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The People's Bank of China and the State Administration of Foreign Exchange (SAFE) released in November 2015 the Operational Guidelines for Funds Management in Cross-Border Issuance and Sales of Mainland and Hong Kong Securities Investment Funds (Guidelines), marking the official launch of the Mutual Fund Connect scheme. According to the Guidelines, the SAFE will disseminate the data on the inward and outward remittances for the cross-border issuance and sales of Mainland and HK funds on a monthly basis starting from February 2016. As at the end of January 2016, the cumulated net inward remittance from the issuance and sales of Mainland funds in Hong Kong amounted to RMB 21.5433 million, and the cumulated outward remittance for the issuance and sales of HK funds in the Mainland, RMB 40.1767 million. 2016-03-14/en/2016/0314/1191.html
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The Payment and Settlement Department of the People's Bank of China, the branches and foreign exchange administration departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government, and the SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo, and the designated Chinese-funded foreign exchange banks: To actively support the development of cross-border e-commerce, and guard against the risksarising fromonline foreign exchange payments, the SAFE has formulated the Guidance on the Pilot Program of Cross-border Foreign Exchange PaymentBusiness Through Payment Institutions ("Guidance", see Annex) based on the lessons and experience gained in the preliminary stage to pilot cross-border foreign exchange payment business through payment institutions across the country, which is hereby printed and distributed for implementation. The SAFE branches and foreign exchange administration departments (hereinafter referred to as the "SAFE branches") shall select the payment institutions with actual demand, compliant operations and mature business and technical conditions to participate in the pilot program of cross-border foreign exchange payment business, and register them on the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade, in accordance with the Guidance. The SAFE branches shall strictly review the payment institutions participating in the pilot program in accordance with the principle of prudence, and improve the quality of such review by strengtheningtheir communication with the payment and settlement administration departments of the local branches of the People's Bank of China (PBC) through ex-ante consultation or ex-post notification, as the case may be. The SAFE branches shall, upon receipt of the Circular, promptly forward it to the central sub-branches (sub-branches), local commercial banks and foreign-funded banks under their respective jurisdiction. All designated Chinese-funded foreign exchange banks shall, upon receipt of the Circular, promptly forward it to their branches. Any problemsthat occur during the implementation of the policy shall be promptly reported to the Current Account Management Department of the State Administration of Foreign Exchange. Appendix: Guidance on the Pilot Program of Cross-border Foreign Exchange Payment Business through Payment Institutions State Administration of Foreign Exchange January 20,2015 Appendix Guidance on the Pilot Program of Cross-border Foreign Exchange Payment Business Through Payment Institutions Chapter One General Provisions Article 1. In order to facilitate domestic institutions and individuals to carry out e-commerce transactions via the Internet, regulate cross-border foreign exchange payment business through payment institutions, and guard against the risks arising from cross-border capital flows through the Internet, this Guidance is hereby formulated in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration, the Measures for the Administration of Payment Services of Non-financial Institutions, and other relevant provisions. Article 2.Cross-border foreign exchange payment business through payment institutionsrefer to the centralized receipts and payments, and relevant settlement and sales of foreign exchange funds that are involved in online cross-border payments made by payment institutions through banks to the parties of e-commerce transactions (trade in goods or trade in services). Article 3.Payment institutions providingcross-border foreign exchange payment services shall be subject to the supervision and administrationof the SAFE and its branches ("foreign exchange authorities"), and promptly submit relevant business data in accordance with relevant regulations. When serving the payment institutions, banks shall strictly examine the qualifications and business scopes of the payment institutions with reasonable diligence, refuse to handle the abnormal transactions, and ensure the prompt and accurate input of relevant data. Domestic institutions and individuals shall not obtain or transfer foreign exchange funds with fictitious transaction, or evade foreign exchange regulation by split-up. Entities engaged in cross-border e-commerce shall also comply with the laws and regulations of other relevant departments of the state. Chapter Two Application for Participation in the Pilot Program Article 4. A payment institution may join the pilot program of cross-border foreign exchange payment business after registering on