With the Foreign Exchange Administration upgrading its monitoring of the authenticity of trade backgrounds,the traditional "agency" model is facing increasing scrutiny.The grey operation of "non-payment of foreign exchange" is exposing risks — in 2023 foreign exchange violations,37% involved mismatched flows of goods and funds,with non-payment of foreign exchange accounting for 21% of these cases.Enterprises urgently need compliant operational pathways.

Not paying foreign exchange settlements ≠ lack of supervision: the underlying logic and risk matrix

The core conflict of non-payment of foreign exchange in import and export agency business lies in the "compliant matching of capital flow and goods flow".According to the "Regulations on Foreign Exchange Administration",even if there is no foreign exchange receipt and payment involved,the authenticity of the transaction still needs to meet the "Three Flows Consistent" (goods flow,document flow,and information flow).The following is a comparison of common misunderstandings and correct operations:

In addition,the General Administration of Customs has become stricter in supervising scenarios such as "non-compensation for damages" and "import and export of samples",requiring enterprises to provide relevant materials.Trade background certification documents(e.g.sample agreement,donation proof),otherwise it will be identified as "fictitious trade."

5-Step SOP for Compliance and Non-Payment of Foreign Exchange: A Closed-Loop Process from Contract to Write-Off

Step 1: Contract design and principal identification

Output:

• Inthe"CommissionedAgencyImportandExportAgreement",clearlydefinethe"non-paymentofforeignexchange"clauseandspecifythenatureofthetransaction(suchassamples,donations,ordomesticsalesreplenishmentorders);
• Itisrequiredthattheconsignor(theactualownerofthegoods)andtheconsigneebethesameentity,toavoidthird-partyholdingofthegoodsonbehalfofothers.
• Agreeonthedeliverymethodofthe"titletransfercertificate"(suchasareceipt,logisticsreceipt,etc.).

Step 2: Document management and logical verification

Output:

• Preparea"BackgroundNoteonNon-PaymentTrade",whichincludesthereasonsforthetransaction,theflowofgoods,andthevaluecomposition;
• Matchingdocuments:Forexample,fortheimportandexportofsamples,asampleagreementandarecipient’sreceiptcertificatearerequired;forfreecompensation,theoriginalcustomsdeclarationformandacertificateofqualityissuesareneeded;
• RetentionElectronicinvoice(e.g.emailcommunicationrecords,logisticswaybills)asauxiliaryevidence.

Step 3: Separation of Fund Flows and Compliance Reporting

Output:

• UseTheclient’spublicaccountPaydomesticexpenses(suchaslogisticsandcustomsdeclarationfees)toavoidinvolvingpersonalaccountsintheprocess.
• Select"EXW"(ExWorks)or"FCA"(FreeCarrier)inthe"TransactionTerms"columnofthecustomsdeclarationformtoweakenthe"ForexPayable"logic;
• Declare"specialtransactions"(suchas9900-Other)intheforeignexchangemonitoringsystemanduploadabackgroundexplanation.

Step 4: Customs and tax authorities work together to handle the operation

Output:

• Applytothecustomsinadvanceforthe"Non-paymentofForeignExchangeRegistration"(iftheimportedorexportedsamplesneedtobeclassifiedas"SamplesandAdvertisingGoodsA",withthecode3010);
• Ifitinvolvesexporttaxrebates,itisnecessarytomark"Notaxrebate"inthetaxrebatesystem(toavoidconflictswithforeignexchangereceiptsandpayments);
• Theretentionoftaxregistrationreceipts(suchasthe"PowerofAttorneyforExport")shallbeusedasproofofcompliance.

Step 5: Review the risks and file the documents

Output:

• Verifythenon-remittanceoffundseveryquarterDocumentChainIntegrity,focusingoncheckingthelogicalconsistencyof"Reason-Document-Declaration";
• Classifyandfilealldocumentsby"year+transactiontype",andkeepthemfornolessthan5years.
• Regularlysimulate"foreignexchange/customsinspection"scenarioseverysixmonthstoverifytheabilitytodefendagainstevidencechains.

Invisible Minefield: The Interconnected Risks of Taxation and Foreign Exchange

Many enterprises ignore the linkage between "VAT filing" and "Forex receipt/payment":

• Iftheexportedgoodsaredeclaredas"duty-free"butareactuallyreplenishmentordersfordomesticsales,itiseasytotriggerpenalties."AbnormalitiesintheTax-Free,Deferral,andRefundSystem"Warning;
• Ifanenterprisefailstomakeforeignexchangepaymentsforimportedgoodsbutdeductstheinputtax,itmaybedeemedtohavecommitted"fraudulenttaxdeduction".
• Itisrecommendedtoworkwithataxconsultanttonote"non-remittancetransactions"whenfilingthe"Value-AddedTaxDeclaration"toavoiddataconflicts.

There are three verification actions that can be carried out today.

• Checktheexistingnon-paymentcontracts:Arethetransactionnatureandtheprovisionsonthetransferofownershipofthegoodsclearlydefined?
• Reviewdocumentsofthelastyear:isthereadisconnectionintheentitiesofgoodsflow,documentflow,andfundflow?
• Logintothe"ForeignExchangeMonitoringSystem"andcheckwhetherthereareany"pendingverification"itemsinthehistoricaldeclarationrecords.