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Is it necessary to make foreign exchange payments when importing goods through an agent? Can we avoid making such payments?
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We are a newly established import and export company.Company, a client has entrusted us to import a batch of equipment, but they want to settle the payment in RMB within China instead of using foreign exchange. May I ask if it's necessary to make a foreign exchange payment when acting as an import agent? If we don't make the payment, will the customs clearance be approved? What potential risks might arise in this case?
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
From the perspectives of foreign exchange management and customs supervision，agents importing goods are generally required to make foreign exchange payments. According to the "Regulations on Foreign Exchange Management" and customs declaration norms，the "transaction method" and "payment method" on the import declaration form must match the foreign exchange payment records. Failure to make foreign exchange payments will lead to the following compliance risks。
1. During customs clearance，the system will automatically compare the data with those from the foreign exchange bureau. If there are no payment records，manual verification will be triggered，delaying customs clearance。
2. In subsequent tax audits，imports that cannot provide proof of payment may be deemed illegal，affecting VAT deductions。
3. If identified as false trade，penalties or even criminal liabilities may be imposed。
Exceptions are limited to special regulatory methods such as bonded goods and temporary import/export，but these must be pre-registered and cannot be used for domestic sales. It is recommended to strictly adhere to the principle of "integration of goods flow，capital flow，and document flow".
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
In practice, failing to make foreign exchange payments is almost impossible. The customs system and the foreign exchange bureau system are connected in real time. If you declare foreign exchange payments during customs declaration but fail to actually make the payments, this will result in abnormalities in the electronic ledger and prevent the goods from being released. Even if you manage to clear customs successfully, the subsequent impacts will be even more severe:
1) You will be unable to apply for export tax rebates, as the tax bureau requires bank payment receipts;
2) If customs detects the issue during subsequent inspections, you will be required to make up for the tax payments and pay late penalties;
3) The enterprise will be listed as a Category B or Category C enterprise by the foreign exchange bureau, which will restrict all future import and export operations.
If the client insists on settling transactions in RMB within China, the only compliant approach is to apply for a "delivery within China" processing trade manual. However, this requires that the goods must be re-exported and cannot be sold domestically. Otherwise, you need to convince the client to make normal foreign exchange payments. You can reduce their concerns by locking in exchange rates, adjusting quotations, and other methods.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
The client wants to avoid making foreign exchange payments, essentially to evade exchange rate risks or simplify procedures. However, doing so will shift all legal and tax risks to you. Directly refusing will damage the relationship, but blindly agreeing could plunge your company into crisis. Here’s how to communicate:
1. First, clarify that "according to current foreign exchange management policies, import payments are mandatory. Otherwise, customs will not release the goods, and your company will fail to obtain compliant import certificates."
2. Offer solutions, such as "we can assist with forward foreign exchange transactions to lock in exchange rate costs, or directly include exchange rate risk premiums in our quotes."
3. Emphasize the value of compliance: "After making payments, your company will receive complete import VAT invoices and customs declaration documents, which are essential for product warranties, after-sales services, and future financing."
Remember: The value of professional agents lies in helping clients avoid risks, not taking unnecessary risks together. If the client insists, it’s better to abandon such business altogether.