State Administration of Foreign Exchange, State Administration of Taxation and General Administration of Customs, Announcement on the Pilot Reform of the Foreign Exchange Control System for Trade in Goods

Issued: September 9 2011

Main contents: Beginning from December 1 2011, the pilot reform of the foreign exchange control system for trade in goods shall be launched in Jiangsu, Shandong, Hubei, Zhejiang (excluding Ningbo), Fujian (excluding Xiamen), Dalian and Qingdao. Under the reform, enterprises shall no longer be required to handle the procedures for the verification and settlement of foreign exchange receipts from exports. The foreign exchange control implemented by foreign exchange bureaux on enterprise trade in the pilot areas shall be changed from onsite verification and settlement of each receipt to offsite check of the total volume of goods. The foreign exchange bureau will comprehensively collect data of each foreign exchange receipt and payment of the import and export of, the trade in, goods of enterprises through the foreign exchange monitoring system for trade in goods, and periodically compare and assess the overall accordance between the flow of goods and flow of funds of enterprises to facilitate the foreign exchange receipts and payments of trade of compliant enterprises. Intensified monitoring shall be conducted on enterprises with irregularities, and onsite checks shall be carried out when necessary (Article 1).

Foreign exchange bureaux of pilot areas shall classify enterprises into categories A, B and C according to the enterprise's legal compliance of their foreign exchange receipts and payments of trade. Enterprises in category A are entitled to simplified documents for payment of foreign exchange for imports, and may handle foreign exchange payments at a bank directly on the strength of any document that is able to prove the genuineness of the transaction such as the customs clearance form for imports, contract or invoice. Enterprises in category C shall handle foreign exchange receipts and payments for trade upon registration with the foreign exchange bureau on a case-by-case basis (Article 2).