Laws of the People's Republic of China

the State Administration of Foreign Exchange

Notice of the State Administration of Foreign Exchange on the Relevant Issues concerning Further Simplifying the Formalities for Foreign Exchange Payment and Verification in Import Trade

Hui Fa [2005] No. 67

September 15, 2005

The branches and foreign exchange departments of the State Administration of Foreign Exchange of all provinces, autonomous regions and municipalities directly under the Central Government, and the municipal branches of the State Administration of Foreign Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo and all the designated Chinese-funded foreign exchange banks:

For the purpose of further improving the foreign exchange administration of current accounts and promoting the facilitation of trade, the State Administration of Foreign Exchange (hereinafter referred to as the SAFE) has made the decision to simplify the formalities for foreign exchange payment and verification in import trade. The Notice on the relevant issues is hereby promulgated as follows:

I.

Simplifying the vouchers on verification of foreign exchange payment in import trade

1.

The provision that a letter of guarantee for the advanced payment shall be offered when an enterprise pays foreign exchange for importing the goods subject to advanced payment, shall be abolished, and an enterprise shall, upon the strength of the verification form of foreign exchange payment in import trade, the import contract, nominal invoices as well as other concerned documents, go through the formalities for foreign exchange payment at the designated foreign exchange bank (hereinafter referred to as the bank).

2.

The provision that the vouchers on the verification of foreign exchange payment in import trade include the import license, automatic import registration certificate and the import bill of lading under the payment upon delivery, shall be abolished, and an enterprise needs not to offer any of the aforesaid documents when going through the formalities for foreign exchange payment at the bank.

II.

Simplifying the administration on the List of Import Entities Making External Payment of Foreign Exchange (hereinafter referred to as the List)

1.

When applying for entering into the List, the enterprise, which has opened a current foreign exchange account as examined and approved by the branch or sub-branch of the SAFE (hereinafter referred to as the foreign exchange bureau), needs not to provide the form of archival filing and registration of import and export rights, the industrial and commercial business license and the certificate of code of the technical supervision bureau, etc. any more, and may directly apply for entering into the List upon the strength of the third copy of the Document on Approval of Foreign Exchange Business under Current Accounts for the enterprise to keep and an application form for the registration in the List of import entities.

2.

The provision that an enterprise whose industrial and commercial business license is only valid for less than one year may not make registration for entering into the List shall be abolished.

3.

The provision that an enterprise which has not operated import business for two consecutive years shall be deleted from the List" shall be abolished.

III.

Canceling the record-keeping management of foreign exchange payments in import trade for the cases under which the business entity declared for imported goods is inconsistent with the entity that pays foreign exchange, and simplifying the formalities for foreign exchange payment and verification in import trade

1.

Canceling the archiving administration of foreign exchange payments in import trade for the cases under which the business entity declared for imported goods is inconsistent with the entity that pays foreign exchange

The entity declared for imported goods may, via the function of online delivery of documents of the China E-port Outward Remittance System of Foreign Exchange, submit the original e-accounts of the customs declaration forms for imported goods to the paying bank; or an enterprise that needs to pay foreign exchange may, upon the strength of the verification form of foreign exchange payments in import trade, the customs declaration form for imported goods, import contract, commercial invoices as well as the agency agreement, directly go to the bank to handle the procedures for paying foreign exchange with the China E-port Enterprise IC Card of the business entity declared for imported goods. The bank shall examine the authenticity of the relevant certificates, check and write off and settle the original e-accounts of customs declaration form for imported goods.

2.

Where an enterprise handles the verification operations upon the strength of the customs declaration form for imported goods in which the business entity declared for imported goods is inconsistent with the entity that pays foreign exchange, it needs not to provide to the foreign exchange bureau the import license, automatic import registration certificate, tax-free certificate or other approval document.

When handling the formalities for verification and cancellation, the foreign exchange bureau shall check the verification form of foreign exchange payment in import trade, import contract, record-keeping form of foreign exchange payment in import trade (if record-keeping is required), the customs declaration form for imported goods as well as the agency agreement, and check and write off and settle the original e-accounts of the customs declaration form for imported goods by using Super-financial IC Cards..

IV.

Relaxing the record-keeping management of foreign exchange payments in import trade for the payment in other places

1.

The provision that no certificate may be issued and no foreign exchange may be paid if an enterprise making payment in other places has no branch, no loan for projects or no current foreign exchange account at the place where the foreign exchange is paid, shall be abolished.

When handling the issuance of certificates or paying foreign exchange in other places, an enterprise shall, upon the strength of the letter of record-keeping application , the import contract, the agency agreement (it shall be offered in the case of agency by mandate) affixed with its seal, as well as the relevant documents as prescribed by the SAFE under different settlement methods, go through the formalities for archival filing of foreign exchange payment in import trade as the payment in other places at the foreign exchange bureau at the place where the enterprise has made registration. The bank at the place where the enterprise pays foreign exchange shall, upon the strength of the registration form of foreign exchange payment in import trade, the verification form of foreign exchange payment in import trade as well as the documents as proscribed by the provisions on the administration of selling and payment of foreign exchange, conduct the business of foreign exchange payment in other places. In the case of foreign exchange payment subject to the payment upon delivery, it is necessary for the bank to check the authenticity of the customs declaration form for imported goods via the China E-Port Outward Remittance System of Foreign Exchange, and to check and write off and settle the original e-accounts of the customs declaration form for imported goods.

2.

As to the registration form of foreign exchange payment in import trade that is issued by the local foreign exchange bureau at the locality of an enterprise that make the payment in other places, the procedures for authenticity verification by calls and confirmation by affixing the seal of the foreign exchange bureau at the place where the enterprise pay foreign exchange shall be cancelled, and the enterprise may directly handle the procedures for certificate issuance or foreign exchange payment at the bank where the foreign exchange is paid.

V.

The provisions in Articles 1, 3 and 4 of this Notice shall not be applicable to those enterprises that are not listed into the List or into the Name list of Import Entities Subject to the Authenticity Examination and Approval of the SAFE.

VI.

This Notice shall not apply to those special economic areas such as bonded zones. As for the enterprises within enclosed customs supervision zones such as bonded zones which have obtained the rights to conduct foreign trade, they shall be governed by this Notice when going through the formalities for verification of foreign exchange payment in import trade.

VII.

This Notice shall come into force as of October 1, 2005. And in the case of any conflict between the previous provisions and this Notice, the latter shall prevail.

Upon receipt of this Notice, every branch shall promptly transmit it to the sub-branches and foreign-funded banks under their respective jurisdiction, and every designated Chinese-funded foreign exchange bank shall promptly transmit this Notice to its branches and sub-branches. Any question encountered during the implementation of this Notice shall be promptly fed back to the Current Account Administrative Department of the SAFE.