the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade. Any payment institution applying for the registration on the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade shall satisfy the following requirements: (I) Holder of the Payment Business License issued by the People's Bank of China (PBC), with "online payment" included in the permitted business scope; (II) No material violation of the regulations on the RMB and foreign exchange administration in the past 2 years; (III) With a sound organizational structure, and sound business process rules and risk management systems; (IV) With the technical conditions for collecting and keeping the transaction data, and the ability to ensure the authenticity and security of the transactions. Article 5. Any payment institution applying for the registration on the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade shall present the following documents to the foreign exchange authority at the place of incorporation: (I) Written application, stating the applicant's informationsuch as name, place of incorporation, registered capital, equity structure, organizational structure, and the types and scopes of existing payment business and the cross-border foreign exchange payment business being applied for; (II)Business operation plan, including business processing procedures (specify in detail the complete procedures of transactions, exchanges and payments by business type), customer real-name system management, review of the authenticity of transactions, declaration of the balance of payments statistics, data collection and submission, system construction, data interface between system and banks, system emergency response plan, foreign exchange reserve account management, risk control related to the business conducted, internal operational rules, and compliance management; (III)The duplicates and photocopies of the Payment Business License, Business License for Enterprise as Legal Person, and Organization Code Certificate; (IV)Cooperation agreement with bank(s); (V) Other materials required by the foreign exchange authority. Article 6. The SAFE branches and foreign exchange administration departments (hereinafter referred to as the "SAFE branches") shall review the application materials submitted by the payment institutions in accordance with the Guidance, and issue official written documents to the qualified payment institutions within 20 working days and report them to the SAFE, and register the payment institutionsapplying to engage in cross-border foreign exchange payments under trade in goods on the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade. The payment institutions that have engaged in the pilot business before the implementation of this Guidance are not required to make application again. The SAFE branches at the places of their incorporation shall uniformly handle the registration for the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade. During the pilot period, any payment institution shall complete filing procedures with the SAFE branches at the place of its incorporation by presenting the operation plan or the cooperation agreement with banks in relation to the new business in case of any change to the informationsuch as business scope and opening bank for the foreign exchange reserves. Chapter Three Business Management Article 7. Any payment institution shall strictly review the authenticity of the identity information of customersto make cross-border foreign exchange payment business through it, and keep relevant information for 5 years for future reference. The information of individual customers to be kept includes but is not limited to name, nationality and valid ID number; the information of institutional customers to be kept includes but is not limited to name and organization code. Where a payment institution develops overseas merchants independently, it shall guarantee the authenticity and legitimacy of the overseas merchants in accordance with the principles of Know Your Customer, Understand Your Business, and Due Diligence. Article 8. The cross-border foreign exchange payment business shall be conducted for true and legitimate trade in goods or in services. Payment institutions shall not provide cross-border foreign exchange payment services to the following trading activities: the trade in goods or the trade in services that is not in compliance with the import and export management regulations of the state; the commodity trade without consideration generally accepted by the market, and the intangible commoditytrade with an unclear pricing mechanism and potential risks; the projects and operating activities that may endanger the state and society or harm the social and public interests; and the projects expressly prohibited by laws and regulations, or the rules and regulations of the PBC and foreign exchange authorities. Article 9. Where a payment institution participates in the pilot program of cross-border foreign exchange payment business, the amount of a single transaction shall not exceed the equivalent of USD50,000, unless otherwise provided. Where a payment institution fails to sufficiently verify the completion of transactions or fails to implement, against relevant merchants, the classified management of the enterprises on the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade in Goods in accordance with relevant regulations, the foreign exchange authority may downgrade