By Michael Li
China’s State Administration of Foreign Exchange (SAFE) opened a public consultation on proposed changes to current-account foreign exchange administration on November 2, 2026, with comments due by December 1. The proposals seek to facilitate cross-border settlement. They should not be treated as rules already in force or as permission to pay an unverified recipient when a supplier requests different bank details.
For overseas buyers, the distinction is practical: a proposed improvement to settlement procedures does not establish who is entitled to receive a particular payment.
SAFE’s explanatory note describes nine facilitation measures and one supervisory requirement. The proposed changes include broader foreign exchange services for new forms of trade and measures intended to reduce settlement and transaction costs.
The draft proposes nationwide expansion of specified cross-border trade facilitation arrangements from January 1, 2027, and changes to trade-credit reporting from June 1, 2027.
These are proposed implementation dates. Businesses should wait for the final instrument and confirm the applicable arrangements with their banks.
The draft also retains authenticity and legality checks, customer due diligence and monitoring of unusual transactions. Facilitation would therefore operate within a compliance framework, rather than remove scrutiny of the underlying transaction.
An overseas buyer may contract with one Chinese company and later receive instructions to pay another entity.
That request needs its own explanation and supporting documentation. The immediate questions are who issued the instruction, what authority that person has and how payment to the proposed recipient will be treated under the contract.
The payment arrangement should also explain whether the original supplier remains responsible for delivery, quality, refunds and other obligations.
These are transaction-management questions arising alongside the policy news. The consultation announcement does not determine whether a particular third-party collection arrangement is valid or whether a buyer has discharged its payment obligation.
A judgment published on the Supreme People’s Court’s China International Commercial Court website concerns a Shanghai buyer and a German seller of industrial components.
The buyer transferred USD 173,280 to a Ukrainian bank account after receiving emails requesting changes to payment details. The messages used a domain resembling, but differing from, the seller’s usual email domain.
The court found that the buyer had not established that the account belonged to the seller or that the seller had authorised the payment instruction. The buyer’s evidence of a transfer did not establish performance of its contractual payment obligation. The appellate court upheld the judgment requiring payment of the outstanding price and interest.
The case is identified as (2024) Hu 01 Min Zhong No. 10365, with a judgment date of February 13, 2025.
This was a Chinese buyer purchasing from a German seller, not an overseas buyer paying a Chinese supplier. Its relevance is the evidential problem: money leaving the buyer’s account did not prove that the contractual creditor had been paid.
A useful payment-control procedure is to verify any changed instruction through contact details already held in the company’s records.
Do not rely solely on a telephone number, messaging account or signature supplied in the email requesting the change.
Ask the established contact to confirm the complete beneficiary name, account number, bank location, reason for the change and invoices affected. Record who confirmed the instruction and when.
China Export & Credit Insurance Corporation’s published case analysis also describes payment-diversion incidents involving lookalike email addresses and compromised email accounts. Its recommendations include confirming changes through an additional communication channel and agreeing payment-change procedures in advance.
For larger transactions, an internal second-person review can help ensure that the employee processing the payment is not also its only verifier.
Where the proposed recipient differs from the contracting supplier, use the following questions to organise the review.
| Issue | Information to establish |
|---|---|
| Contracting party | The supplier’s complete legal name and registration details |
| Proposed recipient | The beneficiary’s complete legal name and bank details |
| Relationship | Why the recipient is collecting funds for this transaction |
| Authority | Who approved the instruction and how that authority was verified |
| Payment effect | Whether receipt by the named recipient satisfies the identified invoice or obligation |
| Continuing obligations | Who remains responsible for delivery, defects, refunds and disputes |
A written instruction should identify the relevant contract, invoice, amount and currency. Where appropriate, obtain an agreed amendment or collection authorisation that addresses the effect of the payment.
A signed document is part of the evidence. It still needs to come from an authorised source, and the proposed arrangement should be checked with the handling bank and legal advisers as appropriate.
For a trademark transfer, technology licence or other IP transaction, payment verification should sit alongside a review of ownership and authority.
Identify the owner of the right, the contracting party, the payment recipient and the party responsible for completing any transfer or delivery steps. If these are different entities, document their respective roles.
For example, a licence agreement should make clear which rights are granted, for which territory and period, and by whom. A payment request alone does not answer those questions.
Where a transaction involves technology leaving China, the issues discussed in China’s technology export registration update require a separate assessment. Payment arrangements and technology-delivery requirements should be coordinated when setting contractual milestones.
The November 2 announcement opens a public consultation. Proposed dates and procedures should not be treated as operative requirements before the relevant final rules are issued and take effect.
No. It is a reason to investigate the arrangement. Establish the recipient’s role, verify the instruction and clarify the contractual effect before paying.
Not necessarily. The cited judgment illustrates that proof of a transfer may be insufficient where the buyer cannot establish that the recipient was the seller or was authorised by it.
Verify the request through an established contact channel, compare it with the contract and previous invoices, and document the explanation and authorisation. Resolve discrepancies before releasing funds.
Contact the remitting bank immediately to request tracing and discuss available recall or other protective steps. Preserve the emails, payment records and account instructions, notify the genuine counterparty through a verified channel and report suspected fraud to the relevant authorities. Recovery is not guaranteed.
IPcrossark helps businesses clarify trademark, patent and copyright service requirements and coordinate the documents and professionals involved in their matters.
For an IP purchase, transfer or licensing enquiry, start by identifying the right involved, its recorded owner, the proposed contracting party and the transaction timetable.
You can contact IPcrossark to discuss the relevant IP service scope and coordination needs. Banking approval, foreign exchange treatment and contractual payment arrangements should be addressed with the appropriate bank and legal professionals.
SAFE — Public Consultation on Further Optimising Current-Account Foreign Exchange Administration
Shanghai Government — Consultation Notice, Draft Measures and Explanatory Note
Supreme People’s Court — CLOUT Case 2238: Payment Instructions and Outstanding Purchase Price
China Export & Credit Insurance Corporation — Payment Diversion Case Studies
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