Quick Answer
Transshipment itself is legal, but using it to “change origin” and evade tariffs is not. A common illegal pattern is taking goods from a high-tariff country, repackaging, relabeling or minimally processing them in a third location, then exporting them to the US as “Made in Taiwan”, known as origin washing. Since 7 May 2025, Taiwan’s Ministry of Economic Affairs requires exporters of Taiwan-made goods to the US to attach a declaration of origin for goods exported to the United States; violations can bring fines of NT$60,000 to NT$3,000,000, suspension of trading, and in serious cases revocation of the trader’s registration under the Foreign Trade Act. Commercial Times reported in September 2026 that Taiwan’s Trade Administration had completed penalties in 257 of 428 referred cases.
What Is Illegal Transshipment or Origin Washing?
According to a Central News Agency (CNA) report from April 2025, what Taiwan’s Ministry of Economic Affairs aims to stop is passing off products not made in Taiwan as Taiwanese through relabeling, repackaging or minimal processing, to avoid the higher US tariffs on other countries.
This is different from ordinary transshipment or triangular trade:
| Comparison | Legal transshipment / triangular trade | Illegal transshipment (origin washing) |
|---|---|---|
| Purpose | Shorter logistics, integrated supply, consolidation and distribution | Evading tariffs, anti-dumping duties or trade restrictions |
| Origin marking | Actual country of manufacture | Relabeled as the transshipment country or another country |
| Processing | Doesn’t change origin, or genuinely constitutes substantial transformation | Only repackaging, relabeling or simple processing |
| Documents | Certificate of origin matches reality | Documents don’t match the actual place of manufacture |
Taiwan’s Rules and Penalties
Declaration of origin for US exports (from 7 May 2025)
CNA reported on 25 April 2025 that from 7 May 2025, exporters of Taiwan-made goods to the US must attach a declaration of origin for goods exported to the United States, declaring that the origin is true.
Foreign Trade Act penalties
According to Taiwan’s Customs Administration, if export goods are not marked with origin as required or are falsely marked, the Trade Administration may, under Article 28 of the Foreign Trade Act:
- Issue a warning
- Impose a fine of NT$60,000 to NT$3,000,000
- Suspend exports, imports or both for one month to one year
- In serious cases, revoke the exporter/importer registration
Enforcement results
Commercial Times reported on 7 September 2026 that the Trade Administration had completed penalties in 257 of 428 referred false-origin cases. It uses import/export data analysis to identify high-risk traders, requires exporters to submit origin declarations and conducts investigations, referring criminal matters to the Investigation Bureau, and says it will keep working with other agencies to crack down on illegal transshipment.
How Does the US Determine Origin?
According to CNA, the US has no fixed value-added formula; US Customs decides case by case based on processing and value added, and businesses can request an advance ruling from US Customs and Border Protection (CBP) before shipping. The US also accepts allegations and investigates evasion of anti-dumping and countervailing duties under the Enforce and Protect Act (EAPA).
For the international principles of origin (substantial transformation, change of tariff classification, value-added percentage), see What Are Rules of Origin?
How to Do Multi-Country Trade Legally
- Mark origin truthfully: label the country where the goods were actually made.
- Claim a new origin only with genuine substantial transformation, confirmed under the importing country’s rules, with an advance ruling if needed.
- Keep documents consistent: certificate of origin, commercial invoice, packaging and actual place of manufacture must match.
- Use trade agreements legally: claim preferential tariffs only when goods meet the agreement’s rules of origin.
- Refuse origin washing requests: don’t accept any “just relabel it” or “just route it through” proposals.
Tang Sugar’s Position
Every deal structure in Tang Sugar’s triangular and multilateral trade service is designed to be legal, compliant and auditable, planning the best supply route within each country’s tariff agreements and rules of origin. We believe that truly professional multilateral trade doesn’t operate in gray areas; it keeps every step within the system. To evaluate a compliant supply route, contact us.
FAQ
Is transshipment illegal?
No, transshipment is a legal logistics method. What is illegal is using transshipment, repackaging or simple processing to change the origin marking and evade tariffs or trade restrictions.
What is origin washing?
Passing off products not made in a country (for example Taiwan) as that country’s products through relabeling, repackaging or minimal processing, in order to avoid higher tariffs.
What document must accompany Taiwan-made exports to the US?
Since 7 May 2025, exporters of Taiwan-made goods to the US must attach a declaration of origin for goods exported to the United States.
What are the penalties for false origin marking in Taiwan?
Under Article 28 of the Foreign Trade Act: a warning, a fine of NT$60,000 to NT$3,000,000, suspension of trading for one month to one year, and revocation of registration in serious cases; criminal matters are referred for investigation.
How does US Customs decide country of origin?
Case by case, based on processing and value added; there is no fixed formula. Businesses can request an advance ruling from CBP before shipping.
Further Reading
Sources
- Central News Agency (2025-04-25): Taiwan-made exports to the US require a declaration from 7 May (in Chinese)
- Commercial Times (2026-09-07): 257 false-origin cases for US exports penalized (in Chinese)
- Ministry of Finance, Taiwan: Export goods must be correctly marked with origin (in Chinese)
- U.S. Customs and Border Protection: Enforce and Protect Act (EAPA)
