Verification of import payments and export proceeds (VIEP)

In order to standardize banking procedures and to prevent speculation and other illegal activities, a verification system for import payments and export proceeds was implemented. The VIEP system is an important means of retrospective supervision aimed at ensuring safe receipt of foreign exchange and preventing foreign exchange from draining away through illegal channels.

The verification of export proceeds took effect on 1 January 1991 and the verification of import payments on 1 August 1994. The verification of export proceeds requires that all export earnings in foreign exchange should be verified by SAFE within a stated period after the declaration of goods.

Verification of import payments requires SAFE to verify foreign exchange payments in the stated period after goods are delivered. The verification certificate of import payment in foreign exchange shall be completed by the importer and acts as proof document for the designated bank to make import payments in foreign exchange. The timing of verification varies according to the different terms of settlement . In the case of payment upon delivery, verification is made when the designated foreign exchange bank makes payment against the original customs declaration form. For other settlements, the importer shall apply to SAFE for verification by presenting the verification certificate, record form and original customs declaration forms (receipts verifying foreign exchange derived from entrepot trade surrendered in case of payment for entrepot trade)

The VIEP system is an important tool in supervising the inflow and outflow of foreign exchange through imports and exports, preventing illegal capital movements and the outflow of foreign exchange, as well as providing regular supervision of foreign exchange transactions on current account. Since 1 May 1999, regulation of the examination of receipts in foreign exchange has been implemented as a method to reward genuine and punish illegal exporters. The ratios of filed foreign exchange proceeds to submitted verification forms of export transactions are the main items under examination. Exporters are classified into groups according to examination results and are judged to deserve reward or punishment accordingly , as an incentive to promote exports and encourage export companies to collect export earnings fully in foreign exchange in a timely manner.

On 1 January 1999, a checking system for import and export declarations was put into operation through the SAFE network, the customs and the banks. The verification of import and export declarations may be effected through the online network checking system which makes the work much easier and more efficient, as well as more convenient for companies.