Laws of the People's Republic of China

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Distributing the System of the Indirect Declaration and Verification of International Revenue and Expenditure Statistics (for Trial Implementation)

HuiFa [2003] No.1

January 3, 2003

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

With a view to promoting the orderliness and effectiveness of the indirect declaration and verification of international revenue and expenditure statistics, promoting the regularization and standardization of the verification work, the SAFE has formulated System for the Indirect declaration and Verification of International Revenue and Expenditure Statistics (for Trial Implementation), and hereby distributes them to you for implementation.

It is desired that you, after receiving the present Circular, will forward it to the sub-branches and the banks (including foreign-funded banks) within your respective jurisdictions in good time. In case any problem arises in the implementation of the present Circular, please contact the Department of International Revenue and Expenditure of the SAFE.

Tel: (010) 68402374; 68402146.

Attachment:System for the Indirect Declaration and Verification of International Revenue and Expenditure Statistics (for Trial Implementation)

Chapter I General Provisions

Article 1

The present System have been formulated on the basis of the Measures for the Declaration of International Revenue and Expenditure Statistics and the Rules for the Implementation thereof as well as the relevant provisions of the Operational Rules for the Statistical Declaration of International Revenue and Expenditure through Financial Institutions and by taking the practice of work into consideration for the purpose of ensuring the quality of the data of international revenues and expenditures indirectly reported.

Article 2

Statistical personnel of international revenue and expenditure shall take a true-to-the-fact, serious and responsible attitude in the work of verification of indirect declaration of international revenue and expenditure (hereinafter referred to as "verification") so as to ensure the timeliness, accuracy and comprehensiveness of the data reported. If they find any errors or omissions in their verification work, they shall demand the entity under verification to put right.

Article 3

Verifications are classified into the non-on-the-spot verification of indirect statistical declaration of international revenue and expenditure and on-the-spot verification of indirect statistical declaration of international revenue and expenditure.

Non-on-the-spot verification of indirect statistical declaration of international revenue and expenditure (hereinafter referred to as "non-on-the-spot verification") refers to that the administrative departments of statistical declaration of international revenue and expenditure do not have to go to the banks to consult the original documents of transaction, instead, they make verifications according to the connections and logical relationship between the relevant information reported by the banks.

On-the-spot verification of indirect statistical declaration of international revenue and expenditure (hereinafter referred to as "on-the-spot verification") refers to that the administrative departments of statistical declaration of international revenue and expenditure go to the site of the banks or reporters of statistics to consult the original documents of transaction and other relevant documents and verify the reported information.

Article 4

The principles for the verification of indirect statistical declaration of international revenue and expenditure are:

1.

The foreign exchange administrations on various levels shall verify the indirect statistical declaration of international revenue and expenditure submitted by the banks or other reporters within their jurisdictions;

2.

The foreign exchange administrations on various levels are responsible for making irregular sample tests over the business of indirect statistical declaration of international revenue and expenditure of the foreign exchange administrations on lower levels;

3.

The verification work shall be combined with the specific positions of the staff members.

Article 5

Foreign exchange administrations shall establish archivist files of verification, properly keep the relevant verification materials incurred from non-on-the-spot and on-the-spot verifications.

Chapter II Non-on-the-spot Verification

Article 6

Non-on-the-spot verifications mainly include the verification of the electronic data in the foreign exchange administration version of the monitoring system of international revenue and expenditure statistics (hereafter "foreign exchange administration version") and the check between the electronic data and the hardcopy declaration documents (hereafter "the sheet preserved by the foreign exchange administration").

Article 7

The verification of the electronic data in the monitoring system of international revenue and expenditure statistics mainly include the verification of the precision of the electronic data in the foreign-related revenue and expenditure declaration documents, the check between foreign-related revenue declaration documents and foreign-related revenue statistic reports, the check between the daily settlement books of foreign-related payments and the declaration documents of foreign payments, the verification of the timeliness of the input and transmission of electronic data of the banks, the check of consistency between the basic data and summarized data on the same level, the verification of the implementation of the rule of "declare first, then make payment", and the verification of the forms of basic information of the entities, etc.

