To further enhance law-based foreign exchange administration and to increase the transparency and convenience of foreign exchange administration, the State Administration of Foreign Exchange (SAFE) recently promulgated a newly-modified List of Administrative Licensing Items of the State Administration of Foreign Exchange (hereinafter referred to as List of Administrative Licensing Items). The List of Administrative Licensing Items shall come into effect as of the date of promulgation.

During recent years, the SAFE has made great efforts to carry out the work of constructing the administrative licensing system. A standardized legal framework for administrative licensing was established. Efforts were also made to further standardize the procedures for handling administrative licensing, to streamline administration, to delegate power to lower levels, and to sort out the administrative licensing items. Since 2002, the SAFE straightened out and cancelled 45 administrative approval items in six batches, with the approval authority of more than 20 licensing items delegated to the branches and sub-branches of the SAFE.

The List of Administrative Licensing Items issued herein is the latest amendment to the 2005 version based on the progress in straightening out the administrative licensing items during recent years. The number of administrative licensing items has been reduced from 39 to 25. The newly-modified List of Administrative Licensing Items provides a comprehensive and accurate picture of the administrative licensing items currently implemented by the SAFE, as well as the key factors in the relevant procedures. With a clearer presentation, more succinct content, and simplified application materials, the List of Administrative Licensing Items will play an active role in further standardizing the procedures for exchange-related administrative licensing and will increase the transparency of foreign exchange administration.

It is explicitly required by the SAFE that all branches and sub-branches of the SAFE shall enhance their sense of responsibility, sense of mission, and sense of urgency in performing their duties regarding the law-based administrative licensing of foreign exchange administration in compliance with the requirements of the new circumstances. They shall enhance awareness of complying with the system, and carry out law-based administration and administrative licensing in a conscientious manner and in strict compliance with the provisions of the Administrative Licensing Law of the PRC, the relevant laws and regulations, and the rules related to foreign exchange administration in an effort to deliver better services to the public.

To deepen the reform of the foreign exchange administration system, to increase capital efficiency in domestic enterprises, and to facilitate the trade process, the State Administration of Foreign Exchange recently promulgated the Circular on Launching a Pilot Policy Program for Overseas Deposits of Export Proceeds in Some Regions, to launch a pilot policy program for overseas deposits of export proceeds (hereafter referred to as pilot program) in Beijing, Guangdong (including Shenzhen), Shandong (including Qingdao), and Jiangsu from October 1, 2010. The duration of the pilot program will be one year.

The policy involved in the pilot program mainly covers the following: first, the foreign exchange authority shall strictly examine the qualifications of enterprises before granting approval to domestic enterprises to open accounts overseas. The accounts opened overseas shall be used for the deposit of the export proceeds of domestic enterprises from truthful and legitimate transactions, for external payments in goods trade and some services trade, and for external payments under the capital account approved by or registered with the foreign exchange authority; second, the foreign exchange authority will manage the scale of the total capital deposited overseas by domestic enterprises; third, the foreign exchange authority will simplify the formalities for import and export write-offs and online inspections, and implement an ex post facto reporting system for enterprises and banks; fourth, the foreign exchange authority will conduct off-site monitoring of the receipt and payment activities of the domestic enterprisesoverseas accounts and on-site inspections of any abnormalities in the monitoring process.

The pilot program for overseas deposits of export proceeds is a productive attempt to complete the existing system for the administration of foreign exchange trade receipts and payments: on the one hand, it diversifies the means of adjusting the balance of payments; on the other, it paves the way for capital operations by domestic enterprises; for enterprises frequently involved in the balance of trade, it helps lower expenses and exchange settlement costs for cross-border transfers of capital in foreign exchange; for enterprises mainly competing in the international market and strong in group management, it helps improve the capital efficiency, lower overseas financing costs, and thus strengthen their competitiveness in the international market.