State Administration of Foreign Exchange and General Administration of Customs, Questions Relevant to Further Strengthening the Administration of Sale, Payment and Reconciliation of Foreign Exchange for the Carry Over of Materials in Connection with Processing Trade Involving Further Processing Circular

Issued: March 27 2001
Effective: as of date of receipt

Main contents: According to the Circular, settlement and transfer of goods for further processing in contract processing trade and import processing trade shall be deemed import and export and subject to customs supervision as such. Customs shall verify the foreign exchange documents related to such settlement and transfer and issue foreign exchange certificates for the related customs declarations (Item One). This also applies to the pro forma customs declaration in respect of an approved carry over of goods for further processing (Item Two). Where the goods of an import processing transaction are carried over to a further processing transaction under a contract processing transaction with customs approval, the State Administration of Foreign Exchange shall require full payment of foreign exchange in respect of the goods as normally required of any other import processing transaction (Item Three). Where the goods in an import processing transaction are carried over to a further processing transaction under an import processing transaction in which the currency of settlement is renminbi, the foreign exchange administration at the locality shall conduct the required reconciliation procedures pursuant to relevant regulations.
Related legislation: State Administration of Foreign Exchange and General Administration of Customs, Implementation of the Pilot Project of ¡°Port of Entry Electronic Law Enforcement System¡± in Network Verification and Cancellation of Foreign Exchange Received from Export Circular, 2000; State Administration of Foreign Exchange, Sale, Payment, Verification and Cancellation of Foreign Exchange for the Carry Over (Passing on to a Downstream Factory) of Materials for Further Processing Operational Procedures, Mar 5 1999, CLP 1999 No.5 p7 and State Administration of Foreign Exchange and General Administration of Customs, Clarification on Questions Relevant to the Use of the Import and Export Customs Declaration Network Verification System Circular