How is arbitrage in entrepot trade specifically operated?

Previously, some people carried out arbitrage by fabricating entrepot trade contracts and creating false goods circulation records. For example, fabricating the resale of a batch of goods between different countries. In fact, the goods do not exist or are not actually transferred. But through forging bills of lading and other documents, funds are transferred between different exchange rate markets to obtain price differences. However, now the supervision is very strict, and it is difficult to operate.

Some enterprises try to conduct arbitrage by taking advantage of the time difference between the receipt and payment of foreign exchange in entrepot trade. For example, if they expect exchange rate fluctuations, they receive foreign exchange in advance and then make payments when the exchange rate changes are favorable to earn exchange rate differences. But banks monitor the time of receipt and payment of foreign exchange in entrepot trade. This practice is very risky and easy to be detected.

There was once an enterprise that deliberately over - reported the import price and under - reported the export price in entrepot trade. Importing low - priced goods into the domestic entrepot company at a high price and then exporting them at a low price, and converting the price difference part through the exchange rate to make profits. However, such false declarations are easily seen through by the customs and the foreign exchange administration.

Arbitrage in entrepot trade using the bonded area has also occurred. Storing goods in the bonded area and repeatedly conducting entrepot trade operations. It seems that the goods are in circulation, but in fact, funds are converted between different exchange rate regions through this to seek arbitrage benefits. Now the customs strictly supervises the bonded area, and such behaviors are hard to hide.

There is also a way of colluding with overseas companies. The two sides agree to cooperate in the entrepot trade operation. The overseas company exchanges funds at a specific exchange rate locally as required, and the domestic company cooperates to complete the capital flow to jointly obtain exchange rate price differences. This way of internal - external collusion is extremely risky, and once detected, the consequences are serious.

Arbitrage through entrepot trade between affiliated enterprises. Domestic and overseas affiliated enterprises fabricate entrepot trade business, transfer funds back and forth between affiliated enterprises, and take advantage of exchange rate differences in different regions to obtain benefits. However, under the current big data monitoring, related transactions are easily under key attention.

Some people want to conduct arbitrage by obscuring the true value of goods in entrepot trade. For example, arbitrarily evaluating the value of goods and conducting fund exchanges in different foreign exchange markets according to the evaluated price, trying to earn exchange rate differences. However, the unreasonable price is likely to trigger an investigation by the regulatory authorities.

Once someone wanted to conduct arbitrage by extending the entrepot trade cycle, expecting exchange rate fluctuations and waiting for favorable exchange rate opportunities within a long trade cycle. But banks and regulatory authorities control the trade cycle, and this method is also difficult to achieve.