Several Measures for Promoting the Accelerated Development of New Offshore International Trade in China (Shandong) Pilot Free Trade Zone

To implement the requirements of the "Notice on Promoting Several Measures for Reform and Innovation in Trade and Investment Facilitation in Pilot Free Trade Zones" (Guofa [2021] No. 12) issued by the State Council and the "Notice on Promoting Several Measures for Reform and Innovation in Trade and Investment Facilitation in the China (Shandong) Pilot Free Trade Zone" (Lu Zheng Zi [2022] No. 70) issued by the People's Government of Shandong Province, cultivate and expand new formats and models of foreign trade, and promote the rapid development of new offshore international trade in the Shandong Pilot Free Trade Zone, these measures are formulated.

Scope of Application

The new offshore international trade referred to in these measures refers to trade between residents and non-residents of China, where the goods involved in the transaction do not enter or leave the first-line customs territory of China or are not included in China's customs statistics. This includes, but is not limited to, offshore resale, global procurement, overseas processing on consignment, and purchasing goods overseas for contracted projects.

These measures apply to enterprises whose business registration, actual operation, and financial and tax administration are all within the Pilot Free Trade Zone, and which are substantially operational and have not been subject to legal or regulatory penalties or customs/foreign exchange credit downgrades for two consecutive years. Enterprises must not be included in the restrictive classification management catalogue publicly released by the regulatory authorities.

Increased Policy Support

(1) Talent Support. Support the Shandong Pilot Free Trade Zone in deepening reforms to its talent development system and mechanisms and optimizing its talent ecosystem. Focusing on the layout and development needs of new offshore international trade, training will be organized for key management personnel of offshore trading enterprises in the Pilot Free Trade Zone to improve their international capabilities and professional skills. Market-based mechanisms will be used to expand talent recruitment channels and accurately introduce compound offshore trading talents with an international perspective and understanding of international rules. Support eligible offshore trading talents in applying for the Taishan Industrial Leading Talents Project (management category), providing relevant funding upon approval, and issuing a "Shandong Huicai Card" to enjoy 29 green channel services in entry and exit, children's schooling, and social insurance. (Leading unit: Shandong Provincial Department of Commerce, Shandong Provincial Department of Industry and Information Technology, Shandong Provincial Department of Human Resources and Social Security)

(2) Certification Support. Support new offshore international trade service enterprises (including, but not limited to, providing overall scheme design for procurement and logistics, financial and financial payment services, and retail, wholesale, and transportation services) in applying for certification as technologically advanced service enterprises. For technologically advanced service enterprises, relevant tax preferential policies will be implemented in accordance with special tax laws, regulations, and State Council provisions. (Leading unit: Shandong Provincial Department of Science and Technology; Responsible units: Shandong Provincial Development and Reform Commission, Shandong Provincial Department of Finance, Shandong Provincial Department of Commerce, Shandong Provincial Taxation Bureau)

(3) Resource Support. Support enterprises in the Pilot Free Trade Zone in developing new offshore international trade and accelerating the cultivation of new offshore international trade service capabilities. Provide certain support for investment in the research and development of digital verification systems and related functions, data procurement and operation and maintenance, and the use of systems by banking institutions to assist in business operations. Actively introduce relevant market entities and cultivate demonstration entities. (Leading unit: Shandong Provincial Department of Commerce)

Settlement and Financing Convenience

(4) Support for Independent Document Verification. In accordance with the principle of "substance over form," banking institutions will independently determine the types of transaction documents to be verified for high-quality clients with a certain scale, experience in new offshore international trade, and no poor regulatory record. (Leading unit: People's Bank of China, Shandong Branch)

(5) Support for Settlement Convenience Innovation. Encourage banking institutions, in accordance with the three principles of "Know Your Customer (KYC)", "Know Your Business (KYB)", and "Due Diligence," to allow multinational corporations with actual business needs to apply for the conduct of current account funds pooling and netting settlement business, including offshore resale business, as per regulations. (Leading unit: People's Bank of China, Shandong Branch)

(6) Comprehensive Financial Services. Encourage banking institutions, on the premise of legality, compliance, controllable risk, and commercial sustainability, to prudently and orderly provide comprehensive service support such as insurance, financing, and supply chain finance for new offshore international trade businesses. Encourage the sub-district management committees to explore the establishment of a risk compensation mechanism for new offshore international trade. (Leading unit: People's Bank of China, Shandong Branch; Shandong Regulatory Bureau of the National Financial Regulatory Administration; Qingdao Regulatory Bureau of the National Financial Regulatory Administration)

