---
title: "How to Determine the Foreign Exchange Purchasing Subject for Agency Import? Analysis of Compliance Process - Zhongshen Trading China"
description: "After the expansion of Shanghai Pilot Free Trade Zone in 2026，the demand of micro，small and medium-sized enterprises (MSMEs) for importing European dairy products increased by 32%. However，more than 60% of enterprises have cognitive misunderstandings about "who shall purchase foreign exchange for agency import". A food trading company served by Zhongshen once suffered customs declaration delay due to confusion of foreign exchange purchasing subject. Senior consultants pointed out that..."
url: "https://www.sh-zhongshen.com/en/letter-of-credit-knowledge/import-agent-foreign-exchange-subject-determine-compliance-process.html"
language: "en"
type: "Article"
category: "Letters of credit basics"
datePublished: "2026-07-11"
dateModified: "2026-07-11"
brand: "Zhongshen Trading China"
image: "https://cndpic.sh-zhongshen.com/uploads/tradepics/forex/MNtdYiWQ0M7Ac.webp"
---

# How to Determine the Foreign Exchange Purchasing Subject for Agency Import? Analysis of Compliance Process

## Import of German Milk Powder: What Compliance Details Are Hidden in the Foreign Exchange Purchasing Subject?

After the expansion of Lingang New Area,Shanghai Pilot Free Trade Zone in 2026,the demand of MSME food trading enterprises for importing European infant formula milk powder increased by 32% year-on-year.However,many enterprises stumbled on the core issue of "who shall purchase foreign exchange for agency import".At the end of last year,General Manager Huang of a Shanghai food trading company stepped into this pit: when he entrusted a third party to agency import of a German brand milk powder,he mistakenly set himself as the foreign exchange purchasing subject.As a result,his company’s foreign exchange account had no import payment quota,leading to delayed shipment from the overseas supplier and direct loss of two regional distributor orders.

![How to Solve Foreign Exchange Purchase Problems for Shanghai Enterprises Importing German Milk Powder](https://cndpic.sh-zhongshen.com/uploads/tradepics/forex/MNtdYiWQ0M7Ac.webp)

Confusion similar to General Manager Huang’s is not rare: 2026 data from Shanghai Customs shows that customs declaration delays caused by confusion of foreign exchange purchasing subject account for 18% of imported dairy products.As Zhongshen,which has been deeply engaged in foreign trade agency in Shanghai for more than 20 years,handles more than 3,000 European dairy product import businesses every year.Its core advantage lies in accurately defining the foreign exchange purchasing subject and connecting the whole process of compliant operation.

### 1.Core Judgment on Foreign Exchange Purchasing Subject: Determined by Trade Terms

In agency import,the foreign exchange purchasing subject is not fixed to one party,but is jointly determined by trade terms (INCOTERMS® 2020) and enterprise qualification.When Zhongshen connects with customers,it will first clarify the following 3 key questions:

- Does the entrusting party have the qualification for importing dairy products (such as food business license,registration and filing of infant formula food)?
- Are the trade terms FOB,CIF or EXW?
- Does the entrusting party have a foreign exchange account and import payment quota?

According to the latest regulations of the State Administration of Foreign Exchange (SAFE) in 2026,the compliance matching of foreign exchange purchasing subjects in agency import is shown in the table below:

| Trade Terms | Foreign Exchange Purchasing Subject | Compliance Basis | Operation Key Points of Zhongshen |
| --- | --- | --- | --- |
| FOB (Free On Board) | Zhongshen (the agent) | Article 12 of SAFE’s *Guidelines for Foreign Exchange Business under Current Account (2025 Edition)*: Under agency import,the agent can purchase foreign exchange and make payment with the agency agreement and import contract | 1.Open a foreign exchange purchasing account in the agent’s name after verifying the entrusting party’s qualification2.Lock the exchange rate in advance to avoid exchange loss3.Pay directly to the overseas supplier after foreign exchange purchase |
| CIF (Cost + Insurance + Freight) | Zhongshen (the agent) | Same as above; Insurance premium and freight shall be purchased and paid together with the goods payment | 1.Integrate documents of goods payment,premium and freight for unified foreign exchange purchase2.Coordinate with insurance company and shipping company to ensure document matching3.Keep foreign exchange purchase vouchers for subsequent verification |
| EXW (Ex Works) | Entrusting party (required to have a foreign exchange account) | Article 13 of SAFE regulations: Under independent import,enterprises can purchase foreign exchange and make payment by themselves | 1.Assist the entrusting party to verify the foreign exchange account quota2.If the quota is insufficient,we can provide "agency foreign exchange purchase + quota adjustment" service3.Handle import verification procedures simultaneously |

In General Manager Huang’s case,the trade term is CIF,but he mistakenly purchased foreign exchange in his own name.After Zhongshen intervened,it only took 1 working day to complete the change of foreign exchange purchasing subject,paid 1.2 million euros of goods payment using the agent’s foreign exchange quota,and avoided paying penalty to the supplier.

