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	CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON FURTHER SIMPLIFYING THE FORMALITIES FOR VERIFICATION AND WRITE-OFF OF EXPORT PROCEEDS IN FOREIGN EXCHANGE

	(No. 73 [2005] of the State Administration of Foreign Exchange, October 14, 2005)


SUBJECT : FOREIGN EXCHANGE; VERIFICATION AND WRITE-OFF; EXPORT PROCEEDS
ISSUING DEPARTMENT : THE STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 10/14/2005
IMPLEMENT DATE : 11/01/2005
LENGTH : 1,017 words
TEXT :

In order to further improve the administration of the foreign exchange under current accounts and promote the facilitation for trade, the State Administration of Foreign Exchange has decided to further simplify the formalities for verification and write-off of export proceeds in foreign exchange. We hereby notify the relevant matters as follows:

1. When an export entity makes a report on the verification and write-off of export proceeds in foreign exchange, if it adopts such means as "barter trade", "compensatory trade", "leasing trade", "less-than-one-year leasing" or "external contracting" for export, the requirements on submission of the relevant certificates to the State Administration of Foreign Exchange such as the relevant contracts of barter trade, compensatory trade and leasing or agreements or contracts of project contracting as well as the documents of verification on external contracting as produced by the administrative department of commerce shall be abolished. An export entity shall handle the formalities for verification and write-off upon the strength of such materials as the export declaration form, verification form, exclusive pages of the verification form or the corresponding import declaration form.

2. Where an export entity that has adopted the means of "corresponding imported materials", "deep processing of imported materials" or "processing of imported materials by three types of foreign-funded enterprises" for export needs to go through any verification and write-off for the deduction of imported materials, the requirements on an export entity's reporting it to the State Administration of Foreign Exchange for archival filing as well as examination and approval beforehand shall be abolished. An export entity shall handle the formalities for verification and write-off upon the strength of such materials as the contracts of processing trade (to be provided at the first time of verification and write-off for deduction), export declaration form, verification form, the exclusive pages of the verification form for balance as well as the corresponding import declaration form.

3. Where an export entity that adopts the means of "samples and advertisement products A" for export goes through any verification and write-off for the export proceeds in foreign exchange generated from the samples and advertisement products A of a equivalent value of US$500 in a single deal, which hasn't been collected, the requirement of providing the contracts as concluded by both trading parties shall be abolished. The State Administration of Foreign Exchange shall directly handle the verification and write-off for it as for non-collected balance in foreign exchange.

4. Where an export entity that has handled the foreign exchange collection on export as declared under the item of international balance applies for making up the exclusive page of the verification form due to such reasons as any loss or damage, it may not be subject to the examination and approval of the State Administration of Foreign Exchange any more or have to handle the relevant formalities on the strength of the documents of verification produced by the State Administration of Foreign Exchange. An export entity may directly go to the original issuing bank to make up the formalities for verification and write-off of the exclusive pages upon the strength of the relevant materials such as a written report and the declaration form of foreign-related income.

5. The scope for the verification and write-off of foreign exchange balance on export shall be adjusted. For the amount of collected foreign exchange or import value that exceeds the declared value by no more than an equivalent value of US$5,000 (including US$5,000), which is indicated on a verification form for a single dealing, or for the amount of collected foreign exchange or import value that is below the declared value by no more than an equivalent value of US$5,000 (including US$5,000), which is indicated on a verification form for a single dealing, the export entity may directly handle the formalities for verification and write-off upon the strength of the relevant certificates of verification as prescribed in Articles 38 and 39 of the Detailed Rules for Implementing the Verification and Write-off of Export Proceeds in Foreign Exchange (Order No. 107 [2003] of the State Administration of Foreign Exchange). For the export beyond the above scopes, the reporting formalities for the verification and write-off of foreign exchange balance shall be handled. In the case of any verification by batches, the balance between export and collected foreign exchange or import may be calculated in light of an average balance of all dealings as indicated on the verification form.

6. In the case of any inconsistency between an entity collecting foreign exchange and an entity assuming verification and write-off due to any exclusive sale of goods, alteration of any contract term or approved relationship between any parent company and branch (subsidiary company), where an entity collecting foreign exchange applies for handling the "transfer of foreign exchange collected from abroad", the provisions on providing the export declaration form or verification form shall be abolished. An entity collecting foreign exchange may handle the formalities for transfer on the strength of the relevant materials such as an application for transfer of collected foreign exchange, relevant agreements, a photocopy of the export contract as well as the exclusive pages of the verification form.

7. The present Circular shall not apply to an enterprise of any special economic zone under close customs surveillance such as bonded zones and export processing zones.

8. The present Circular shall come into force as of November 1, 2005. Where any previous provision, if any, has any conflict with the present Circular, the present Circular shall prevail.

All the branches of the State Administration of Foreign Exchange shall, after receiving the present Circular, transfer it to the central sub-braches, foreign-funded banks as well as the relevant entities as soon as possible. All the designated Chinese-funded foreign exchange banks shall, after receiving the present Circular, transfer it to the branches and sub-braches within the jurisdiction as soon as possible. In the case of any problem arising from the implementation of the present Circular, please report it to the administrative department of current accounts of the State Administration of Foreign Exchange in a timely manner.