(7) Incentive Mechanism. Encourage banking institutions to increase their investment in resources, human resources, and technology to improve their ability to conduct new offshore international trade. Banking institutions with the highest annual settlement volume of new offshore international trade will be included in the list of excellent partners of the Shandong Pilot Free Trade Zone and commended. Banking institution employees who provide high-quality settlement services will be commended. (Leading unit: People's Bank of China, Shandong Branch; Shandong Provincial Department of Commerce; Shandong Provincial Local Financial Regulatory Bureau)

Innovative Regulatory Model

(8) Joint Monitoring. Encourage the promotion and application of digital verification systems that meet the needs of authenticity verification for new offshore international trade, centrally accessing and fully importing data from international shipping, logistics, ports, and the customs of major countries, integrating the information flow of funds, goods, and documents involved in offshore trade, and providing auxiliary verification for new offshore international trade. Expand the regulatory methods for new offshore international trade and alert banking institutions and enterprises to the risks of new offshore international trade businesses. Improve cross-departmental joint monitoring capabilities, implement concentrated and effective normative evaluation and self-discipline monitoring management measures, and carry out full-process early warning management of systemic cross-border capital flow risks, with classified, collaborative, and intelligent monitoring and analysis as the core. (Leading unit: Shandong Provincial Department of Commerce; People's Bank of China, Shandong Branch)

(9) Classified Supervision. Actively explore the "negative list + positive list" management model. The sub-district management committee will coordinate banking institutions to strengthen classified research on market entities, support banking institutions in dynamically implementing customer risk classification based on the credit status, compliance level, and risk control capabilities of enterprise clients, support banking institutions in optimizing business operating standards based on the characteristics of new offshore international trade, implement differentiated management by category, and focus on related transactions, changes in income and expenditure amounts, large and frequent income and expenditure, financing leverage ratios, and excessive concentration of financing. (Leading unit: People's Bank of China, Shandong Branch; Shandong Provincial Department of Commerce)

Establishment of a Comprehensive Service Mechanism

(10) Establishment of a Special Needs Appraisal and Consultation Mechanism. For the real and legitimate special business needs of enterprises, the Shandong Pilot Free Trade Zone Office will lead relevant business authorities to guide the sub-district management committees and banking institutions to conduct case analysis and policy research, tailor personalized solutions according to the different attributes of industries, and meet the diversified business needs of enterprises. (Leading unit: Shandong Provincial Department of Commerce; People's Bank of China, Shandong Branch; Shandong Provincial Local Financial Regulatory Bureau)

(11) Establishment of a New Offshore International Trade Service Center. Support the sub-district management committees in establishing a new offshore international trade service center to provide policy consultation, business training, project coordination, financial law, and other services to banking institutions and enterprises in the zone. (Leading unit: Shandong Provincial Department of Commerce)

(12) Improve the judicial guarantee mechanism. Introduce a number of well-known domestic and foreign arbitration and mediation institutions to provide one-stop international commercial dispute resolution services for new offshore international trade. Expand and strengthen the court's financial trial functions, and legally hear various financial disputes arising from cross-border investment and financing and cross-border payment and settlement businesses in new offshore international trade, providing the free trade pilot zone with more just, efficient, convenient, and predictable financial judicial guarantees. (Leading unit: Provincial Department of Commerce, Provincial High Court)

VI. Strengthen Organization and Implementation

Explore the establishment of a new working mechanism and ecological system for new offshore international trade, namely, "government policy guidance + precise foreign exchange management guidance + in-depth bank services + platform panoramic verification + enterprise innovation as the main force." The provincial free trade zone office is responsible for the overall promotion of the development of new offshore international trade formats. Based on the needs of innovative development and new situations and problems encountered in the process of promotion, it will hold regular meetings to coordinate and resolve relevant issues; strengthen inter-departmental coordination and promote data sharing; conduct summary assessments and implement incentive management; summarize innovative experiences and explore integrated innovative achievements in offshore trade. Each department (unit) is responsible for policy innovation research in its respective fields, adhering to problem orientation, goal orientation, effect orientation, and responsibility orientation. Under the premise of safeguarding the safety bottom line, it will boldly explore and pilot innovative measures, output institutional innovation achievements, and create a policy highland for new offshore international trade. Each sub-regional management committee is responsible for understanding the problems and demands of banking institutions and enterprises in the region, formulating practical and feasible promotion measures, coordinating departments (units) to cultivate and expand the development of new offshore international trade formats in the region; increasing the intensity of investment and trade facilitation and financial reform and innovation, continuously improving the business environment in the region, and building a gathering area for new offshore international trade formats.