Laws of the People's Republic of China

The State Administration of Foreign Exchange

Circular on Distributing the Measures for the Administration of Verification and Writing-Off of Export Proceeds in Foreign Exchange

HuiFa [2003] No.91

August 19, 2003

The branches and foreign exchange departments of the State Administration of Foreign Exchange (the SAFE) of the provinces, autonomous regions, and municipalities directly under the Central Government, the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and the designated foreign exchange banks:

In order to further improve the administration of verification and writing-off of export proceeds in foreign exchange, to enhance the efficiency of regulation and service, and to promote the development of China's foreign trade, the SAFE has formulated the new Measures for the Administration of Verification and Writing-Off of Export Proceeds in Foreign Exchange (hereinafter referred to as the Measures, see the attachments), and has obtained the consent jointly signed by the Ministry of Commerce, the General Administration of Customs, and the State Administration of Taxation. The Measures are hereby distributed to you. Please carry them out accordingly.

In order to implement the Measures, the SAFE has designed and developed the "System of Verification and Report of Export Proceeds in Foreign Exchange" (hereinafter referred to as the System), which is to be promoted and operated all over the country on a phased basis. Considering that the time to start using the System by the localities is different, and in order to avoid confusion, any region that has already started using the System before the implementation of the Measures shall execute the provisions of the Measures; whereas any region that has not started to use the System shall still execute the former relevant provisions on the administration of verification and writing-off of export proceeds in foreign exchange. The branches and designated foreign exchange banks shall transmit this Circular to the agencies under their respective jurisdictions as soon as possible upon receipt of it. Please pass on any problems arising during the execution to the Department of Current Accounts under the SAFE.

Attachment:

1. Measures for the Administration of Verification and Writing-Off of Export Proceeds in Foreign Exchange

2. Catalogue of the Documents Repealed

Attachment 1Measures for the Administration of Verification and Writing-Off of Export Proceeds in Foreign Exchange

Article 1

In order to further improve the administration of export proceeds in foreign exchange, and to promote the development of China's foreign trade, the Measures are enacted in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration.

Article 2

Definitions of the following terms used in the Measures:

"Exporters" refers to all the entities that have been approved or registered by the commerce authorities or the organs authorized thereby and that have the power of foreign trade management.

"Banks" refers to the banks and the branches thereof that have been approved or put on record by the financial supervisory and management bodies of the state and the organs authorized thereby, and banks include Chinese-funded banks and foreign-funded banks.

"Forms for the verification and writing-off of export proceeds in foreign exchange" (hereinafter referred to as verification forms) refers to the important vouchers with unified numbers that are uniformly managed by the SAFE and issued by the branches thereof, and by which the exporters make declaration of exports with the customs offices, collect export proceeds in foreign exchange with the banks, make verification and writing-off of export proceeds in foreign exchange (hereinafter referred to as verification) with the foreign exchange authorities, and apply for export tax refund with the tax authorities.

"Certification Page of the Customs Declaration Form for Export Proceeds in Foreign Exchange" (hereinafter referred to as declaration form) refers to the declaration form that is issued by the customs office to the exporter, after the clearance of the export goods, to prove that the actual export of the goods, and on the basis of which the verification formalities are processed.

"Special Page of Verification and Writing-off of Export Proceeds in Foreign Exchange" (hereinafter referred to as special page) refers to the special exchange settlement receipt for verification, or the special collection advice for verification that is issued by the bank to the exporter and on the basis of which the verification formalities are processed.

"Future reference of verification" refers to the administrative system of verification in which the data of receivable proceeds in foreign exchange that an exporter can not normally verified and written off due to objective reasons is transferred from the routine regulatory database to the future reference database specially established, and is no longer included in the routine examination, the exporter shall still be obliged to handle the verification, and the SAFE and the branches thereof shall continue to regulate and investigate the exporter.

Article 3

the SAFE and the branches thereof (hereinafter referred to as foreign exchange administrations) are the administrative organs of verification, shall supervise and administer the acts related to the collection of export proceeds in foreign exchange by the exporters and banks, and shall process the verification formalities for the exporters through the System and the "System of China Electronic Port for Collection of Export Proceeds in Foreign Exchange".

