Specific Provisions on Foreign Exchange Settlement, Sales and Payment

1. Exchange settlement and sale business

According to the "Regulations on the Settlement, Sale, and Payment of Foreign Exchange" and the "Measures for the Management of Foreign Exchange Settlement under Current Account", foreign exchange income from current account items of domestic institutions shall be settled at designated foreign exchange banks, except where retention is approved.

The main businesses requiring the foreign exchange authority to verify the authenticity of receipts are: settlement of foreign exchange from non-trade and unilateral transfers and other current account items (excluding "settlement-trusted enterprises") exceeding the equivalent of USD 200,000 (excluding USD 200,000), including project contracting receipts, tourism receipts, donation receipts, technical service and consulting service receipts, freight receipts, and other receipts.

According to the "Regulations on the Settlement, Sale, and Payment of Foreign Exchange" and the "Interim Measures for the Examination of Foreign Exchange Payments for Exceeding Proportion or Amount Advance Payments, Commissions, and Consignment Trade with Prior Payment and Subsequent Receipt", domestic institutions making external payments under current account Items may purchase foreign exchange from or pay from their foreign exchange accounts at designated foreign exchange banks after providing valid certificates required by regulations and undergoing authenticity verification. The main businesses requiring the foreign exchange authority to verify the authenticity of forex sales include:

1. Advance payments under imports exceeding 15% of total contract value and exceeding the equivalent of USD 100,000;

2. Commission payments under exports where hidden commissions exceed 2% of total contract value or open commissions exceed 5% of total contract value, and exceed the equivalent of USD 10,000;

3. Foreign exchange payments for consignment trade with prior payment and subsequent receipt;

4. Withdrawal of foreign currency cash exceeding the equivalent of USD 10,000 by domestic institutions at a single time;

5. Various special forex sales etcetera;

2. Basic requirements for audit review materials of sale and payment of foreign exchange

1. Applications must be in the form of an official letter and bear the official seal of the unit. The application should be concise in wording, complete in content, clearly explain main matters, and match the provided documents.

2. When coming to the foreign exchange authority for review each time, original contracts (agreements) and other original and copies of relevant documents must be brought. If the original contract (agreement) cannot be provided under special circumstances, a written explanation must be made in the form of an official letter. Our bureau only retains copies after review, returning the originals to the enterprise when it picks up the review documents.

3. As the "credit advice" sent by various designated foreign exchange banks to enterprises is not identical, the bank credit advice must bear the seal of the relevant bank.

4. For projects requiring multiple approvals under the same contract, a registration form printed by our bureau must be filled in when coming to our bureau for the first review, to facilitate filing and archiving.

5. If the above requirements are not met, the submission will be uniformly returned without review.

3. Materials required for processing daily reviews:

(1) Documents required for settlement review items

1. Construction project settlement receipts: handle review with successful bid contract, invoice, and remittance slip;

2. Tourism settlement receipts: handle review with quotation, contract (agreement), remittance confirmation, invoice, and remittance slip;

3. Donation settlement receipts: handle review with agreement, remittance confirmation, invoice, and remittance slip;

4. Technical service and consulting service settlement receipts: handle review with contract (agreement), remittance confirmation, invoice, and remittance slip;

5. Freight settlement receipts: handle review with contract or bill of lading, remittance confirmation, invoice, and remittance slip;

(2) Documents required for forex sale review items

1. Exceeding-proportion or exceeding-amount advance payments under imports: handle approval with import contract, letter of guarantee from the counterparty's bank, bank remittance certificate, Forex Sale Notice from SAFE (State Administration of Foreign Exchange), and proforma invoice;

2. Exceeding-proportion or exceeding-amount commissions under exports: handle approval with original export contract, exchange settlement advice, commission agreement, proforma invoice, bank remittance certificate, and Forex Sale Notice from SAFE;

3. Foreign exchange payments for consignment trade with prior payment and subsequent receipt: handle review with original import and export contracts;

4. Withdrawal of foreign currency cash exceeding the equivalent of USD 10,000 by domestic institutions at a single time: handle review with proof of overseas trip and budget letter;

5. Various special forex sales: provide corresponding documents.