Article 8

Foreign exchange administrations shall make a sum-by-sum check of the electronic data declared by the banks within their respective jurisdictions every ten days, and make irregular sample tests of the electronic data declared by the foreign exchanges on the next lower level. Foreign exchange administrations shall note down or print all the problems disclosed in the verifications, and inform the verified entity of the result of verification. The verified entities shall feed back their opinions within the prescribed time limit.

Article 9

Foreign exchange administrations shall determine the scope of verification of the electronic data of foreign-related revenue declarations.

1.

Select the types of declaration documents from the basic system of the monitoring system of international revenue and expenditure statistics that need to be verified, and then enter into the interface of declaration documents;

2.

Key in such factors as the area code, bank code, and the time period of inward and outward remittances into the interface of the declaration documents, and then choose the "search" key;

3.

After entering into the search interface, select the factors of verification for search, and after the results of search are displayed, select the "print" key, and then you'll enter into the printing interface. Select the "output" key, and select the document type of EXCEL, key in the file name, and then select the "save" key. Thus, the data is changed into the EXCEL format.

Article 10

Foreign exchange administrations shall verify the precision of the electronic data in the foreign-related revenue and expenditure declarations according to the following requirements:

1.

Verifying whether the elements of declaration are complete and standard, including the declaration numbers, currency and amount of revenue and expenditure, name of the payers and payees within the territory, (domestic) codes of the payers and payees, the country (region) and the code thereof, domestic accounts for payment and receipt, amount of spot foreign exchange or settled (or purchased) foreign exchange, other amounts, ways of settlement, transaction codes, transaction remarks, etc. in particular, verifying the declaration information whose country displayed is "China".

2.

Verifying whether logical relationship exists between the (overseas) payers and payees and the country (region) and the codes thereof, between the accounts of receipt and payment and the ways of spot foreign exchange or settlement (purchase) of foreign exchange, between currencies and the corresponding countries, between the code of transaction and the transaction remarks, etc.

3.

Verifying the precision of the selection of the types of declaration documents according to the contents of declaration.

4.

Checking whether the statistical reports of foreign payment within the quotas (except those under the item of writing-off for import) have been completed in accordance with the relevant operational rules.

The wrong or doubtful data found in the process of verifications shall be registered (see annexed form).

Article 11

Foreign exchange administrations shall check the foreign-related revenue declaration documents against the foreign-related revenue statistical reports.

The check shall be done in the "search" functions of the basic system within the monitoring system of international revenue and expenditure statistics. The search shall include three inconsistencies: the foreign-related revenue declaration documents inconsistent with revenue statistical reports, the statistical reports that want foreign-related revenue declaration documents, and the declaration documents that want foreign-related revenue statistical reports. The inconsistent declaration information shall be printed for keeping purposes, and shall be informed to the banks so as to find out the why they have happened.

Article 12

Foreign exchange administrations shall make checks between daily settlement books of foreign payments and the declaration documents of foreign payments.

1.

The foreign payment declaration documents include forms of writing off foreign exchange paid for imports (to be used as declaration documents), declaration documents of foreign payment for non-trade (including capital) (to entities), declaration documents of foreign payments (to individuals), foreign payments within quota (to entities) and foreign payments within quota (to individuals). The data are taken from the summarization system of the monitoring system of international revenue and expenditure statistics (foreign exchange administration version). The data in the daily settlement books of foreign payments are taken from the basic system of the monitoring system of international revenue and expenditure statistics (foreign exchange administration version).

2.

The check shall mainly cover:

a. whether the subject of declaration has filled in the declaration documents of foreign payments truthfully, timely, and completely;

b. whether the banks that handled the foreign payment businesses have made the daily settlement books of foreign payments according to the operational rules.

3.

