The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo; and all designated Chinese-funded foreign exchange banks:
In order to improve the monitoring and management of statistics on the external debt and to prevent risks in external debt payments, the State Administration of Foreign Exchange has decided to manage registration of the external debt under the item of corporate trade in goods in line with the "Regulations on the Foreign Exchange System of the People's Republic of China," the "Provisional Regulations for Statistical Monitoring of the External Debt," and the "Tentative Measures for the Administration of the External Debt," and other regulations, and hereby provides notification as follows:
1. The term "external debt" under the item of corporate trade in goods as referred to in this Circular includes advance receipts of export proceeds and deferred payments of imports. The term "advance receipts" refers to the export proceeds in foreign exchange received on a date as agreed in the export goods contract prior to the export date as stipulated in the contract, or the actual collection date prior to the actual export declaration date; the term "deferred payments" refers to the payment in foreign exchange made on a date as stipulated in an import contract for cash on delivery which is later than the date of import as stipulated in the contract, or actually made on a date more than 90 days later than the date of actual import entry.
2. Registration management shall be adopted for corporate advance receipts and deferred payments. An enterprise may use the Internet or go to the local SAFE branch (shortened as the "SAFE" below) to log onto the trade credit registration management system on the SAFE online service platform (website: www. safesvc.gov.cn), and handle the procedures for registration or cancellation of each advance receipt and deferred payment.
3. From July 14, 2008, in cases where an export contract newly signed by an enterprise includes clauses on advance receipts, or in cases where advance receipts are incurred with no corresponding contract stipulations, the enterprise shall handle the procedures for the contract registration for advance receipts within 15 working days after the contract is concluded or the advance receipt is actually received. Those who actually receive advances with no corresponding contract stipulations shall at the same time handle the registration procedures for the withdrawal of the advance receipts. The enterprise shall handle the registration procedures for the withdrawal of the advance receipts within 15 working days after receiving the advance in line with the contract stipulations.
As for the export declaration of goods or return of foreign exchange for non-exported goods under the item of registered advance receipts, the enterprise shall handle the procedures for cancellation of advance receipts within 15 working days commencing from the date when the goods are exported or the date of return of the foreign exchange. In cases that exceed the goods export date by more than 30 days (including 30 days) under the item of registered advance receipts, the enterprise shall issue a written statement stating the reasons for not canceling the advance receipts, and submit to the SAFE the relevant evidentiary materials for the record. The procedures for the return of foreign exchange shall be handled in line with the relevant regulations concerning return and compensation of foreign exchange in the "Measures for the Administration of Verification and the Writing-Off of Export Proceeds in Foreign Exchange."
Foreign exchange advances of the enterprise under the item of export buyer's credit shall be subject to registration procedures for advance receipts. Foreign exchange proceeds under the item of trade finance such as corporate export bill purchases, forfeiting, and factoring are not subject to the registration procedures for advance receipts.
4. The receivable amount of foreign exchange in advance receipts shall be generated by the registration management system of trade credit on the basis of the registration of the advance receipts, the foreign exchange collection information about the export proceeds of the enterprise, and the industrial features. The bank shall handle the procedures for foreign exchange collection and settlement of advance receipts within the limit of the receivable amount for the enterprise in accordance with the "Measures for the Online Inspection of Foreign Exchange Collection and Settlement of Export Proceeds under Trade in Goods" and other relevant regulations on foreign exchange administration.
5. Beginning from October 1, 2008, in cases when newly signed import contracts by the enterprise include clauses for deferred payments, or when there actually incurs a deferred payment, the enterprise shall handle the procedures for registration of the deferred payment within 15 working days after 90 days from the date when the contract is concluded or the customs issues the import declaration form. The enterprise shall handle the procedures for cancellation of a deferred payment within 15 working days after the registered deferred payment is made under the item of registered deferred payments.
6. The annual cumulative amount of deferred payments registered by the enterprise shall not exceed 10% of the total amount of foreign exchange of the enterprise paid during the previous year. Requirements for deferred payments that exceed the above proportion in areas such as imports of large complete-sets of equipment or the signing of long-term import contracts, as well as requirements for deferred payments by newly-established enterprises, shall be determined by the SAFE in consideration of the industrial features and the actual conditions of the enterprise after soliciting the opinions of the commercial administrative department and the industrial association. The bank shall handle the procedures for the purchase and payment of foreign exchange for deferred payments within the corresponding range for the enterprise in line with the relevant regulations for the purchase and payment in foreign exchange for import trade.
7. The SAFE shall conduct supervision and inspection of the conditions regarding registration and cancellation of the corporate advance receipts and deferred payments.
Any enterprise that does not follow the regulations in this Circular for handling the procedures for registration and cancellation of advance receipts and deferred payments, or uses false contracts to handle the registration, shall be punished in line with the "Regulations on the Foreign Exchange System of the People's Republic of China" and the relevant regulations for external debt administration. After accepting punishment and obtaining approval, the enterprise shall handle the procedures for registration for advance receipts and deferred payments. In cases of deferred payments without registration, no bank shall handle the procedures for the purchase and payment of foreign exchange for the enterprise.
Any enterprise that has not handled the procedures for cancellation registration after 90 days (including 90 days) after registration of the export date under the item of advance receipts and cannot provide satisfactory reasons and that is deemed to have incurred illegal external debts based on the regulations for external debt administration shall be punished by the SAFE in line with the "Regulations on the Foreign Exchange System of the People's Republic of China" and the relevant regulations for external debt administration, and shall be ordered to return the advance receipts and to go through the procedures for cancellation of the advance receipts in accordance with this Circular.
Any bank that handles the procedures for foreign exchange collection and settlement of advance receipts or the procedures for purchase and payment of foreign exchange for deferred payments for an enterprise in violation of this Circular shall be punished in line with the "Regulations on the Foreign Exchange System of the People's Republic of China" and the relevant regulations for external debt administration.
8. The administration concerning the verification and writing-off of the foreign exchange of an enterprise under the item of advance receipts and deferred payments and the administration of deferred payments under the item of "non-cash on delivery," such as a L/C, that exceeds 90 days (not including 90 days) shall be conducted in accordance with the current regulations.
9. This Circular applies to individual foreign trade operators and enterprises in bonded areas under customs supervision which are qualified for foreign trade operations and are engaged in trade in non-bonded goods.
10. This Circular will come into force as of July 14, 2008. Beginning on October 1, 2008, in any cases where relevant prior provisions are inconsistent with this Circular, this Circular shall prevail.
All branches and foreign exchange administrative departments of the SAFE shall, upon receiving this Circular, transmit it in a timely fashion to the central sub-branches and banks under their respective jurisdictions, and shall prepare for earnest implementation. If any problems are encountered in the implementation of this Circular, please promptly report them to the SAFE.
Contact Number:
Capital Account Management Department, SAFE. Yong Liang: 010-68402250
Information Center, SAFE. Yi Wang: 010-68402469                                                        
July 2, 2008