Article 4

The foreign exchange administrations shall, in conjunction with the commerce authorities, make assessments of the verifications by the exporters on an annual basis, grade the exporters and promulgate the grades.

Article 5

The verification shall be administered on a regional basis, an exporter shall make registration, apply for the verification form, and go through the verification formalities with the foreign exchange administration of the place where it is registered.

Article 6

Where an exporter exports goods to any regions subject to closed customs control, such as overseas or domestic bonded areas, export processing areas, diamond exchanges, etc. (hereinafter referred to as special domestic economic areas), or exports goods by way of deep processing transit, etc., wherever it is needed to export by any method subject to the regulation of verification form, the exporter shall go through the formalities for customs declaration on the strength of the verification form, and shall go through the verification formalities. Where the goods are exported by any methods not subject to the regulation of verification form, the exporter need not make the customs declaration on the strength of the verification form, neither need it go through the verification formalities.

Article 7

Foreign exchange administrations shall apply classified administration to the verifications by the exporters according to the assessment results of the verifications and other relevant information.

Article 8

An exporter shall, after obtaining the power of export management, go through the formalities for certification of access to "China Electronic Port", and shall make registration for record with the foreign exchange administration, which shall establish the verification archive for the exporter.

Article 9

In the case of any alteration of the recorded information, an exporter shall make the alteration registration with the foreign exchange administration in good time, and the foreign exchange administration shall alter the IC card authority of that exporter at "China Electronic Port". Where the exporter terminates its operations or is disqualified from foreign trade, it shall write off the registration with the foreign exchange administration, which shall write off the IC card authority of that exporter at "China Electronic Port".

Article 10

An exporter shall apply for the verification forms with the foreign exchange administration on the strength of the IC card of enterprise operator of "China Electronic Port" and other prescribed certificates. The foreign exchange administration shall, after issuing the verification form to the exporter, transmit the electronic ledger data of the verification form to the data center of "China Electronic Port".

Article 11

The verification forms may only be used by the exporter that applied for it, and may not be altered, lent, used in other's name, transferred, or traded.

Article 12

Where an exporter terminates operations, is disqualified from foreign trade, or is merged or split, it shall handle the verification pursuant to the following provisions:

1)

Where the exporter no longer operates export business because of termination of operations or disqualification from foreign trade, it shall return the unused verification forms to the foreign exchange administration to write off them, and with respect to the verification forms by which the goods are declared and exported, the exporter shall continue to handle the verification formalities pursuant to the provisions. The foreign exchange administration shall stop issuing forms to that exporter, and shall "prohibit the use" of the forms that have already been issued to that exporter and remain unused.

2)

Where the exporter no longer operates export business as a result of merger or split, it shall return the unused verification forms to the foreign exchange administration to write off them. The foreign exchange administration shall "prohibit the use" of the forms that have already been issued to that exporter and remain unused.

3)

Where the exporter continues to operate export business as a result of merger or split, it shall assume the former exporter's business for which the export proceeds in foreign exchange are verified and written off according to the stipulations of the agreement of merger or split.

Article 13

The foreign exchange administration may adjust the number of the forms issued according to the assessed grades of verifications and the daily business operations of the exporters. With respect to the exporters that have committed acts seriously violating the provisions on foreign exchange control, the foreign exchange administration may restrict the number of forms issued to them, or may "prohibit the use" of the verification forms that have been issued to them but are unused.

Article 14

The foreign exchange administration shall employ automatic verification, group verification, and one-by-one verification respectively to the exporters on the basis of the assessments of the verifications by the exporters, the assessments by the customs, tax, and commerce authorities, and the reports of international balance, etc., as well as different trade methods.

The conditions for exporters that are subject to automatic verification shall be provided by the SAFE, the catalogue shall be determined by the SAFE, and be promulgated by the branches.