the limit on a single transaction of the said payment institution to the equivalent of USD10,000. Article 10. A payment institution may provide centralized receipts, payments, settlement and sales of foreign exchange for customers, and restore transaction information on a transaction-by-transaction basis in accordance with the requirements of this Guidance. The payment institution shall complete the settlement and sales of foreign exchange on the first working day (T+1) following the date of receiving funds (T). The payment institution may handle net settlement provided it satisfies the requirements for restoring transaction information on a transaction-by- transaction basis. Article 11.In providing cross-border foreign exchange payment services, a payment institution shall allow its customers to make payment in RMB or self-owned foreign exchange. When a customer transfers foreign exchange to the payment institution, the bank shall require the customer to provide the materials evidencing the authenticity of online transactions, which contain information such as the transaction amount and the name of the payment institution, provide the transfer service after verifying the account name of the payment institution and the amount, and indicate the wording of "Online Cross-border Foreign Exchange Payment & Transfer" in the transaction remark. Article 12.In providing foreign exchange settlement and sales services to its customers, a payment institution shall use the posted exchange rate, and shall not change the exchange rate by itself. The payment institution shall reach prior agreements with its customers in respect of service fees and the sharing of exchange gains or losses involved in transaction refunds. Chapter Four Account Management Article 13. Any payment institution shall strictly distinguish the funds under customers’ foreign exchange reserve accounts and its own foreign exchange funds and shall not mix them for use. The payment institution shall open accounts for and use its own foreign exchange funds in accordance with the existingregulations on the administration of institutions' foreign exchange. Article 14. A payment institution shall open a foreign exchange reserve accountwith banksin accordance with the existing regulations relating to foreign exchange account management by presenting a written document evidencing the registration on the List of Enterprises Making Foreign Exchange Receipts and Payments under Trade issued by the foreign exchange authority at the place of its incorporation; the name of the account shall be ended with “PIA” (Payment Institute Account). The payment institution shall provide foreign exchange settlement and sales and cross-border payment and receipt services to customers through the foreign exchange reserve account. The reserve account management shall be in compliance with the PBC's regulations on reserve account management. Article 15. The receipts under a foreign exchange reserve account include foreign exchange transfer from the foreign exchange reserve account of the same name, a domestic payer’s transfer of foreign exchange or inward transfer of foreign exchange purchased, foreign exchange transfer from an overseas payer, and foreign exchange returnedthrough the same route and in the same currency for reasons such as transaction failure; while the payments from the account include foreign exchange transfer to a foreign exchange reserve account of the same name, transfer of foreign exchange to a domestic payee, transfer of settledforeign exchange to the RMB reserve account or the payee’s RMB account, remittance to an overseas payee, and the foreign exchange returnedthrough the same route and in the same currency for reasons such as transaction failure. Cash withdrawal or deposit, and prepayment or pre-deposit without an underlying transaction are not allowed under foreign exchange reserve accounts. However, foreign exchange transfer in accordance with regulations is acceptable between the foreign exchange reserve account of the payment institution and its own foreign exchange account for reasonssuchas operating profit or loss. Article 16.A payment institution shall open a foreign exchange reserve account with a commercial bank qualified for deposit and management of customers’ reserves. The foreign exchange and RMB reserves shall be deposited in and managed by the same bank, while the partner bank for foreign exchange reserves can be selected at its sole discretion and based on its actual needs. Article 17. The foreign exchange reserve accounts of payment institutions shall be managed in the foreign exchange account management information system, under the category “foreign exchange reserve accounts of payment institutions (1603)”, and banks shall input and report data to the foreign exchange authoritieson a timely basis. Chapter Five Information Collection Article 18. A payment institution shall submit relevant business data and information in accordance with the requirements of this Guidance, and ensure the accuracy, completeness and consistency of the data. Banks shall submit relevant information based on the data provided by payment institutions, in accordance with relevant regulations on the declaration of the balance of payments and on the submission of foreign exchange settlement and sales information. Except for the information required to be restored on a transaction-by-transaction basis, the