New Rules Regarding Cross-border Goods Trading Published by SAFE
July 16th, 2012
On 27th June, 2012, the State Administration of Foreign Exchange (SAFE), jointly with the General Administration of Custom and the State Administration of Taxation, issued a Circular on Reforming the Foreign Exchange Control Regime for Goods Trading.
1. How will the Circular effect the cross-border goods trading?
A. It is no longer necessary to write off the receipt or payment of foreign exchange against each import or export of goods. Instead, SAFE will monitor the import/export of goods and the associated receipt/payment of funds by reviewing the statistics filed on a unified electronic platform.
B. Enterprises will be divided into three categories: A, B and C. Category A enterprises will enjoy preferential treatment for their payment or receipt of foreign exchange. Category A enterprises may instruct their banks to pay foreign exchange directly, as long as they can provide a document or bill to prove a genuine underlying trade. Category B and C enterprises are subject to closer and tighter controls by banks and SAFE.
C. The write-off paper will no longer be required or issued when filing the export with the customs authority or claiming tax refunds with the taxation.