Can the balance of payments determine a trade as entrepot trade?
Solved#Entrepot trade#
I am handling matters related to the company's trade business and am not quite sure whether the balance of payments can determine whether it is entrepot trade. For example, we purchase goods from Country A and instead of transporting them directly to our country, they are transshipped through the port of Country B, and the ownership of the goods is also transferred during the transshipment. At the same time, the balance of payments seems to be somewhat different from that of ordinary trade. In this situation, can it be considered as entrepot trade solely from the aspect of the balance of payments? I want to know what role the balance of payments plays in determining entrepot trade.
Professional consultant answers
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
It is very difficult to directly determine a trade as entrepot trade solely from the balance of payments. Entrepot trade refers to the business of importing and exporting goods in international trade, which is not directly carried out between the producing country and the consuming country, but through the hands of a third country.
The balance of payments can be used as an auxiliary judgment basis, but it is not decisive. For example, in entrepot trade, there may be two payments, one is the receipt of funds from the final buyer, and the other is the payment to the supplier, but a similar balance of payments pattern may also exist in normal import and export trade.
When making a determination, it is also necessary to combine contract terms, such as clearly defining the transfer of ownership when the goods are transshipped in the third country; and transportation documents to prove the actual transportation route of the goods, etc., and a conclusion cannot be simply drawn solely based on the balance of payments.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
Entrepot trade cannot be judged simply by the balance of payments. For example, some trades may have a special settlement method, and the balance of payments may look like entrepot trade, but the actual goods transportation and ownership transfer do not conform to the characteristics of entrepot trade. It is still necessary to comprehensively consider aspects such as transportation and contracts.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
The balance of payments in entrepot trade may have characteristics, but it cannot be identified based on this. For example, there may be situations such as collection and payment on behalf of others that interfere with the judgment of the balance of payments, so the balance of payments can only be a reference, and the key is the situation of goods circulation and ownership change.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
No, the balance of payments can only reflect the flow of funds. Entrepot trade involves the transfer and ownership change of goods in the third country, which is the key point of determination, and the balance of payments cannot be used as the only or main determination basis.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
It is impossible to determine entrepot trade just by looking at the balance of payments. Entrepot trade mainly has a special path of goods transportation and ownership transfer, and the balance of payments may be diverse, and the boundary with normal trade is not clear. It is necessary to combine other evidence for judgment.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
No. The role of the balance of payments in determining entrepot trade is not significant. For example, some triangular trades have complex balance of payments, but they are not necessarily entrepot trades. It is necessary to combine the actual business process for judgment.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
Definitely, entrepot trade cannot be calculated solely based on the balance of payments. Entrepot trade emphasizes the intermediate handling of goods in the third country, and the balance of payments is just a financial manifestation. It is necessary to make a comprehensive determination in multiple aspects.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
No, the determination of entrepot trade should be multi-dimensional. The balance of payments is just one aspect and is not decisive. For example, goods transportation documents can more intuitively reflect whether it is entrepot trade.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
It is impossible to define entrepot trade solely from the balance of payments. The focus of entrepot trade is on the transshipment of goods and the transfer of ownership, and the balance of payments situation may be similar to other trade patterns.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
Entrepot trade cannot be determined based on the balance of payments. When making a determination, it is necessary to consider the actual direction of the goods, when and where the ownership is transferred, and the balance of payments is just one of the reference factors.