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Higher Efficiency in Chongqing's Financial Foreign Exchange Services

By RAN ZHENGICHONGQING|May 21,2022

By the end of April 2022, the scale of pilot business in Southwest China’s Chongqing Municipality had reached 5.36 billion U.S. dollars, according to local authorities on May 16. 

According to the Chongqing Foreign Exchange Management Department of the State Administration of Foreign Exchange, Chongqing has implemented a foreign exchange receipts and payments facilitation pilot program for nearly two years. This pilot program has improved Chongqing’s financial foreign exchange services and helped the development of foreign trade enterprises.

by the end of April 2022, the scale of pilot business in the city had reached 5.36 billion U.S. dollars

By the end of April 2022, the scale of the foreign exchange receipts and payments facilitation pilot program in Chongqing had reached 5.36 billion U.S. dollars. (iChongqing/Zheng Ran)

The pilot program launched in July 2020 gives prudent and compliant banks and enterprises with stable operation and good credit more autonomy in foreign exchange receipts and trade payments. The pilot bank should be registered in Chongqing as a commercial bank branch or head office of a local commercial bank. The pilot enterprise should continue to handle foreign exchange receipts and payment of trade in the pilot bank for more than three years, which needs to have the real demand of the pilot business.

The first measure was to optimize the document review process. For example, pilot banks will handle foreign exchange receipts and payments for trade in goods/services for pilot companies. Banks should require companies to provide relevant documents for businesses with unclear funds.

Besides, special foreign exchange refunds, such as overdue trade in goods, are exempt from prior registration. A single rebate of USD 50,000 (exclusive) or more can be processed directly at the bank if the interval between the original receipt date and the payment date is more than 180 days (exclusive).

Furthermore, when enterprises pay foreign exchange for goods, they can be exempt from import declaration forms’ verification procedures.

According to an official at the Chongqing Foreign Exchange Management Department, the pilot has improved cross-border settlement efficiency and saved enterprises costs. Before participating in the pilot program, a Chongqing electronic manufacturing company needs to provide the bank with paper contracts, invoices, and customs declarations one by one. It usually takes 2-3 days to complete the process. After participating in the pilot program, the company only needs to provide the Overseas Remittance Advice. There’s no need for the bank to review the documents and verify the customs declaration. It will take less than 1 hour to complete the application. As a result, the pilot program has dramatically improved the timeliness and convenience of the company’s foreign exchange payment and enhanced the company’s competitiveness.

Next, Chongqing will support more compliant market entities to participate in the pilot to create a circle of “the more honest, the more convenient.”

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