To actively support the development of cross-border e-commerce, and guard against the risks arising from online foreign exchange payments, the State Administration of Foreign Exchange (SAFE) has since 2013 implemented the pilot program of foreign exchange payment business forcross-border e-commerce through payment institutions in Shanghai, Beijing, Chongqing, Zhejiang and Shenzhen, and the outcome of the pilot program has been satisfactory. On this basis, the SAFE recently issued the Circular on the Implementation of the Pilot Program of Cross-border Foreign Exchange Payment Business through Payment Institutions (Huifa No.7 [2015], the "Circular"), to pilot cross-border foreign exchange payment business through some payment institutions across the country, allowing the payment institutions to provide the parties of cross-border e-commerce transactions with foreign exchange receipts, payments, settlement and sales services.

The major contents of the Circular include: first, raising the limit on a single transaction. The limit on a single transaction in online shopping is raised from the equivalent of USD10,000 to the equivalent of USD50,000, and the restriction on the number of foreign exchange reserve accounts opened by a payment institution is relaxed. Second, regulating the processes of the pilot program. Any payment institution shall register with the foreign exchange authority at the place of its incorporation on the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade to be qualified for the pilot program. Third, implement strict risk management. Any payment institution is required to strictly perform the responsibility of verifying the authenticity of transactions, retain relevant information for 5 years for future reference, and promptly and accurately submit relevant business data and information. The foreign exchange authorities will carry out offsite and onsite verifications on the pilot business for prudential regulation.

The Circular shall come into effect as of the date of issuance.