I. Notice on Payment of Foreign Exchange for Import Agents
Article 9 of the “Guidelines for Current Account Foreign Exchange Business (2020 Edition)” issued by the State Administration of Foreign Exchange stipulates that enterprises should handle trade foreign exchange receipts and payments in accordance with the principle of “whoever exports should receive foreign exchange, whoever imports should pay foreign exchange”, except where otherwise provided by foreign exchange laws and regulations.
In principle, the agent should pay for import agent business. Under the import agent business, the principal can transfer foreign exchange to the agent based on the agency agreement, or the agent can purchase foreign exchange.
II. Import Agent Contract
An import agent contract is usually a three-party agreement, which stipulates that specific goods should be imported from a designated exporter abroad. The three parties involved are:
(1) Importer (an enterprise with import and export rights and relevant product import registration qualifications, i.e., the entrusted party).
(2) End-user (the domestic final owner of goods, i.e., the entrusting party).
(3) Exporter (foreign exporter).
III. Import agent process
(I) Principal inquiries, trustee quotes
The client (principal) is preparing to import certain goods, but does not have the right to operate import and export. He wants to seek a qualified importer (trustee) as a trade agent to import goods.
The client understands the overall process and agency fees of the import agent.
If the supplier’s quotation is CFR quotation or CIF quotation, it is only necessary to provide the customer with the quotation of import customs clearance fees and import taxes (tariffs, value-added tax, etc.), as well as import agency fees, domestic related transportation fees, etc.
If the supplier’s quotation adopts the following trade terms, the following fees must still be reported to the customer:
FOB: You need to contact the freight company to provide a transportation quotation.
EXW: Including all transportation costs from the overseas factory to the port of shipment, international sea, land and air transportation, and domestic delivery to the customer’s designated location.
Make a quotation for the customer, so that the customer can figure out the relevant costs of import after the calculation is completed.
(II) Signing an import agent agreement
The client agrees to the import agent fee plan and requires the importer (the agent) to act as the trade agent, i.e. the buyer of the contract. The two parties sign the import agent agreement based on the information provided by the client.
(III) Fulfilling import agent
1. Order follow-up
(1) The import business department contacts the overseas supplier based on the contact information and quotation information provided by the client, and prepares to draft the import foreign trade contract (usually a three-party contract between the import agent, the overseas supplier and the client).
(2) Prepare the contract (the agent is the buyer), confirm all the terms of the import contract with the agent, negotiate with the overseas supplier within the scope of the agent’s authorization, and sign the import contract.
(3) Submit the invoices, packing lists, etc. sent by the overseas exporter to the finance department as documents for foreign exchange payment.
(4) Prepare the contract, invoice, packing list, declaration elements, and other qualification documents required for import as documents for customs clearance.
2. Payment
(1) The customer (the principal) deposits the payment and all fees into the account of the principal’s company.
(2) The company’s finance department arranges T/T or applies for L/C according to the import contract and the customer’s instructions.
3. International Logistics
The overseas exporter or consignor notifies that the goods are ready for shipment. The importer dispatches a ship to pick up the goods according to its shipping notice.
EXW: Contact the freight company’s agent or partner in the country (region) where the consignor is located to pick up the goods at the consignor’s designated location and arrange customs clearance at the overseas port of shipment.
FOB: The overseas consignor is responsible for shipping to the port of shipment and completing customs clearance. The principal only needs to contact the freight company to arrange international sea, land and air transportation.
4. Import customs clearance agent
(1) Collect the documents prepared by the documentary department, and complete tax payment, commodity inspection and other tasks after the goods arrive at the domestic destination port.
(2) Communicate with customers at any time to solve any problems arising during the customs clearance process.
5. Domestic Logistics
Contact the freight company to deliver the goods to the customer’s designated location according to the customer’s requirements, and the customer will inspect and accept the goods.
6. Financial Bills
Provide customers with all invoices and tax bills for import agency, and issue invoices for import agency business fees.