China Law Online Database : novexcn.com

You are using Guest Account

Subscribe To This Law Only

Subscribe To All Law Contents

Print This Page

Back




	CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING THE ADMINISTRATION OF VERIFICATION AND WRITING-OFF THE COLLECTION OF FOREIGN EXCHANGE IN INTERNATIONAL FACTORING AGENTS

	(No. 79 [2003] of the State Administration of Foreign Exchange promulgated on and implemented as of July 1, 2003)


SUBJECT : INTERNATIONAL FACTORING AGENTS
ISSUING DEPARTMENT : STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 07/01/2003
IMPLEMENT DATE : 07/01/2003
LENGTH : 1,096 words
TEXT :

In order to regulate the business operation of the cancellation of foreign exchange collection under the item of confirming agent for export after verification, support the foreign trade development, and encourage the new business developed by the bank, we hereby make the following Circular on relevant issues concerning the administration of the cancellation of foreign exchange collection under the item of confirming agent for export after verification,

I. "International Factoring Agent " (hereinafter referred to "IFA") provided in this Circular refers to the business provided by the designated forex bank (confirming agent for export) to the export entity (exporter) for its short-term credit sale, which includes at least two comprehensive balances or financing services such as the administration of accounts receivable and the credit risk control, the income account service and the full protection against the bad accounts, or trade financing.

II. Where the confirming agent for export doesn't provide to the exporter financing services or the financing services with the right of recourse under the item of confirming agent for export, it should handle the formality of the settlement of exchange or of entering the item in an account for the exporter prescribed after collecting the overseas payment for the goods of export, and issue the page specifically used for the collecting, verifying and writing off export proceeds in foreign exchange to the exporter.

III. Where the confirming agent for export provides to the exporter financing services without the right of recourse under the item of confirming agent for export, it may issue the page specifically used for the collecting, verifying and writing off export proceeds in foreign exchange to the exporter on the basis of the amount of financing money after providing the financing money to the exporter and handling the formality of the settlement of exchange or of entering the item in an account for him prescribed, and then compile the special number for collecting, verifying and writing off proceeds in foreign exchange in the page (For the specific compiling rule, see the Circular of the State Administration of Foreign Exchange on Relevant Issues concerning "the Page Specifically Used for Collecting, Verifying and Writing off Export Proceeds in Foreign Exchange" No.11[2003] of the State Administration of Foreign Exchange), meanwhile, note the term of "export financing for the confirming agent" in the page.

After collecting the payment for the export of goods for the exporter, the export confirming agent should deduct the financing money and its interests, issue the page specifically used for collecting, verifying and writing off the foreign exchange of the balance, and give clear indication of the "the balance for export confirming agent", the related expenses and interests of the financing under the item of confirming agent, and the number of declaration form for the overseas income and the particularized number used in the original bill for collecting, verifying and writing off export proceeds in foreign exchange.

After collecting the money for the exporter from abroad, the export confirming agent and the exporter shall make a statistical statement of international revenue and expenditure according to Article 28 of the Operational Rules for the Declaration of Statistical Statements of International Revenue and Expenditure Through Financial Institutions and other relevant provisions.

IV. Under the item of export confirming agent, the exporter shall, according to the Administration Measures for Collecting, Verifying and Writing Off the Export Proceeds in Foreign Exchange and its detailed rules, and other relevant provisions, handle, within the prescribed time limit, the formality of collecting, verifying and writing off the export proceeds in foreign exchange at the competent branches of the State Administration of Foreign Exchange (hereinafter referred to "competent administration of foreign exchange") by presenting the contract for export confirming agent and the verifying and writing off instrument.

In case the balance between the sum of foreign exchange collected and the total prices agreed upon listed in the customs declaration of the goods exported exceeds 500 dollars (500 dollars included), the competent administration of foreign exchange may handle the balance on the basis of the contract for export confirming agent and the expenses recorded in the special verifying and writing-off instrument for collecting the export proceeds in foreign exchange, and issue to the exporter the special drawback page of the verifying and writing-off instrument for collecting the export proceeds in foreign exchange according to relevant provisions.

V. Where the export confirming agent provides to the exporter the financing services without the right of recourse, and if any trade dispute arises between the importer and the exporter which causes the inability of the export confirming agent to collect the foreign exchange overseas, it shall inform the exporter when the payment is detained. The exporter shall, within 10 working days after receiving the notice, provide to the export confirming agent the certification of collecting, verifying and writing-off the export proceeds in foreign exchange that has been offset. In case no such certificate is provided by the exporter in time, the export confirming agent shall report at once in written form to the competent administration of foreign exchange, and shall not issue any more of the special page of verifying and writing-off instrument for the enterprise under the item of export confirming agent.

VI. The export confirming agent shall offset any loss that arises from providing financing services or from the business operation of the export confirming agent under the item of export confirming agent, using its own foreign exchange capital or working capital, and shall not offset the loss by means of buying the foreign exchange on its own initiative or through the capital settlement of the exchange of the clients.

In case the export confirming agent is short of foreign exchange capital or foreign exchange working capital, it may apply to the competent administration of foreign exchange for buying the foreign exchange to offset the deficient amount.

VII. The export confirming agent shall establish ledgers and record down the business operation items of export confirming agent that have been handled completely, for the future check of competent administrations of foreign exchange.

VIII. This Circular will be effective from the date of promulgation.

After receiving the Circular, all the competent administrations of foreign exchange shall transmit it as soon as possible to their subordinate branch departments and the designated forex banks (including the foreign-funded bank); the Chinese-invested designated forex banks shall transmit it to their subordinate branch bank and subdivision. In case any problem is met in the implementation of the present Circular, please send your feedback immediately to the Administrative Department of Current Account of the State Administration of Foreign Exchange.