Regulation of the People's Republic of China on Foreign Exchange Administration (2008 Revision)

Regulation of the People's Republic of China on Foreign Exchange Administration (2008 Revision) Order of the State Council of the People's Republic of China (No.532) The Regulation of the People's Republic of China on Foreign Exchange Administration, as amended, which was adopted at the 20th executive meeting of the State Council on August 1, 2008, is hereby promulgated, and shall come into force as of the date of promulgation. Premier: Wen Jiabao August 5, 2008 Regulation of the People's Republic of China on Foreign Exchange Administration (promulgated by Order No.193 of the State Council of the People's Republic of China on January 29, 1996, amended according to the Decision of the State Council on Amending the Regulation of the People's Republic of China on Foreign Exchange Administration on January 14, 1997, and amended again at the 20th executive meeting of the State Council on August 1, 2008) Chapter I General Provisions Article 1 This Regulation is formulated for the purposes of strengthening foreign exchange administration, maintaining the balance of international payments and promoting the sound development of the national economy. Article 2 The foreign exchange administrative department of the State Council and the branches thereof (hereinafter referred to as foreign exchange administrative organs) shall perform the duty of foreign exchange administration in accordance with law and take charge of the implementation of this Regulation. Article 3 The term “foreign exchange” as mentioned in this Regulation refers to the following instruments of payment and assets expressed in foreign currencies that can be used for international liquidation: (1) foreign currencies in cash, including paper money and coins; (2) foreign currency payment instruments, including bills, bank deposit certificates and bank cards; (3) negotiable securities in foreign currencies, including government bonds and stocks; (4) special drawing rights; and (5) other foreign exchange assets. Article 4 This Regulation shall apply to the foreign exchange income and expenditure and foreign exchange business operations of Chinese institutions and individuals, and the foreign exchange income and expenditure and foreign exchange business operations conducted within the territory of the People's Republic of China by overseas institutions and individuals. Article 5 International payments in foreign exchange and the transfer of foreign exchange under the current items shall not be subject to any state control or restriction. Article 6 The state practices the balance of payments statistics and reporting system. The foreign exchange administrative department of the State Council shall collect statistical data about and monitor the balance of payments, and publish the balance of payments on a regular basis. Article 7 Financial institutions operating foreign exchange business shall open foreign exchange accounts for their clients and handle foreign exchange business through such accounts in accordance with the provisions of the foreign exchange administrative department of the State Council. A financial institution operating foreign exchange business shall file the foreign exchange income and expenditure of its clients and the changes in the foreign exchange accounts of the clients with a foreign exchange administrative organ according to law. Article 8 It is prohibited to circulate foreign currencies in the People's Republic of China, or use foreign currencies for pricing or account settlement. Article 9 The foreign exchange income of a domestic institution or individual may be transferred back into the territory of the People's Republic of China or deposited overseas. The specific conditions and term requirements shall be determined by the foreign exchange administrative department of the State Council in light of the balance of payments and the foreign exchange administrative requirements. Article 10 The foreign exchange administrative department of the State Council shall hold, manage, and operate the foreign exchange reserve of the state under the principles of safety, fluidity and increment. Article 11 Where the balance of payments becomes or may become seriously unbalanced, or the national economy falls or may fall into a serious crisis, the state may take necessary protection or control measures for the balance of payments. Chapter II Foreign Exchange Administration under the Current Items Article 12 The foreign exchange income and expenditure under the current items shall be made on the basis of authenticity and lawfulness. Financial institutions operating the foreign exchange sale or settlement business shall reasonably examine the authenticity of the transaction documents and the consistency between foreign exchange income and expenditure in accordance with the relevant provisions of the foreign exchange administrative department of the State Council. The foreign exchange administrative organs have the right to supervise and inspect the issues prescribed in the preceding paragraph. Article 13 The foreign exchange income under the current items may be reserved or sold to financial institutions operating the foreign exchange sale or settlement business. Article 14 The foreign exchange expenditure under the current items shall be paid by an institution with its self-owned foreign exchange upon valid documents or with the foreign exchange purchased from any financial institution operating the foreign exchange sale or settlement business in accordance with the administrative provisions of the foreign exchange administrative department of the State Council on the payment and purchase of foreign exchange. Article 15 The limits for the amounts of foreign currencies in cash which are carried or declared when entering or exiting the territory of the People's Republic of China shall be determined by the foreign exchange administrative department of the State Council. Chapter III Foreign Exchange Administration under the Capital Items Article 16 An overseas institution or individual that makes direct investments in the territory of the People's Republic of China shall handle the registration formalities at a foreign exchange administrative organ upon the approval of the competent department. An overseas institution or individual that issues or trades negotiable securities or derivative products in the territory of the People's Republic of China shall abide by the market access provisions of the state and handle the registration formalities at the foreign exchange administrative department of the State Council. Article 17 A domestic institution or individual that makes direct investment or issues or trades negotiable securities or derivative products overseas shall handle the registration formalities at the foreign exchange administrative department of the State Council. If the relevant state provisions require it/him to get the approval of the competent department or archive the issue with the competent department, it/he shall do so before handling the registration formalities. Article 18 The state shall implement the scale management of foreign debts. Any institution or individual borrowing foreign debts shall abide by the relevant state provisions and handle the foreign debt registration formalities at a foreign exchange administrative organ. The foreign exchange administrative department of the State Council shall take charge of collecting statistical data about and monitoring the foreign debts of the whole nation, and publish the foreign debts situations on a regular basis. Article 19 An institution shall apply to a foreign exchange administrative organ before providing foreign guarantee. The foreign exchange administrative organ shall make a decision of approval or disapproval according to the asset-liability situation of the institution. If the relevant state provisions provide that its scope of business shall be subject to the approval of the competent department, it shall get the approval before applying to the foreign exchange administrative organ. The institution shall, after concluding a foreign guarantee contract, handle the foreign guarantee registration formalities at the foreign exchange administrative organ. The provisions of the preceding paragraph shall not apply where an institution, upon the approv......