procedure, potentially resulting in the importer permanently losing ownership of the goods.

3. Supply Chain Breakpoint Strike

In this case, the customs precisely selected the strike time point:

• 30 days before the Christmas sales season (peak demand period for mattresses)
• For FOB trade terms (ownership of goods has not been transferred, and the exporter bears the loss of returning the goods)

Three Fatal Misconceptions in Entrepot Trade

Misconception 1: "Complete documents = guaranteed customs clearance"

• Reality: U.S. Customs adopts the "rebuttable presumption" principle, which allows them to request evidence even if the documents are compliant.
• Case Evidence: From January to September 2023, the U.S. Customs' "secondary inspection rate" for transshipped goods from China reached 37%, with 82% ultimately found to violate rules of origin.

Misconception 2: "Processing trade = origin laundering"

• Technical Standards:
• The tariff number of the goods must be changed (the HS code of the mattress in this case has not changed)
• The processing cost needs to exceed 60% of the total value of the goods (Singapore only carried out labeling + repackaging, with a cost proportion of less than 15%)

Misconception 3: "Transit countries pose no tariff risks."

• Bond Killing Chain:
  AD/CVD Bond required by customs includes:
• Estimated anti - dumping duty rate (198% for the mattress in this case)
• Interest for three - year retroactive period (annualized 7%)
• Customs operation surcharge (1% of the cargo value)
  Calculation formula:
  Bond amount = (FOB price × 198%) × (1 + 7% × 3) + FOB price × 1%

Practical Suggestions for Risk Prevention and Control

Construction of Legal Firewall

• Add a "Liability Cap Clause" in the transit agreement, for example:
  "Carriers shall be liable for losses caused by the customs of the importing country determining the origin, with compensation not exceeding 200% of the freight."
• Purchase "Special Insurance for Entrepot Trade," covering:
• Customs fines (with a maximum coverage of $500,000)
• Goods depreciation loss (compensated at 80% of the market price)

Configuration of Emergency Response Plan

• Time Red Line:
  Establish a "15-day emergency response mechanism" to be triggered when detention exceeds:
• 5 days: Start the allocation of alternative supply sources
• 10 days: Legal relief procedure (submit a Protest to CBP)
• 15 days: Start the overseas destruction procedure (to avoid return tariffs)
• Cost control:
  Sign a "Tiered Storage Agreement" with the bonded warehouse at the transshipment port:

Week 1: $3/cubic meter/day
Week 2: $7/cubic meter/day
Week 3: $15/cubic meter/day (including destruction and disposal fees)

Conclusion: Seeking Living Space in the Gray Area

This case reveals a harsh reality: against the backdrop of escalating global trade protectionism, transshipment trade is evolving from a "risk-controllable business strategy" into a "high-intensity legal battlefield."

When the compliance cost exceeds the trade profit, perhaps its time to rethink: whether to continue dancing on the tightrope or build a real moat for the global supply chain.