Measures tightened to control outward remittances from China

Measures tightened to control outward remittances from China

Overview

Recently, China’s State Administration of Foreign Exchange (SAFE) has tightened up measures to control outward overseas remittances with a view to curbing Chinese capital outflows.

The measures include:

  • raising the limit for personal outward remittance and
  • double checking the authenticity of each payment transaction.

Unfortunately, the shipping industry has inevitably been a victim. Particularly for those who intend to remit foreign currency (freight, hire, commission, demurrage) out of China. In that the measures are likely to prolong the process for company outward remittances.

In practice, many foreign shipping entities take advantage of their overseas offices to avert the problem, by handling all foreign exchange remittance. This is largely to avoid Chinese foreign exchange control, as well as other administrative difficulties. Under such circumstances, their Chinese offices purely act as an agent.

The increased measures may also trigger a tax withholding issue when remitting funds out of China. This depends on many factors and whether they are relevant to China, such as cargo, payer, loading port and so on. In theory, the payer is obliged to withhold such tax within China, according to the most common Chinese tax regulation. However, this practice varies from city to city and we recommend members carefully check with the local Chinese tax authority whether, and if so, which tax scheme may apply to that particular business.


Wei Zhuang
in Shanghai, CN

Coronavirus

Access BIMCO's COVID-19 related articles and advice.

Read more

VPS Bunker Alerts

Veritas Petroleum Services (VPS) publish regular Bunker Alerts based entirely on fuel samples and have kindly permitted BIMCO’s Members to access this information.

The Bunker Alerts are not intended to be an evaluation of overall bunker quality in the port or area concerned, but usually highlight a specific parameter within the fuel which has raised a quality issue.

Latest ice condition reports

Latest ice reports for the Baltic Sea Region and Canada for members.

Latest piracy reports

Latest industry releasable threats

 
 

ELSEWHERE ON BIMCO

Contracts & Clauses

All of BIMCO's most widely used contracts and clauses as well as advice on managing charters and business partners.

Learn about your cargo

For general guidance and information on cargo-related queries.

More about cargo

BIMCO Publications

Want to buy or download a BIMCO publication? Use the link to get access to the ballast water management guide, the ship master’s security manual and many other publications.

About a new business partner

We can help members check new business partners. We also help to recover millions of USD (undisputed) funds every year.