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	MEASURES FOR THE MANAGEMENT OF THE VERIFICATION OF OUTWARD REMITTANCE BALANCES BY IMPORT

	(Circular of the State Administration of Foreign Exchange on Printing and Distributing the Measures for the Management of the Verification of Outward Remittance Balances by Import , No. 116 [2004] of the State Administration of Foreign Exchange, December 3, 2004: In order to further improve the management of the verification of outward remittances by import, standardizing the operation of the verification of outward remittance balances by import and raising the efficiency of the management of the verification of outward remittances by import, the SAFE has formulated the Measures for the Management of the Verification of Outward Remittance Balances by Import (hereinafter referred to as the "Measures"). The key points are the following: 1. As effective measures for supplementing the existing provisions on the management of outward remittances by import, the balance verification management on the verification of outward remittances by import reported for verification aims at solving the problem that the formalities for handling the verification of outward remittance by import can not be handled because there is difference between the amount of an importer's outward remittance by import and the delivered price due to any objective factor, further promoting trade facilitation and lightening the burden of work of both importers and foreign exchange bureaus. All the SAFE's branches and sub-branches (hereinafter referred to as the "foreign exchange bureau(s)") shall make publicity and explanation to importers and ensure a good implementation of the Measures; 2.When handling the verification of outward remittance balances by import reported for verification by importers, the foreign exchange bureau shall carefully verify the materials relating to the verification of balances and keep record thereof; 3.Each foreign exchange bureau shall, in the light of its respective regional conditions, set up an internal control system of level authorization verification of balances; 4.The Measures shall come into force as of February 1, 2005, before which, the SAFE shall modify and up-grade the computer system for the verification of outward remittances by import and make the upgraded computer system have the functions to check, count and supervise the data of the verification of balances. The date on which the computer system will be upgraded shall be notified separately by the SAFE; After receipt of this Circular, each foreign exchange bureau shall promptly transmit it to its central sub-branches. Any problems arising in the implementation of this Circular shall be reported promptly to the SAFE.)


SUBJECT : FOREIGN EXCHANGE; VERIFICATION OF OUTWARD REMITTANCE; IMPORT
ISSUING DEPARTMENT : THE STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 12/03/2004
IMPLEMENT DATE : 02/01/2005
LENGTH : 1,473 words
TEXT :

Article 1. These Measures are formulated in accordance with the Interim Measures for the Supervision and Administration of the Verification of Outward Remittances by Trade Import and other relevant provisions for the purpose of improving the verification management of outward remittances by import, standardizing the operation of the verification of outward remittance balances by import and raising the efficiency of the management of the verification of outward remittances by import.

Article 2. For the purpose of these Measures, "a balance to be verified" means the balance between the amount of outward remittance reported for verification by an importer and the delivered price (i.e. the product of the unit price of the goods indicated in the declaration entry form and the quantity of the goods).

A balance to be verified may be either a balance due to more delivered goods or a balance due to less delivered goods. When the price of the actually delivered goods is more than the amount of the outward remittance reported for verification, there is a balance due to more delivered goods; when the price of the actually delivered goods is less than the amount of the outward remittance reported for verification, there is a balance due to less delivered goods.

Article 3. These Measures shall apply to the verification of outward remittances by import reported for verification of the following circumstances:

(1) one outward remittance, one delivery and one submission for verification under a single contract;

(2) one outward remittance, multiple deliveries and one submission for verification under a single contract;

(3) multiple outward remittances, one delivery and one submission for verification under a single contract;

(4) multiple outward remittances, multiple deliveries and one submission for verification under a single contract.

The verification of importers' balances to be verified shall be conducted based on different contracts. In the case of multiple submissions for verification under a single contract, the importer shall apply for the verification of a balance at the last submission for verification when the contract is completely fulfilled.

Article 4. In the case of a balance to be verified, under a single contract, not exceeding the equivalent of US$5,000 (inclusive) or a balance not exceeding 2% (inclusive) of the contract price though exceeding the equivalent of US$5,000, the SAFE's branch or sub-branch (hereinafter referred to as the "foreign exchange bureau") may handle the verification of the balance directly against the importer's statement on the balance, import contract and other verification-related documents.

Article 5. In the case of a balance to be verified, under a single contract, more than the equivalent of US$5,000 and exceeding 2% of the contract price, the importer shall apply for the verification of a balance by providing other relevant materials in accordance with Articles 7 and 8 hereof.