The logical relationship between the declaration documents of foreign payments and the data in the daily settlement books of foreign payments shall meet the following requirements:

[amount in the forms of writing off foreign exchange paid for imports (to be used as declaration documents) + the amount in the declaration documents of foreign payments for non-trade (including capital) + the amount in the declaration documents of foreign payments (to individuals)] / [amount in the daily settlement books of foreign payments ?C amount of foreign payments within quota (to entities) ?C amount of foreign payments within quota (to individuals) ¡Ö 100%

Article 13

Foreign exchange administrations shall verify whether the electronic data of the banks have been input and transmitted in a timely way.

1.

The types of declaration documents to be verified include statistical reports of foreign-related revenues, forms of writing off foreign exchange paid for imports (to be used as declaration documents), declaration documents of foreign payment for non-trade (including capital) (to entities), declaration documents of foreign payments (to individuals), and statistical reports of foreign payments within quota.

2.

The verifications shall be made by using the searching functions in the above-mentioned declaration documents in the basic system of the monitoring system of international revenue and expenditure statistics. When a date is determined for verifications, the number of declarations and the amounts of the verification day as mentioned above shall be searched within the subsequent workdays. If neither the number of declarations nor the amounts searched during the subsequent days are consistent, it would mean that the electronic data of the banks have not been input and transmitted in a timely way.

Article 14

Foreign exchange administrations shall verify the consistency between the basic data in the monitoring system of international revenue and expenditure statistics and the summarized data.

1.

It shall be verified whether the number of declarations and amounts of the various declaration documents in the basic system are consistent with those in the summarized system so that the differences and errors that may exist between the basic data of the various declaration documents and the summarized data can be found out.

2.

The verification shall be made by means of the Verification Forms of Indirect Declarations of International Revenue and Expenditure Statistics.

3.

The total of the number of declarations and the total amounts in the basic system of the forms of writing off foreign exchange paid for imports (to be used as declaration documents) shall be identical to the total number of declarations and the total amounts in the summarized data and the payments made to the special economic zones (bonded areas, export processing zones, etc.)

Article 15

Foreign exchange administrations shall verify the implementation of the rule of "declare first, then make payments".

The verifications shall be done through the search functions within the statistical reports of foreign-related revenues in the basic system of the monitoring system of international revenue and expenditure statistics. On the search interface of the statistical reports of foreign-related revenues, key in the code of the payee (in the case of entities) or the name of the payee (in the case of individuals) as specified in the public announcements of "declare first, then make payment", and at the same time, limit the time for inward payment to three months, starting on the day when the public announcement becomes effective. What should be noted is that this search is targeted at all the banks within jurisdiction, and thus the code of financial institution shall be "%".

Article 16

Foreign exchange administrations shall verify the precision and integrity of all the elements of the electronic information in the forms of basic information of the entities within the basic system of the monitoring system of international revenue and expenditure statistics.

1.

The precision of the organizational and institutional codes (codes of the entities) according to the standard codes provided by the National Organizational and Institutional Code Management Center or the local technical supervision administration. At the same time, it shall be verified whether there are different names for a same code or different codes for a same name;

2.

The integrity and precision of the contact telephone numbers and the names of the entities shall be verified;

3.

Whether the enterprise attributes and industry attributes have been precisely filled in shall be verified through the function "inconsistency between the enterprise attributes and industry attributes" in the basic system of the monitoring system of international revenue and expenditure statistics;

4.

The preciseness of the currency codes and accounts shall be verified through the accounts provided by the enterprises when they make declarations for receiving and making payments.

Article 17

Foreign exchange administrations shall check whether the electronic data in the monitoring system of international revenue and expenditure statistics and data in the hardcopy declaration documents (the sheet to be kept by the foreign exchange administrations), including whether the data are in consistency with each other, whether there exists any omission of items or falsely filled items, and whether there are no electronic data for the hardcopy declaration documents. Foreign exchange administrations shall, within 15 workdays after each month ends, have taken random samples from the hardcopy declaration documents of the previous month, and the number of the declaration documents taken shall not be no less than 5% of the total declaration documents (they shall be randomly taken from all the banks).

The problems found in the verifications shall be recorded down one by one, and the banks concerned shall be informed of the reasons so as to correct the problems. The verified hardcopy declaration documents shall be marked in a conspicuous way for archivist purposes.

