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	CIRCULAR OF STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING VERIFICATION OF THE FOREIGN EXCHANGE COLLECTION FOR EXPORT AND FOREIGN EXCHANGE ACCOUNTS ADMINISTRATION ADJUSTMENT

	(No. 184 [2001] of State Administration of Foreign Exchange promulgated on November 8, 2001, which shall come into force as of December 1, 2001)


SUBJECT : FOREIGN EXCHANGE COLLECTION FOR EXPORT VERIFICATION
ISSUING DEPARTMENT : STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 11/08/2001
IMPLEMENT DATE : 12/01/2001
LENGTH : 601 words
TEXT :

In order to be compatible with forthcoming entry into WTO, accelerate and support export, enhance international competitiveness of the enterprise, and further perfect the foreign exchange administration of current accounts, the State Administration of Foreign Exchange has decided to adjust relevant policies concerning the verification of export collection in foreign exchange and foreign exchange accounts as of December 1, 2001. Relevant issues are circulated as follows:

I. To relax requirements to Chinese-funded enterprises for opening foreign exchange current account. More foreign exchange receipts shall be kept in accounts.

Chinese-funded enterprises meeting such requirements as: annual export collection exceeding US$2,000,000 equivalent; annual foreign exchange expenditures exceeding USD200, 000 equivalent; having export and import rights; sound financial situation; and not violating foreign exchange regulations, are qualified for opening a foreign exchange account. The balance ceiling of the Chinese-funded enterprise's current account shall be prescribed by the subsidiary of the State Administration of Foreign Exchange (SAFE). The ceiling shall be 25% of the smaller one between the sum total of export collections and of foreign exchange expenditures of the enterprise in the previous year. The balance ceiling of Chinese-funded enterprise' newly opened foreign exchange current account shall be prescribed according to new standard. Existing foreign exchange current accounts can still be used. Their balance ceilings shall be re-calculated according to new standard before the end of 2002.

II. To abolish the requirement of handing in verification certificate to SAFE before export collection. The enterprise is allowed to go through the formalities of verification of export collection on a monthly basis.

After declaring export to the customs, the enterprise may make an on-line delivery through Electronic System for Executing Laws at Ports. They don't need to go to SAFE in person to hand in the counterfoil of the verification certificate of export collection in foreign exchange (hereinafter as "verification certificate"). After export collection, the enterprise may go to SAFE to go through the formalities of verification by presenting prescribed certificates such as paper-made verification certificate, customs declaration form, invoice, and special copy for the verification of export collection.

III. To abolish the limit on the period of validity of the verification certificate, and issue more verification certificates.

The validity of verification certificates with electronic data registered on the Electronic System for Executing Laws at Ports will be permanent instead of two months. "Honorable enterprises in export collection" and "ordinary enterprises in export collection" assessed in the latest examination may acquire verification certificates based on actual demand by presenting export contract.

IV. To adopt the system of balance verification.

The balance of export collection refers to the difference of foreign exchange receivable and actual collection. Balance verification refers to verification of export collection in accordance with the balance of export collection upon valid certificates provided by the enterprise. SAFE at each level shall approve the balance verification according to its jurisdiction authorized by the upper level.

In case that the enterprise fails to provide prescribed certificates needed for normal balance verification due to objective reasons; besides, the enterprise is assessed as "honorable enterprise in export collection" or "ordinary enterprises in export collection" in the latest examination, if the representative of the legal body provides written guarantee to assure law-abiding and promise to shoulder related legal responsibility, SAFE may adopt a more relaxed recording-for-examination system for its balance verification.

V. This circular shall take into effect as of December 1, 2001. In case of any contradiction with rules issued prior to this circular, the latter shall prevail.

ATTACHMENTS:
1. Foreign Exchange Accounts of Chinese-funded Enterprises Administration Measures (omitted)
2. Foreign Exchange Collection for Export Verification Regulation (omitted)