information of other transactions shall be accurately submitted based on the information on the actual business of the banks. The transaction information involving netting shall also be submitted on a restoration basis, and the specific submission requirements shall be implemented in accordance with Articles 20, 21 and 22 under this Guidance. Article 19.In handling cross-border foreign exchange payment business, a payment institution shall acquire the true transaction information, collect the detailed data of each transaction under the principles of completeness and traceability, and keep them for future reference. The detailed data under trade in goods shall, in principle, include the name and quantity of the subject matter, transaction currency, amount, parties of transaction and countries they are from, and order time; the detailed data under trade in services shall, in principle, include the type of service, specific transaction information (such as the scheduled flight and time under air ticket, the hotel name and time of accommodation, letter of admission under overseas study, etc.), quantity, transaction currency, amount, parties of transaction and their location, and order time. Article 20. A payment institution shall declare the following two categories of data for the balance of payments statistics in accordance with the existing regulations on the declaration of foreign-related receipts and payments data: (I) data of actual receipts and payments by the payment institution during centralized receipts and payments or net settlement (hereinafter referred to as the “data of actual receipts and payments”); and (II) data of original receipts and paymentsrestoredtransaction-by-transaction prior to centralized receipts and payments or net settlement (hereinafter referred to as the “restored data”). For declaration of data of actual receipts and payments, the payment institution shall indirectly declare the balance of payments statistics according to actual transactions with banks, while the banks shall indicate the transaction code as “999999” for the actual receipts and payments, and the declaring entity as the payment institution. Where the actual receipts and payments become zero after net settlement, the payment institution shall report a virtualized transaction settled at zero, in which the names of payer and payee are the payment institution itself, the transaction code is “999998”, the nationality is “China”, and other required items are declared based on situations or as “N/A” (in capital letters). For declaration of restored data, the payment institution shall, on the same day of declaring data of actual receipts and payments, provide the datarestored transaction-by-transactionunder the principle of full receipt and full payment, and declare through banks the restored data on cross-border receipts and payments of customers actually using foreign exchange. Where the amount of customer’s single transactionrestored is below the limit for exemption from balance of payments declaration, the payment institution shall, based on the nature of actual transactions, combine the data of the transactions of same nature (i.e., with the same transaction code) into one transaction, and declare in its name the restored datatransaction by transaction after the combination. Where the amount of customer’s single transactionrestored is above the limit for exemption from balance of payments declaration, the payment institution shall declarein the names of customersthe restored data transaction by transaction. Article 21. A payment institution shall provide or fill in on a centralized basis the basic information and declaration information of restored data, in a manner determined through consultation with banks; filling in the printed declaration form is not compulsory. A domestic bank shall fill in the transaction code and transaction remarksbased on the nature of actual transactions, prepare the declaration number based on the date of actual receipt and payment, and indicate the “bank transaction number” of restored data as the declaration number of the corresponding data of centralized receipt and payment, in order to establish a correlation between the data of actual receipts and payments and the restored data. The domestic bank shall complete reporting of the basic information of the restored data prior to 12:00 at noon of the 1st working day (T+1) following the date of actual receipt and payment by the payment institution (T); and complete reporting of the declared information of the restored data prior to 12:00 at noon of the 5th working day (T+5). Article 22. A payment institution shall, in accordance with the existing regulations on foreign exchange settlement and sales, provide transaction-based information of foreign exchange purchase or settlement through a bank within the prescribed time limit, while the bank shall report the statisticsstatement of foreign exchange settlement and salesin accordance with the existing regulations. For foreign exchange settlement and sales transactions with individuals, the bank shall, based onthe data provided by the payment institution, record on a transaction by transaction basis in the Management System for Individual Foreign Exchange Settlement and Salesasingle transactionthat is worth the equivalent of USD500 and below after summation by currency and nature of transaction on behalf of the payment institution, and