Chapter III On-the-spot Verification

Article 18

Foreign exchange administrations shall arrange for on-the-spot verifications according to the requirements and described below. The verifications shall be made in accordance with the relevant procedures as provided in the "Procedures of the State Administration of Foreign Exchange for the Verification and Punishments of International Revenue and Expenditure Statistical Declaration.

1.

The foreign exchange administrations on all levels shall make on-the-spot verifications to at least one bank within their respective jurisdictions, and accomplish on-the-spot verifications to all the banks within their respective jurisdictions. The verification of a bank may be done by verifying either one or more branches. It is encouraged that a general verification be done to all the branches of all banks.

2.

The foreign exchange administrations on all levels may conduct on-the-spot verifications irregularly to the relevant banks and subjects of declarations (entities) according to the demand of the non-on-the-spot verifications.

3.

The foreign exchange administrations on all levels shall, according to their overall situation and plans of declarations, organize irregularly on-the-spot verifications to the administrations on lower levels and cross-verifications among the administrations on lower levels.

Article 19

The object of on-the-spot verifications shall include banks and subjects of declaration (entities), and the content of the verifications shall cover the data in foreign-related revenue and expenditure declaration documents, the daily account books of foreign payments, the forms of the basic information of the entities, hardcopy declaration documents (the sheet to be kept by the banks), the making and execution of system for the internal control of the indirect statistical declaration of international revenue and expenditure of the banks.

Article 20

The verification of the data in the foreign-related revenue reported by banks may be done by sum-to-sum ticking of the data of declaration in the monitoring system of international revenue and expenditure statistics and the running accounts of the relevant accounting items provided by the banks.

1.

Verifying the comprehensiveness and timeliness of the data in foreign-related revenue and expenditure declaration.

(1)

Verifying the types and constituent elements of declaration documents. The types of declaration documents include: foreign-related revenue statistical reports, forms of writing off foreign exchange for payment of imports (to be used as declaration forms), declaration documents for non-trade (including capital) foreign payments (to entities), declaration documents of foreign payment (to individuals), and statistical reports for foreign payment within quota. The constituent elements of declaration to be verified include: the numbers of the declaration documents, the amount and currency of the payments made and received, the names of the inland payers and payees, terms of settlement, name of country, etc.

(2)

Ticking the checklist for verification on the item-by-item basis:

a. Whether the numbers of the declarations of foreign-related revenue and expenditure have been formulated in good time according to the operational rules;

b. Whether there are declaration data for which there are no data in accounting books;

c. Whether there are data in accounting books for which there are no declaration data;

d. Whether statistical reports for foreign payment within quota have been filled in for foreign payments within quota (except payment of foreign exchange for imports).

(3)

The unticked data shall be verified by consulting the accounting vouchers. If they have been wrongly reported, omitted, repeated, etc., a list of such data shall be recorded down, and at the same time, photocopies of the corresponding accounting vouchers shall be kept, and the relevant personnel of the banks under verification shall be required to fix their signatures, and the relevant departments shall be required to affix their seals for confirmation.

2.

Verifying the preciseness of the data in foreign-related payment declaration documents

(1)

The types of the declaration documents to be verified include foreign-related revenue declaration documents (to entities), foreign-related revenue declaration documents (to individuals), declaration documents for non-trade (including capital) foreign payments (to entities), forms of writing off foreign exchange paid for imports (to be used as declaration forms), declaration documents of foreign payments, etc.

(2)

The contents of verification include the transaction codes and transaction remarks for the declaration data, the country name of the oversea payers and payees, terms of settlement;

3.

Ways of verification

(1) The verification of the foreign-related revenue declaration documents under the item of money remittance shall be done by consulting the running accounts or other materials under the item of inward money remittance;

(2) The verification of the foreign-related revenue declaration documents under the item of letters of credit and collection via banks shall be done by consulting the relevant letters of credit and agreements of collection via banks;

(3) The verification of foreign payments shall be done by consulting the relevant application documents of foreign payment businesses.

