Network Inspection Measures for Export FOREX Receipt and Settlement & Registration and Management under Trade Credit

Part II. Registration Administration on Trade Credit

1. The purpose and basis for the country’s FOREX administration departments to conduct the registration management on the enterprise’s foreign loans under the item of goods trade.

In order to the reinforce the supervision and administration of the statistic of foreign loans and to prevent the payment risk of foreign loans, the SAFE decided to conduct the registration management on the enterprise’s foreign loans under the item of goods trade in accordance with the stipulations in the PRC’s FOREX Administration Rules, Temporary Stipulations on the Supervision of Foreign Loans’ Statistic and Temporary Measures on Foreign Loans’ Administration, etc.

2. The contents included in the foreign loans under the item of enterprise’s goods trade.

The contents included enterprise receipt in advance for export and deferred payment for import.

Receipt in advance represents the FOREX receipt with contractual FOREX receiving date ahead of the contractual export date under the goods export contract or with actual FOREX receiving date ahead of the actual export customs reporting date. Deferred payment represents the FOREX payment with the contractual FOREX payment date later than the contractual import date under the goods import contract or with the actual FOREX payment date later than the actual import customs reporting date over 90 days (exclusive).

3. From when should the country’s FOREX administration departments conduct the registration management on the foreign loans under the item of enterprise goods trade? What are the contents for registration?

Starting from 14 July 2008, if the enterprise’s new export contract includes the clause of receipt in advance or even there is no such clause in the contract but actually receipt in advance occurs, it should complete the registration procedure 15 days ahead of the contractual date or actual receipt date for the receipt in advance contract. If the contract does not include the clause but the enterprise has actually received the advance payment, it should in the same time complete the drawing registration procedure for the FOREX receipt. The enterprise should complete the drawing registration procedure within 15 days from the contractual date for advance receipt. The enterprise should complete the deregistration procedure for the advance receipt within 15 days after the goods has been exported.

Starting from 1 October 2008, if the enterprise’s new import contract includes the clause of deferred payment or even there is no such clause in the contract but actually deferred payment occurs, it should complete the registration procedure of deferred payment within 15 days from the contract date or from the 90th day after the import customs declaration has been issued by the Customs. The enterprise should complete the deregistration procedure for the deferred payment within 15 days after the registered deferred payment has been paid.

4. Punishment clauses

If an enterprise is not conducting the registration and deregistration procedures for the advance receipt and the deferred payment in accordance with the Circular (Huifa[2008] No. 30), it should be punished according to the PRC’s FOREX Administration Rules and relevant stipulations for foreign loans administration. The enterprise should make up for the registration procedure for the advance receipt and deferred payment after accepting the punishment and through approval. The bank should not handle the FOREX purchase and payment procedures for enterprise which has not made up for the registration of deferred payment.

If an enterprise has not completed the deregistration procedure and without a reasonable explanation after 90 days (inclusive) from the registered goods export date under the item of advance receipt, and it is being regarded as illegal foreign lending based on the stipulations for foreign loans administration, it should be punished according to the PRC’s FOREX Administration Rules and relevant stipulations for foreign loans administration. The advance receipt should be returned and the deregistration procedure for the advance receipt should be completed according to the Circular.

If the bank acts against the Circular and handle the procedures of advance receipt FOREX settlement and deferred payment FOREX purchase, it should be punished against the PRC’s FOREX Administration Rules and relevant stipulations for foreign loans administration.

Copyright 2007 Simon Chiu & Associates Limited