Article 6. The cumulative balance that an importer submits (reports) for verification for a month (including balances either above or below the above-mentioned amount or standard, with balances due to more delivered goods being counted as negative numbers) shall not exceed the equivalent of US$100,000 (inclusive) in principle. Each foreign exchange bureau may make an appropriate adjustment of the quota in the light of the regional conditions.

Article 7. To apply for the verification of an outward remittance balance by import under a single contract, which is more than the equivalent of US$5,000 and exceeds 2% of the contract price due to less delivered goods, the importer shall, in addition to the relevant verification-related documents, provide the import contract and a statement on the balance with both the signature of the legal representative and the corporate seal of the importer on it, and provide the relevant certificate documents respectively according the following different circumstances:

(1) a certificate issued by the relevant chamber of commerce or a quotations list as certified by the relevant exchange or by any member of such an exchange, in the case of a balance caused by the price movement in the foreign market;

(2) the relevant letters and telegrams with the exporters and a certifying document issued by the relevant commodity inspection agency in the case of a balance caused by the problem of the quality of the imported goods or, if no such certifying document can be provided due to any objective factor, a corresponding document certifying the quality of the goods and a guarantee letter;

(3) the relevant letters and telegrams with the exporters and a certifying document issued by the relevant commodity inspection agency in the case of a balance caused by any deterioration, rottenness, abnormal death or spoilage of the animal or fresh goods or, if no such certifying document can be provided due to any objective factor, a corresponding document certifying the quality of the goods and a guarantee letter;

(4) a certifying document issued by the commercial office of the Chinese embassy or consulate in the country of the exporter, in the case of a balance caused by a natural disaster, war, national emergency policy or any other force majeure;

(5) the relevant news reporting materials or a certifying document issued by the commercial office of the Chinese embassy or consulate in the country of the exporter or the relevant legal document, in the case of a balance caused by the bankruptcy, closure or dissolution of the exporter;

(6) the current exchange rate quotation of the paying bank, in the case of a balance caused by the exchange rate movement;

(7) a commodity inspection certificate, the bill of lading or shipping document, in the case of a balance caused by over or short shipment;

(8) the import contract, taxation certificate, freight insurance premium receipt and the relevant commercial documents (with the exception of the case where the amounts of the freight insurance premium and sundry fees are indicated in the declaration entry form), in the case of a balance caused by any incidental expenses such as freight insurance premium and sundry fees where such incidental expenses are included in the total price of the contract;

(9) the import contract, a certificate issued by the customs with regard to the declaration entry form, overdue tax payment certificate and the relevant commercial documents, in the case a balance taking place under the import of any mental ore in sand form or any other bulk cargo;

(10) the valid certificates as may be required by the foreign exchange bureau in the case of a balance caused by any other factor.

Article 8. When applying for the verification of a balance due to more delivered goods, the importer shall state the balance under the declaration entry form in the Outward Remittance by Import and Arrival Verification Form and indicate "reserved" or "cancelled" in the "notes" column.

To apply for the verification of an outward remittance balance by import under a single contract, which is more than the equivalent of US$5,000 and exceeds 2% of the contract price due to more delivered goods, the importer shall provide to the foreign exchange bureau a statement on the balance with its corporate seal being affixed on it.

Article 9. When handling the verification of an importer's balance due to more delivered goods, the foreign exchange bureau shall, in the China E-Port Outward Remittance System, treat as cancelled the original e-account of the importer's declaration entry form indicated as "cancelled".

Article 10. These Measures shall not, for the time being, apply to the automatic verification and cancellation of and outward remittance by import under a transaction in the form of remittance on delivery or to the verification of any outward remittance by import conducted against an exchange receipt voucher under any transit trade, use of materials for an external engineering project or any re-exchange bill by import.

Article 11. When handling the verification of an outward remittance balance by import, the foreign exchange bureau shall verify the relevant receipts and certificates in a strict manner, indicate the amount of the balance and the date and affix the stamp of "verified" on the Outward Remittance by Import and Arrival Verification Form and keep the relevant receipts and certificates.

Article 12. Each foreign exchange bureau shall, in the light of the regional conditions, set up and improve an internal control system of level authorization verification of outward remittance balances by import.

Article 13. Each of the SAFE's branches shall conduct information collection and statistics of the verification of balances taking place in its region and, within the first five working days of each month, submit to the SAFE an e-report on the verification of outward remittance balances by import.

Article 14. The power to interpret these Measures shall remain with the SAFE.

Article 15. These Measures shall come into force as of February 1, 2005. In case of any discrepancy in these Measures and any other provisions, these Measures shall prevail.