In order to strengthen supervision of cross-border capital flows, perfect examination of the authenticity and conformity of export transactions and foreign exchange collection and settlement, the State Administration of Foreign Exchange (SAFE), the Ministry of Commerce, and the General Administration of Customs (GACC) recently jointly promulgated the "Measures for the Online Inspection of Foreign Exchange Collection and Settlement of Export Proceeds" (hereinafter referred to as "the Measures"), and decided to implement management of online inspection of foreign exchange collection and settlement of export proceeds beginning from July 14, 2008. The SAFE also published the "Notice on Issues regarding Implementation of the Measures for the Online Inspection of Foreign Exchange Collection and Settlement of Export Proceeds."
Implementation of online inspection of foreign exchange collection and settlement of export proceeds will check on conditions regarding foreign exchange collection and settlement of export proceeds of enterprises under the condition that their exported goods go through customs, with a view to effectively determining the actual trade background of capital flows under the item of trade in goods so as to ensure the authenticity and conformity of exports and foreign exchange collection and settlement. The Measures stipulate that the foreign exchange collected by an enterprise from exports (including the advance receipts) shall first be put into a to-be-checked account for foreign exchange collected from exports. When an enterprise sells or transfers foreign exchange from the to-be-checked account, the bank shall log onto the online inspection system for foreign exchange collection and settlement of export proceeds and make a note regarding the receivable amount of foreign exchange under the corresponding trade category in the inspection system.
The online inspection system for foreign exchange collection and settlement of export proceeds was established by the SAFE, the Ministry of Commerce, and the General Administration of Customs, relying on the China E-port and drawing on the successful experience of online inspection of import payments in foreign exchange in 1998. The online inspection system uses electronic information networking to replace the traditional paper vouchers and certificates to check and supervise foreign exchange collection and settlement under the item of trade in goods. This approach is convenient for banks and enterprises in terms of operations, saving them considerable time, raising efficiency, and also improving regulatory efficacy. In order to continue providing conveniences for legal and standardized operations of trading activities for enterprises, adequate consideration will be given to the different features of each trading category and each industry by providing differential treatment in identifying the corresponding relationship between authenticity and conformity between exports and foreign exchange collection and settlement.
To facilitate implementation of the online inspection system for foreign exchange collection and settlement of export proceeds, to perfect statistical supervision of the external debt, to restrict the scale of the short-term external debt, the SAFE simultaneously released the "Circular on Issues concerning Implementation of External Debt Registration and Management under the Item of Corporate Trade in Goods," mandating registration and management of corporate export advance receipts and import deferred payments. Strengthening of the follow-up monitoring of the advance receipts and prospective actual exports is necessary to prevent capital without a real trade background from flowing into China through trade channels to obtain speculative income, while the improvement in the supervision and management of import deferred payments is conducive to controlling potential debt risks and preventing huge capital outflows in the future. While strengthening management of trade credits, the administration will give adequate consideration to the actual needs of special industries and enterprises, such as large complete-sets of equipment and the shipping industry.
The online inspection system for foreign exchange collection and settlement of export proceeds will run on a trial basis as of July 14, 2008 and will be put into formal operation as of August 4, 2008. Registration of export advance receipts and import deferred payments will be implemented as of July 14, 2008 and October 1, 2008 respectively.
Enforcement of the above two policies will further perfect the methods for inspecting the authenticity of trade in goods, which will help improve China's foreign trade environment, regulate capital inflows and outflows of foreign exchange under the item of trade in goods, resolve the problem of discrepancies between exports and foreign exchange collection and settlement, promote the smooth and healthy development of our country's foreign economy, prevent international economic risks, and create a more favorable environment for further reform and opening-up. (End)