Article 15

An exporter shall, before making declaration with the customs office, put on record the verification form through the "System of China Electric Port for Collection of Export Proceeds in Foreign Exchange" with the customs office where the declaration is to be made.

Article 16

An exporter shall, in making the customs declaration, faithfully report to the customs office the transaction method, report the transaction price, quantity, freight, insurance premium, as well as the agreement number of the processing trade contract, etc., according to the transaction method, and thus to guarantee the authentication and completeness of the data declared.

Article 17

The customs office shall process the clearance formalities for the exporter if no mistake has been found upon examination of the verification form and other declaration materials submitted by the exporter, and after verifying the electronic ledgers of the verification form. The customs office shall affix the "examination seal" on the verification form, make the remark of "used" to the electronic ledger data of the verification form, and upon application by the exporter, issue the declaration form with the number of the verification form to the exporter after the clearance. The number of the verification form and that of the declaration form shall be identical with each other. The customs office shall, after issuing the declaration form to the exporter, transmit to the data center of "China Electronic Port" the remarks made on the verification form and the electronic ledger of the declaration form.

Article 18

With respect to the export proceeds collected by an exporter from overseas, special economic areas, or off-shore accounts of overseas clients opened with the banks operating off-shore bank business within China, and the export proceeds collected by a transferor from the transferee under deep processing transit, etc., the bank shall, pursuant to the provisions, make foreign exchange settlement or pay into account the export proceeds in foreign exchange for the exporter, and issue the special verification page to the exporter.

Article 19

An exporter shall, after exporting the goods and within 30 days no later than the anticipated date of proceeds collection, make the report of verification with the foreign exchange administration by taking with it the verification form, the declaration form, the special verification page, and other prescribed verification vouchers.

With respect to the future collection of proceeds in foreign exchange of which the anticipated date of collection is 180 days (including 180 days) or more after the declaration date, the exporter shall put on record the future collection with the foreign exchange administration within 60 days after making the customs declaration.

Article 20

The foreign exchange administrations shall upload the verified electronic data of the previous month to the data center of "China Electronic Port" for consulting or use by the relevant authorities of commerce, customs, and tax, etc.

Article 21

Under exports by agent, the agent shall process the formalities, such as applying for the verification form, making the export declaration, handling the verification, and making the report of verification.

Article 22

The foreign exchange administration shall, after accepting the report of verification from an exporter, examine the authentication of the verification vouchers or data provided by the exporter. Where the data reported by the exporter is incomplete, that exporter shall be required to make supplementation. Where the data reported by the exporter is inconsistent with the electronic data transmitted by the customs office or bank, the exporter shall be required to check, modify and make up the data with the relevant departments. The customs office and bank shall deal with an application within 5 workdays after receiving it from an exporter.

Article 23

In examining the verification vouchers provided by an exporter, the foreign exchange administration shall, if the vouchers are complete, the data is correct, and the balance between the export and the proceeds in foreign exchange collected or the import has not exceeded the prescribed standards, make the verification according to different trade methods. Where the balance between the export and the proceeds collected or the import exceeds the prescribed standards, the foreign exchange administration shall, after making sure that the prescribed certifications of balance are correct, handle balance verification for the exporter. Where the balance between the export and the collected proceeds or the import exceeds the prescribed standards, and no prescribed balance certifications are provided, if the case meets the relevant provisions, future reference of balance shall be granted; if the case fails to meet the conditions for future reference and exceeds the prescribed time limit for verification, such a case shall be treated as one not verified and written off within the prescribed time limit.

Article 24

After handling the verification formalities for an exporter, the foreign exchange administration shall return the special tax refund page of the verification form to the exporter pursuant to the provisions. Exporters subject to autonomic verification shall be governed separately by other provisions.

Article 25

Where an exporter is unable to make normal verifications due to objective reasons, the foreign exchange administration may grant future reference of verifications with respect to the data of receivable export proceeds that should be verified and written off.

