Laws of the People's Republic of China

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange (SAFE) on Foreign Exchange Administration Related to Trade by Chartered Plane

HuiFa [2002] No.94

September 27, 2002

SAFE Branches in all provinces, autonomous regions, and municipalities directly under the Central Government, exchange administration offices, and SAFE branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:

In order to guide and regulate trade by chartered plane, perfect related foreign exchange administration, and further promote the development of foreign trade, a circular on relevant issues is hereby given as follows:

1.

The trade by chartered plane stated in this Circular refers to the export of products such as clothing, household appliances, footwear and headgear to Russia and other countries in the Commonwealth of Independent States by the charter of airfreighter, which is conducted by enterprises authorized by the Civil Aviation Administration of China to charter overseas planes as the agent of domestic enterprises, establishments, and individuals.

2.

For export by chartered plane, the entities with export business qualification (hereinafter referred to as exporters) shall apply to the branches or sub-branches of the SAFE (hereinafter referred to as SAFE offices) in their localities for the paper of export proceeds verification (hereinafter referred to as verification paper). The SAFE offices shall issue to exporters the verification paper in accordance with the Regulations on the Verification of Export Proceeds and its implementing rules.

3.

Exporters that conduct export by chartered plane shall go through the procedure of customs declaration for export and delivery of verification paper in accordance with relevant regulations, and go through the procedure of export proceeds verification in accordance with following provisions:

(1)

If settlement is made in foreign exchange, the exporter shall go through the procedure of export proceeds verification with valid vouchers and certificates including verification paper, customs declaration form for export, and special memo of the sale of foreign exchange or notice of collection.

(2)

If settlement is made in foreign currency or individual remittance, the exporter shall go through the procedure of export proceeds verification with the verification paper, customs declaration form for export, invoice, and memo of the sale of foreign currency by other entities or individuals involved in trade by chartered plane, or memo of the sale of individual inward-remitted foreign exchange.

(3)

If settlement is made in renminbi, the exporter shall go through the procedure of export proceeds verification with the verification paper, customs declaration form for export, invoice, and declaration form for carrying renminbi cash inward that has been verified by the customs, or receipt of inward remittance in renminbi issued by a bank.

4.

When the SAFE offices handle export proceeds verification under the item of trade by charted plane for exporters, the customs declaration forms shall be checked to ensure the export goods be products such as clothing, household appliances, or footwear and headgear, export destination be Russia and other countries in the Commonwealth of Independent States, and transportation means be air freight.

5.

The SAFE offices shall go through the procedure of export proceeds verification for exporters in accordance with the provisions of the Regulations on the Verification of Export Proceeds and of this Circular, and evaluate the export proceeds of exporters in accordance with relevant regulations.

6.

The SAFE offices shall inspect and urge the commercial banks in their localities to conscientiously implement the Circular of the People's Bank of China on Issues Related to the Administration of Foreign Currency (YinFa [2001] No.376) and its supplementary by extending their banking network for purchase of foreign exchange from resident individuals nationwide, especially at Yabao Road and Xiushui Street in Beijing, in Xinji in Hebei Province, Yiwu in Zhejiang Province, Shishi and Quanzhou in Fujian Province. The SAFE offices shall also urge the commercial banks in their localities to conscientiously implement the Circular of the People's Bank of China on Issues Related to the Adjustment of Policies on Foreign Currency (YinFa [2002] No.283) by further adjusting the bid and asked rates of foreign currency and allowing them to fluctuate within specified range to encourage the sale of foreign currency to the banking system.

7.

The SAFE offices shall further strengthen administration of the verification paper, prohibit the illegal act of lending or trading the verification paper, and ally with the forces of public security and industry and commerce administration agencies to sternly crack down upon illegal foreign exchange transactions and normalize the order of the foreign exchange market.

8.

The SAFE offices shall report in time to local governments the development of trade by chartered plane and related foreign exchange policies, strengthen the coordination and cooperation with the foreign trade and economic cooperation agencies, customs, taxation agencies, and fiscal agencies to set up a mechanism of joint supervision and administration. And meanwhile, various media such as newspapers, TV and radio broadcasting, and various means such as forums and training courses, shall be used to propagandize foreign exchange policies to the enterprises engaged in trade by chartered plane and persons concerned.

9.

The SAFE offices shall conduct separate statistics on export by chartered plane and related proceeds verification. All branches of the SAFE are requested to report to the Current Account Management Department of the SAFE the Statistical Statement of Export Proceeds Verification under Trade by Chartered Plane (see Attachment) for the previous month within the first 10 working days of every month.

10.

Violators of the provisions of this Circular shall be penalized by the SAFE offices concerned in accordance with the Regulations on the Exchange System of the People's Republic of China and other relevant regulations.

11.

This Circular shall enter into force as of October 15, 2002. Matters not stated in this Circular shall be subject to relevant foreign exchange regulations. In case of any contradiction with previous regulations, this Circular shall prevail.

On receiving this Circular, all branches of the SAFE shall transmit it promptly to the sub-branches and commercial banks under their jurisdiction.

Attachment:

Statistical Statement of Export Proceeds Verification under Trade by Chartered Plane (Omitted).