Circular of the State Administration of for Foreign Exchange on Facilitating Trade Documents Reviews by Banks
The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (hereinafter referred to as the “SAFE”) of all provinces, autonomous regions, and municipalities directly under the Central Government; the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and all designated Chinese-funded foreign exchange banks:
To further facilitate trade authenticity reviews by banks and enhance trade facilitation, the SAFE decides to give banks access to the "Customs declaration information verification" module of the foreign exchange monitoring system for trade in goods (bank version) in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration. Relevant issues are notified as follows:
I. For a single transaction of foreign exchange payment for trade in goods (excluding offshore resale business, the same below) in an equivalent amount of more than USD 100,000 (exclusive), banks shall review relevant transaction documents in accordance with the existing provisions, and in principle also shall verify the electronic Customs declaration information for imports through the module of "Customs declaration information verification" of the system; and banks could waive the verification if enterprises' external payment of foreign exchange is confirmed to be true and legitimate.
For a single transaction of foreign exchange payment for trade in goods in an equivalent amount of not more than USD 100,000, banks could independently decide whether to verify the electronic Customs declaration information for imports through the system, under the principles of "know your customer, understand your business and due diligence".
II. Enterprises shall provide true Customs declaration information to banks for making external payment of foreign exchange under trade in goods.
III. Banks shall verify the electronic Customs declaration information for imports through the system in the following way:
(I) For enterprises that have finished the import declaration procedures, banks shall verify the information in the system within 5 working days after handling the payment of foreign exchange under trade in goods, based on the amount of foreign exchange paid this time under trade in goods.
(II) For enterprises that have not finished the import declaration procedures, banks shall require them to provide relevant declaration information within 40 days since the date when they finish the declaration procedures (or the import date, the same below), and to go through verification procedures through the system based on the amount of foreign exchange payments made under trade in goods this time
(III) For enterprises that have finished the import declaration procedures but could not provide the declaration information in time due to proper reasons, banks could handle the procedures for payment of foreign exchange after confirming that the transaction is authentic and legitimate, and shall handle verification procedures for the enterprises within 40 days since they finish the declaration procedures. For the enterprises do fail to provide declaration information, banks shall make a note on the transaction of foreign exchange payment in the system.
(IV) In the event that the external payment of foreign exchange under trade in goods is higher than the amount declared due to proper reasons such as tolerance, banks shall indicate the reasons in the system when handling verification.
IV. In any of the following cases, banks shall make notes of the enterprises in the system on a transaction-by-transaction basis, and such notes shall be made known to other banks across the country through the system:
(I) Fail to provide declaration information and give convincing explanations in a given period;
(II) Suspected of repeated use of declaration information and fail to give convincing explanations;
(III) Suspected of the use of falsified declaration information;
(IV) Other information to be noted.
The notes will remain effective in 24 months. Where an enterprise is mistakenly noted due to misoperation by a bank, the note can be revoked after internal approval of the bank.
V. Where the electronic declaration information for imports is missing from the system due to the incompleteness of the data transmitted or other reasons, banks can handle payment of foreign exchange after confirming the transaction is authentic and legitimate and handle verification in time in the system. Banks shall note the payment of foreign exchange in the system in case that the electronic declaration information for imports is missing from the system for a long time.
In case of the failure to log on to the system, banks shall respond in accordance with the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Relevant Issues for Doing a Good Job in the Foreign Exchange Administration of Trade in Goods under Emergency Situations (Huizongfa No. 123 ).
VI. Banks shall amend the internal control systems of relevant businesses in time in accordance with this Circular, and guarantee the security of the enterprises' electronic declaration data for imports.
VII. The SAFE and its branches and sub-branches (foreign exchange authorities) shall ensure the guidance to banks on declaration information verification, solve problems in time and review or inspect irregularly banks' efforts in declaration information verification.
VIII. The foreign exchange authorities shall, in accordance with the Regulations of the People’s Republic of China on Foreign Exchange Administration, punish whoever violates the provisions of this Circular.
IX. This Circular shall be interpreted by the State Administration of Foreign Exchange, and shall come into force as of May 1, 2017.
Upon receipt of this Circular, the SAFE branches and foreign exchange administrative departments should immediately forward it to the central sub-branches (sub-branches), local commercial banks, and foreign banks within their respective jurisdiction, and all Chinese-funded banks should promptly forward it to their branches. For any problems arising from implementation of this Circular, please provide timely feedback to the SAFE.