What is Cross Trade, How to Do it

Cross trade refers to the sale of goods purchased from a company or bonded warehouse located abroad or in a free zone, in transit through the country of cross trade, or directly to a company or bonded warehouse located abroad or in the free zone.

Cross trade can be briefly defined as the sale of goods from one country to another country without being nationalized or entering the customs territory of the country.

Cross trade is a form of trade, not a payment method. In this form of trade, which technically does not comply with the definition of a real import and export, the most important point that differs from other logistics transactions is that the customs declaration is not issued.

In cross trade, the place where the sold goods are shipped does not matter until they reach the buyer, it is sufficient to arrange the shipping documents according to the legislation of the countries where the goods enter and leave.

Goods whose trade and sale are prohibited according to international agreements cannot be cross traded, and even if not internationally, cross trade of products whose sale is prohibited according to the laws of certain countries is prohibited to those countries.

In cross trade, the bill of lading issued to the supplier at the port of loading will have the cross trading company mentioned as the consignee and not the actual buyer. Then the seller sends the complete set of documents including bill of lading, commercial invoice, packing list, Certificate of Origin, and any other related documents to cross trading company via bank or as per pre-agreed arrangement. Cross trading company, on receipt of this Bill of Lading, surrenders it with the carrier who then issues a new Bill of Lading in which they will be the shipper and the buyer will be the consignee. This process is called switching the B/L. Cross trading company will have to arrange for the commercial invoice and packing list for the buyer. Certificate of Origin and other documents required at the destination are arranged in consultation with the Freight Forwarder.


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