a single transaction that is worth theequivalent of more than USD 500 within 5working days following the date of the transaction (T+5). The payment institution shall not add the amount of foreign exchange settlement and sales to individuals under cross-border foreign exchange payment to the annual aggregate of foreign exchange settlement and sales to individuals. Article 23. A payment institution shall, by the 10th day of each month, report through the forms system to the foreign exchange authority at the place of its incorporation the total amount and number of cross-border foreign exchange payments by customers. For customers with monthly foreign exchange receipts and payments exceeding the equivalent of USD 200,000, the paymentinstitution shall report their transactions as those in a significant accumulated amount of receipts and payments. The paymentinstitution shallalso report to the foreign exchange authority on a timely basis in case of abnormalities or high risksas the transaction is being carried out. The payment institution shall submit the annual pilot summary report as required by the local SAFE branch. Chapter Six Supervision and Verification Article 24. The SAFE branches shall prudentially supervise the pilot business, and carry out offsite and onsite verifications on the foreign exchange payment business of the payment institutions under their respective jurisdiction in accordance with this Guidance and relevant regulations on foreign exchange administration. The SAFE branches at the places of the incorporation of the payment institutions shall be chiefly responsible for verifying the payment institutions. The payment institutions and their opening banks shall be obliged to cooperate with the supervision and administration of the foreign exchange authorities. Article 25. The SAFE branches may order the payment institutions to carry out self-checks of the abnormal transactions discovered during their routine monitoring. The payment institutions shall complete the self-checks in time in accordance with the requirements of the SAFE branches, and submit the self-check report. Article 26. The SAFE branches shall independently make arrangements for the onsite verifications or inspections of the payment institutions under their jurisdiction, based on the aggregate of foreign exchange payments and theratiosof business volume and business characteristics of the payment institutionsunder their jurisdiction. The contents of onsite verifications shall include but be not limited to review of the information related to the payment institutions, the authenticity of transactions, information collection and retention, and the scope of actual business. Article 27. Where a payment institution providing cross-border foreign exchange payment services fails to pass the authenticity reviewor satisfy the requirements on information collection and retention, the foreign exchange authority shall have the right to adjust the business scope and transaction limit of the payment institution or suspend its qualification for handling the cross-border foreign exchange payment business. After the payment institution make corrections, it shall be re-approved by the SAFE branch at its place of incorporation before resuming the pilot business. Article 28. The foreign exchange authorities shall punish the payment institutions that violate the relevant regulations of this Measure inhandling foreign exchange payment business, in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration and other laws and regulations, andwhere the circumstances are serious, shall disqualify them for handling foreign exchange payment business. Article 29. The Circular shall come into effect as of the date of issuance, and the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Implementing the Pilot Program of Foreign Exchange PaymentsThrough Payment Institutions for Cross-border E-Commerce (Huizongfa No.5 [2013]) shall be repealed at the same time. Article 30. This Guidance shall be construed by the SAFE. 2015-03-16/en/2015/0316/756.html
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The Decision of the State Council on the Revision of the Measures for the Collection of Statistics and Declaration of the Balance of Payments is hereby promulgated and shall be implemented as of January 1, 2014. Premier Li Keqiang November 9, 2013 Decision of the State Council on the Revision of the Measures for the Collection of Statistics and Declaration of the Balance of Payments The State Council has decided to revise the Measures for the Collection of Statistics and Declaration of the Balance of Payments (the Measures) as follows: I. Article 2 is revised as “All economic transactions between Chinese residents and non-Chinese residents and external financial assets and liabilities of Chinese residents shall be subject to the statistics and the declaration of the balance of payments.” II. Article 7 is revised as “Chinese residents and non-Chinese residents carrying out economic transactions within the territory of China shall declare the information on the balance of payments in compliance with the relevant regulations in a timely, accurate, and complete manner.” III. Articles 9 and 10 are combined into Article 9: “Institutions within the territory of China that provide services such as registration, settlement, and trusteeship, and dealers engaging in external transactions of securities, futures, and