Who should be responsible for making foreign exchange payments in the agency import and export business?
Solved#Other issues#
Our company intends to engage an agent to handle import and export business. Currently, we are not very clear about the part of foreign exchange payment. We would like to know in the process of agency import and export, whether it is the principal or the agent who should make the foreign exchange payment? Are there any regulations or special circumstances that need to be noted? We hope that friends who are knowledgeable in this area can give a detailed explanation. Thank you.
Professional consultant answers
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
In the agency import and export business, the determination of the subject of foreign exchange payment generally follows the principle of "whoever imports shall make the payment, whoever exports shall receive the payment". Usually, if the agent signs the import and export contract in its own name, then the agent is the subject of foreign exchange payment, and the agent shall pay the purchase price to the overseas supplier. However, if the agent signs the contract in the name of the principal and the operating unit on the customs declaration form is the principal, then the principal is generally the subject of foreign exchange payment.
It should be noted that regardless of who makes the foreign exchange payment, it must comply with the regulations of the national foreign exchange administration. For example, it is necessary to provide real and legal trade background materials, including contracts, invoices, customs declaration forms, etc., to ensure the compliance of the flow of foreign exchange funds. Meanwhile, before the actual operation, the principal and the agent should clearly define the responsibility of foreign exchange payment in the agency agreement to avoid subsequent disputes.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
Generally, the payer of foreign exchange is determined according to the situation of contract signing. If the agent signs the contract, the agent shall make the payment; if it is signed in the name of the principal, the principal shall make the payment, and attention should also be paid to the changes in foreign exchange policies.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
If the agent declares the import in its own name, then it is the agent who shall make the foreign exchange payment, otherwise it may affect the process of goods import and foreign exchange verification and other matters.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
The key lies in the business model. In the pure agency model, the agent may only help with the operation process, and the principal shall make the foreign exchange payment; if the agent purchases the goods outright, then it is definitely the agent who shall make the foreign exchange payment.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
In practice, in some cases, the payer of foreign exchange is determined according to the negotiation between the two parties. However, the negotiation should also follow the requirements of foreign exchange administration and relevant documents should be prepared.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
If it involves some special trade methods, such as processing trade, etc., the determination of the subject of foreign exchange payment may be more complex and should be based on specific regulations and the essence of the business.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
The foreign exchange administration supervises very strictly. Regardless of who makes the foreign exchange payment, it is necessary to ensure that the flow of funds matches the flow of goods, otherwise there may be penalties.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
Sometimes the bank will also require the provision of relevant supporting materials to confirm the subject of foreign exchange payment, so the materials must be fully prepared.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
It also depends on how the agency agreement is stipulated. If the two parties clearly divide the responsibility of foreign exchange payment in advance, a lot of troubles can be reduced.