On June 27, 2012, the State Administration of Foreign Exchange issued (i) the Guidelines for Foreign Exchange Control on Trading of Goods, (ii) the Detailed Implementing Rules of the Guidelines for Foreign Exchange Control on Trading of Goods, (iii) the Operational Procedures of the Guidelines for Foreign Exchange Control on Trading of Goods (bank and enterprise version) and (iv) the Provisions for Information Declaration Administration on Receipt and Payment of Foreign Exchange from the Trading of Goods with the stated intention of implementing nationwide reform in the foreign exchange control system for trading of goods. This set of regulations will come into effect on August 1, 2012. Under the system, trading enterprises are required to register with the relevant foreign exchange administration after obtaining foreign trading rights. A list of registered enterprises will be circulated to financial institutions and a financial institution may not handle trading related foreign exchange receipt and payment for enterprises not covered in the list. Foreign exchange administrations will conduct regular or irregular inspections on the import/export data and foreign exchange receipt/payment figures of trading enterprises in a certain period and conduct on-site supervision and examination on enterprises with “unusual or suspicious” circumstances. Based on an enterprise’s compliance with the relevant foreign exchange provisions and the results of the foreign exchange administrations’ inspection or on-site examination, trading enterprises will be classified as an ‘A,’ ‘B’ or ‘C’ enterprise. ‘A’ grade enterprises may benefit from simplified foreign exchange control procedures. The system was under a trial use in seven places since December 1, 2011.

The full Chinese text of the notice is available here.