Article 21

Foreign exchange administrations shall make verifications to the daily account books of foreign payments made by banks. Daily account books of foreign payments shall be made on the daily basis for all the foreign payments according to the practical situations. The basis of verification shall be the subsidiary ledgers of payment of the banks.

Article 22

Foreign exchange administrations shall make verifications to the forms of basic information of the entities established by banks. Whether the forms of basic information the entities have been filled in completely and precisely shall verified by checking the information included in the forms of basic information of the entities obtained from the monitoring system of international revenue and expenditure statistical declaration against the materials of the entities for opening accounts in the designated banks. The contents to be verified include the organizational and institutional codes (entity codes), names of the entities, enterprise attributes, industry attributes, and the opening of accounts, etc.

Article 23

Foreign exchange administrations shall make verifications to the hardcopy declaration documents kept by the banks. The verifications shall be made by way of taking random samples from the declaration documents in the current month and past months.

1.

The verification of the declaration documents taken randomly from past months shall cover:

(1)

Whether the declaration documents have been bound into books on the basis of month and types and have been properly kept;

(2)

Whether the declaration documents have been kept for 24 months;

(3)

Whether the declaration documents have been filled in precisely, completely and properly;

(4)

Whether any declaration documents have been wrongly used.

2.

The verification of the declaration documents of taken randomly from the current month shall be done by checking the hardcopy declaration documents of the current month (kept by banks) against the corresponding data reported in the monitoring system of international revenue and expenditure statistical declaration (bank version) to see if any of the declaration documents have not been input in good time.

Article 24

Foreign exchange administrations shall make verifications to the system of the banks for the internal regulation of the indirect statistical declaration of international revenue and expenditure.

1.

Where any direct report of international revenue and expenditure has been made on behalf of any other party, it shall be determined according to whether agreement has been concluded for making reports on behalf of another party, and whether the agreements have been properly kept.

2.

whether rules have been formulated for the internal operations of indirect report of international revenue and expenditure, whether the internal operation rules have met the requirements of the Operational Rules for the Statistical Report of International Revenue and Expenditure through Financial Institutions, and how they have been carried out;

3.

Other systems of work, administration, and job-related responsibilities that are connected with the work of international revenue and expenditure.

Article 25

Foreign exchange administrations shall make verifications to the subjects of declaration (entities). They shall make on-the-spot verifications to the subjects of declaration (entities) by combining the non-on-the-spot verification and on-the-spot verification of banks. The focus shall be laid on the preciseness of the data declared.

1.

Ways of verification. The verifications shall be based on the declaration data of foreign-related revenue and expenditure of the relevant entities in the monitoring system of international revenue and expenditure statistics and shall be done by consulting the relevant accounting titles and corresponding contracts of the entities under verification. Special attention shall be paid to the consistency between the amount of revenue and expenditure as specified in the accounting titles of the entities and the check sheets issued by the banks.

2.

The verifications shall cover the amount and currency of the transactions, the nature of transactions, the name and country of overseas payers and payees;

3.

The questionable data found in the process of verification shall be verified by consulting corresponding hardcopy declaration documents so as to decide who is be held liable, and detailed records shall be made for the verifications.

Chapter IV Supplementary Provisions

Article 26

The foreign exchange administrations on all levels shall, within 15 workdays after each quarter ends, report the verifications to the next higher foreign exchange administration in written form, and the verification reports shall cover the contents of verification, the problems found in the verifications, the corresponding results of handling, and shall reflect the problems that exist in the routine operations, the large sums reflected in the reported data, and the abnormal changes of revenue and expenditure, etc.

Article 27

In case any violations of the Measures for the Declaration of International Revenue and Expenditure Statistics and other relevant provisions are found through the verifications, they shall be punishable according to the Measures for the Punishment of Financial Violations of Law, the Rules of Implementation for the Measures for Declaration of International Revenue and Expenditure Statistics, and other relevant provisions.

Article 28

The present System shall enter into force as of March 1, 2003, and the power to interpret the present System shall remain with the SAFE.