Laws of the People's Republic of China

State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Simplifying the Verification Procedure of Sell Foreign Exchange for Payment Under the Item of Advanced Payment

Hui Fa[2003]No.119

October 9,2003

The branches and offices of the State Administration of Foreign Exchange (hereinafter referred to as SAFE) of all provinces, autonomous regions and municipalities directly under the State Council and cities with separate plans under the state plan, and Chinese-invested Foreign exchange designated banks,

The SAFE resolved to simplify the verification procedure of sell foreign exchange for payment under the item of advanced payment in import business in order to meet the need of the new situation after the access of WTO, to strengthen the international competitiveness of the domestic enterprises and to promote the trade convenience. Related matters are notified as follows:

1.

The import units are allowed to buy the foreign exchange for payment in the designated banks directly based on the contract, the performance invoice, the verification form of pay-in-foreign-exchange of import and other related documents in the circumstance that the amount of payment does not exceed US$200,000 or its equivalent, and is allowed not to offer the advanced payment L/G with test key that is checked by the banks. The import units must buy the foreign exchange for payment in the designated banks based on the contract, the performance invoice, the verification form of pay-in-foreign-exchange of import and other related documents in the circumstance that the amount of payment exceeds US$200,000 or its equivalent, and the advanced payment L/G must be offered at the same time.

2.

Domestic foreign-invested enterprises can buy the foreign exchange for payment directly in the designated banks based on the contract, the performance invoice, the verification form of pay-in-foreign-exchange of import, Foreign Exchange Register of foreign-invested enterprises or the testimonial offered by the relative corporations or other documents without offering the advanced payment L/G to pay in advance to its abroad headquarters or the filiale, share-participating corporations or holding corporations established by the abroad headquarters in the states or regions outside China(besides Hong Kong, Macao and Taiwan ).

3.

Domestic Chinese enterprises can buy the foreign exchange for payment directly in the designated banks based on the contract, the performance invoice, JKFHHXD, the admission certificate of oversea-invest obtained from the competent commerce authority or the testimonial offered by the relative corporations or other documents without offering the advanced payment L/G to pay in advance to the abroad corporations or its filiale, share- participating corporations or holding corporations in the states or regions outside China( besides Hong Kong, Macao and Taiwan ).

4.

The import unit can report and be kept on record at the branches or offices of the SAFE by offering the contract, custom handbook, the bill of entry in the term of material processing with the stamp of verification of the custom, B/L, invoice and guarantee of going through the verification procedure in time in the circumstance of buy the foreign exchange for payment under the item of import material processing. It can go through the procedure of the verification and of buying the foreign exchange for payment in the designated banks based on the Record of Payment in Foreign Exchange of Import that obtained by the local departments of foreign exchange and the certificate of buying the foreign exchange for payment. The branches and offices shall grant the Record of Payment in Foreign Exchange of Import of the category of truthfulness verification to the import unit after verify all the documents.

5.

The designated banks shall strictly audit the documents in the course of sell foreign exchange for payment under the item of advanced payment in the accordance with this circular, and shall strictly audit all the testimonials offered by the relative corporation in the course of sell the foreign exchange for payment in accordance with Article 2 and Article 3 of this circular. If the payment can not be justified as the payment between relative corporations, it should be done in accordance with Article 1

6.

This circular shall not be applied to the units out of the list of import units of pay-in-foreign-exchange and the list of units that pass the truthfulness audit of the SAFE

7.

These Provisions come into effect as of the date of promulgation. If any provisions previously promulgated run counter to these Provisions, these Provisions shall prevail. The branches and offices shall transmit this circular to the subordinate institutions and designated banks and all the designated banks to the branches immediately after the receipt of the circular. Any problem raised in the course of implement shall be reported to the Department of Regular Items of SAFE in time.