Triangular trade (Chain Transaction)
A commercial transaction involving three parties in three different countries, where the merchandise is shipped directly from the first to the third.
Triangular trade (Chain Transaction)
Triangular trade (or chain transaction) is a commercial transaction involving at least three parties located in different countries, where the goods are shipped directly from the original supplier to the end customer, without physically passing through the intermediary's country.
Typical diagram
A seller A (China) sells to an intermediary B (France) who resells to a final buyer C (Morocco). The merchandise is shipped directly from China to Morocco, but invoicing follows the A→B→C pattern.
Customs issues
Triangular trade raises complex questions of customs value (which invoice to retain for customs clearance?), preferential origin (can proofs of origin be issued in this scheme?) and reporting obligations (who is the exporter/importer?).
VAT issues
Intra-community triangular operations benefit from VAT simplification (article 141 of the VAT directive) making it possible to avoid VAT identification in the intermediary country.
Export control issues
The intermediary must verify that the goods are not subject to export controls, even if they never physically handle the goods.
Best practices
Carefully document the physical flow and the financial flow, secure the VAT treatment and check the implications in terms of export controls and sanctions.