The State Administration of Foreign Exchange (SAFE) issued the Supplementary Circular on Issues Relating to Improving Business Operations with Respect to the Administration over Payment and Settlement of Foreign Exchange Capital of Foreign-invested Enterprises (Huizongfa [2011] No. 88, “Supplementary Circular”) on July 18, 2011, which came into effect on August 1, 2011. Our previous posting on the content of the Supplementary Circular can be found here.

On July 29, 2011, the Shanghai branch of SAFE issued a Circular (“Shanghai Circular”) requiring designated foreign exchange banks to comply with the Supplementary Circular.  However, for small-amount invoices under RMB2000, the Shanghai Circular provides that an enterprise applying for foreign exchange capital settlement only need to submit written documents guaranteeing the authenticity of the small-amount invoices, signed by the legal representative and stamped with the official seal of the enterprise. This requirement replaces the Supplementary Circular’s requirement to provide print-out copies of results of the tax department’s internet invoice authenticity inquiry system stamped with the official or financial seal of the enterprise.

The same requirements apply in Hangzhou, Suzhou and Ningbo.