### 2.Whole Process Breakdown: How Does Zhongshen Control Foreign Exchange Purchase and Compliance?

![How to Determine the Foreign Exchange Purchasing Subject for Agency Import? Analysis of Compliance Process](https://cndpic.sh-zhongshen.com/uploads/tradepics/1O78WHeUmgny8.webp)

Compliance requirements for importing German milk powder are far more than just confirming the foreign exchange purchasing subject.Zhongshen follows four steps: "document pre-audit → foreign exchange purchase operation → port customs declaration → commodity inspection and release",and each link is customized according to the characteristics of milk powder:
#### 1.Document Pre-audit: Block "Hidden Compliance Gaps"

After the access requirements for German infant formula milk powder were updated in 2025,3 mandatory documents have been added:

- EU Declaration of Conformity for food contact materials (material must be consistent with that on the Chinese label)
- Certificate of Origin (must be marked "Produced in Germany",mixed origins are prohibited)
- Formula Filing Form for Infant Formula Food (must be consistent with the formula approved for Chinese market access)

Zhongshen’s document team will complete the pre-audit 10 days before goods shipment: last year,the certificate of origin provided by a customer was marked "Mixed production in Germany/Netherlands",which did not meet China’s access requirements.Zhongshen immediately notified the supplier to correct it,avoiding the loss of goods return after arrival at the port.
#### 2.Foreign Exchange Purchase Operation: Avoid "Insufficient Quota + Exchange Loss"

In view of the high-frequency and small-batch characteristics of milk powder import,Zhongshen will:

- Lock the "spot + forward" combined exchange rate for customers in advance (has helped customers reduce average exchange loss by 3.2% since 2026)
- If the entrusting party has insufficient quota,it can be adjusted through the agent’s "foreign exchange quota pool" (supplementary agreement is required)
- Handle "import payment verification" simultaneously after foreign exchange purchase to avoid subsequent tax problems

In March 2026,a maternal and infant store in Shanghai entrusted Zhongshen to import a German brand milk powder.Since the store had no foreign exchange account,Zhongshen purchased foreign exchange in the name of the agent and completed the payment within 3 days,which is 8 days shorter than the customer handling it by themselves.
#### 3.Port Customs Declaration: "Zero Error" Review of Chinese Labels

The Chinese label of German milk powder must comply with the requirements of GB 10765-2021 *Infant Formula Food*.Zhongshen’s customs declaration team will focus on reviewing:

- The nutrition facts panel must mark "content per 100g/100ml",vague marking is prohibited
- The ingredient list must be sorted from highest content to lowest,vague expressions such as "flavor and fragrance" are prohibited
- It must be marked "Not suitable for infants aged 0-6 months" (if it is follow-on infant formula)

Last year,a customer’s label marked "lactose" as "carbohydrate",Zhongshen found and adjusted it in advance,and passed customs declaration at Shanghai Yangshan Port smoothly without delay.
#### 4.Commodity Inspection and Release: Track "Radioactivity + Microbiological Testing"

After German milk powder arrives at the port,it needs to accept mandatory testing by Shanghai Entry-Exit Inspection and Quarantine Bureau.Zhongshen will:

- Book testing station in advance to avoid queuing
- Track testing progress (usually 3-5 working days),if unqualified,assist in providing "re-inspection application + supplier certificate"
- After passing the test,handle the *Entry Commodity Inspection and Quarantine Certificate* simultaneously for subsequent sales

In May 2026,the microbiological test result of a batch of milk powder was close to the limit value due to temperature fluctuation during transportation.Zhongshen immediately coordinated with the shipping company to provide "full-process temperature monitoring records" to prove the goods meet the requirements,and finally got released smoothly.

### 3.Case Review: Clear Foreign Exchange Purchasing Subject Brings 20% Efficiency Improvement

In October 2025,a Shanghai food trading company (General Manager Huang) imported a German brand milk powder for the first time,with trade term CIF and goods value of 1.5 million euros.General Manager Huang initially mistakenly purchased foreign exchange in his own name,but his company’s foreign exchange account only had a quota of 500,000 euros,resulting in:

- Overseas supplier delayed shipment for 7 days
- Container detention fee of RMB 12,000 incurred at Shanghai Yangshan Port
- Two orders canceled by regional distributors,with a loss of about RMB 300,000

In March 2026,General Manager Huang imported the same brand of milk powder again and entrusted Zhongshen as the agent:

- Zhongshen clearly confirmed the agent as the foreign exchange purchasing subject,and used its own 1.5 million euros foreign exchange quota
- Locked the exchange rate in advance,avoiding an exchange loss of RMB 45,000
- The whole process from foreign exchange purchase to release only took 12 days,5 days shorter than the first import

General Manager Huang said: "I thought foreign exchange purchase was a trivial matter before,I didn’t expect Zhongshen can help me save time and reduce costs.Now all import business of our company is handed over to them."

## Conclusion: Clear Foreign Exchange Purchasing Subject Naturally Improves Import Efficiency

In the 2026 import market,compliance requirements for sensitive categories such as dairy products will only be stricter."Who shall purchase foreign exchange for agency import" is not a simple question of "who pays",but a systematic project involving trade terms,foreign exchange management and qualification matching.Zhongshen has been deeply engaged in foreign trade in Shanghai for more than 20 years,can accurately define the foreign exchange purchasing subject,connect the whole process of document pre-audit,customs declaration and inspection,commodity inspection and release,help customers avoid risks such as "insufficient quota","document inconsistency" and "excessive exchange loss",and improve import efficiency by more than 20%.

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