Article 26

Where an exporter incurs any refund or compensation in foreign exchange under exports, it shall apply to the foreign exchange administration by taking with it the certifications, and after its export proceeds actually collected are set off if no mistake is found upon examination by the foreign exchange administration, it shall go through the formalities for purchase and payment of foreign exchange for the refund or compensation with the bank on the strength of the "Certification of Setoff Export Proceeds/Verification" issued by the foreign exchange administration.

Article 27

Where an exporter fails to handle the verification formalities within the prescribed time limit, it shall be brought into the administration of those failing to make verification within the prescribed time limit, and the foreign exchange administration shall regularly urge that exporter to make the verification hat has been defaulted. The foreign exchange administration shall punish the exporter that fails to handle the verification formalities after being urged and without justified reasons.

Article 28

Exporters and banks shall handle the verification formalities in strict accordance with the Measures, and those violating the Measures shall be punished by the foreign exchange administrations in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration and other relevant provisions.

Article 29

The power to interpret the Measures shall remain with the SAFE.

Article 30

The Measures shall take effect as of October 1, 2003. The relevant regulations listed in Attachment 2 shall be repealed at the same time, and if any previous provisions conflict with the Measures, the latter shall prevail.

Attachment 2Catalogue of the Documents Repealed

1.

Measures for the Administration of Verification and Writing-Off of Export Proceeds in Foreign Exchange promulgated by the SAFE and other departments in December 1990

2.

Circular on Sorting out Old Verification Forms of Export Proceeds in Foreign Exchange (96) (HuiGuoHanZi No.055) promulgated by the SAFE on March 5, 1996

3.

Circular on Strict Examination of the Anti-Counterfeiting Labels of Declaration Forms of Import and Export Goods (HuiChuan [1996] No.04) promulgated by the SAFE on March 28, 1996

4.

Circular on the Relevant Issues Concerning Clarification of the "Twice Verification of Customs Declaration Forms of Import and Export Goods" (96) (HuiGuoHanZi No.178) promulgated by the SAFE and the General Administration of Customs on June 27, 1996

5.

Interim Measures on the Administration of the Payment and Verification and Writing-Off of Refund and Compensation in Foreign Exchange under Exports promulgated by the SAFE on June 28, 1996

6.

Circular on Further Strengthening the Administration of Verification Forms of Export Proceeds in Foreign Exchange (97) (HuiGuoHeZi No.001) promulgated by the SAFE on January 8, 1997

7.

Provisions on the Relevant Issues Concerning the Issuing of Special Page of Verification Form of Export Proceeds in Foreign Exchange promulgated by the SAFE on September 29, 1997

8.

Supplementary Provisions on the Issues Concerning the Verification and Writing-Off of Export Proceeds in Foreign Exchange promulgated by the SAFE on September 29, 1997

9.

Circular on the Relevant Issues Concerning the "Twice Verification" of Import and Export Declaration Forms (97) (HuiGuoHanZi No.214) promulgated by the SAFE and the General Administration of Customs on July 28, 1997

10.

Circular on Fixing the Minimum Time for Keeping of the Original Vouchers of Verification and Writing-Off of Export Proceeds in Foreign Exchange (98) (HuiGuoHanZi No.046) promulgated by the SAFE on February 18, 1998

11.

Circular on Further Strengthening the Administration of Verification and Writing-Off of Export Proceeds in Foreign Exchange (1998) (HuiFa No.27) promulgated by the SAFE on September 21, 1998

12.

Circular on Strengthening the Control of Verification and Writing-Off of Export Proceeds in Foreign Exchange Derived from Tourism Purchases (2000) (HuiFa No.170) promulgated by the SAFE on December 29, 2000

13.

Circular on Distributing the Implementation Rules of the Measures for the Administration of Verification and Writing-Off of Export Proceeds in Foreign Exchange (98) (HuiGuoFaZi No.012) promulgated by the SAFE on June 22, 1998

14.

Circular of the State Administration of Foreign Exchange on Distributing the Operational Rules for the Administration of Verification and Writing-Off of Export Proceeds in Foreign Exchange (2002) (HuiFa No.112) promulgated by the SAFE on November 13, 2002.