Georgia Entrepot Trade: A Legal Shortcut to Bypass Sanctions

When the global supply chain is frequently reconfigured due to fluctuations in the international situation, a small country located in the Caucasus Mountains is quietly becoming a secret weapon for multinational companies. This is not Dubai, nor Singapore, but Georgia, a country with a 3,000-year history of wine. As a natural hub connecting Europe and Asia, its entrepot trade volume has surged by 217% in the past five years. Mr. Zhang's textile company successfully transported goods to the EU market through the Tbilisi Free Industrial Zone by bypassing the traditional route.

Georgia, a country that can only be found with a magnifying glass on the map, what makes it attract the attention of global traders? First of all, the tariff advantage is a dimensionality-reduction blow: It has signed free trade agreements with the EU, China, and CIS countries. After Ms. Li's electronic components were transferred through Georgia, the comprehensive tariff cost was reduced by 34%.

• Geographical Hub Value: The Poti Port on the Black Sea + the Baku-Tbilisi-Kars Railway forms a fast track to Europe that takes only 12 days
• Free Economic Zone Policy: Exempt from value-added tax and profit tax, and 100% foreign capital is allowed to hold shares
• Logistics Cost Depression: Warehouse costs are only 1/5 of those in Rotterdam, the Netherlands

Last year, when Mr. Wang transferred 200 containers of building materials through Georgia, he encountered customs clearance delays due to the document not indicating "not of Iranian origin". The local customs has extremely strict requirements for document compliance, and special attention needs to be paid to:

• The certificate of origin must be certified by the chamber of commerce
• The transshipment bill of lading needs to clearly show "the state of the goods has not changed"
• Goods in the free industrial zone need to apply for EUR.1 certificates separately

The blockchain customs clearance system launched by the Tbilisi Customs has compressed the average customs clearance time from 72 hours to 4 hours. The trade big data platform developed by Zhongshitong shows that the categories of Chinese goods transferred through Georgia are extending from traditional textiles to high-tech products such as photovoltaic modules and new energy vehicles.

When the fragmentation of the global trade map has become the new normal, perhaps it is time to re-examine that forgotten crossroads in the Caucasus. Georgia's entrepot trade is like a set of precise Lego blocks. Whether it can spell out a better supply chain map depends on when you pick up the first piece. Welcome to share your entrepot trade experience in the comment section, or send a private message to obtain the latest free trade agreement tariff manual.