options on a self-run basis or on behalf of their clients shall declare to the State Administration of Foreign Exchange or its branches/sub-branches information about the external transactions, receipts, payments, and dividend payouts.” IV. Article 11 is revised as Article 10 which reads “Financial institutions within the territory of China shall declare their self-run external business directly to the State Administration of Foreign Exchange or its branches/sub-branches (including their external financial assets, liabilities, and their variations, profits and receipts and payments of interest, receipts and payments of external financial services, and other receipts and payments), and shall fulfill the obligations in their role as an intermediary through which Chinese and non-Chinese residents declare their statistics and the balance of payments to the relevant authorities.” V. Article 13 is revised as Article 12, which reads “Foreign-funded enterprises within the territory of China, enterprises with direct investments outside the territory of China, and other non-financial institutions with external financial assets and liabilities must declare directly to the State Administration of Foreign Exchange or its branches/sub-branches information regarding their external financial assets, liabilities, and their variations, and profits and receipts and payments of dividends and interest.” VI. An article is added as Article 13 which reads “Individual Chinese residents who have external financial assets and liabilities shall declare the relevant information about their external financial assets and liabilities in accordance with the relevant regulations of the State Administration of Foreign Exchange.” VII. Article 15 is revised as “The State Administration of Foreign Exchange or its branches/sub-branches has the right to check and verify the information declared by Chinese and non-Chinese residents; those making the declarations and the relevant institutions or individuals shall provide the relevant materials and shall make arrangements for the inspections and verifications. VIII. A paragraph is added to Article 16 as paragraph 2 which reads “Banks, dealers, and institutions that provide services such as registration, settlement, and trusteeship shall keep strictly confidential the specific declared data about which they have knowledge during the handling of the relevant business.” IX. Article 17 and 18 are combined into Article 17, which reads “Chinese and non-Chinese residents who fail to provide the statistics and declaration of the balance of payments in accordance with the relevant regulations shall be penalized by the State Administration of Foreign Exchange or its branches/sub-branches in accordance with Article 48 of the Regulations on Foreign Exchange Administration of the People’s Republic of China.” X. Article 19 is revised as Article 18, which reads “Statisticians who violate Article 16 of the Measures shall be penalized in accordance with the law. Banks, dealers, and institutions that provide services such as registration, settlement, and trusteeship that violate Article 16 of the Measures shall be investigated according to the law by the State Administration of Foreign Exchange or its branches/sub-branches regarding their legal responsibilities.” The Decision also made some adjustments and revisions to the sequence of the paragraphs and to the specific text of the Measures. The Decision will be implemented as of January 1, 2014. The Measures for the Collection of Statistics and Declaration of the Balance of Payments are revised and promulgated according to this Decision. Measures on the Collection of Statistics and Declaration of the Balance of Payments (Approved by the State Council on August 30, 1995, promulgated by the People’s Bank of China on September 14, 1995 and revised on November 9, 2013 according to the Decision of the State Council on the Revision of the Measures for the Collection of Statistics and Declaration of the Balance of Payments) Article 1 In order to improve the statistics on the balance of payments, these Measures are formulated in accordance with the Statistical Law of the People’s Republic of China. Article 2 All economic transactions between Chinese and non-Chinese residents and external financial assets and liabilities of Chinese residents shall be subject to the collection of statistics and declaration of the balance of payments. Article 3 “Chinese residents” as referred to in the Measures refer to: 1. Natural persons who have stayed in China for more than one year, with the exception of foreign and Hong Kong, Macao, and Taiwan students in the territory, medical personnel, and foreign workers in foreign embassies and consulates and their families. 2. Chinese personnel going abroad for a short period of time (who remain in foreign countries/regions for less than a year), personnel studying in foreign countries and regions, personnel seeking medical advice in foreign countries and regions, and personnel in Chinese embassies and consulates in foreign countries and regions and their family members; 3. Business entities and public institutions established in accordance with law within the territory of China (including foreign-funded enterprises and foreign financial institutions) and agencies of overseas corporations in China (excluding agencies of international organizations in China and foreign embassies and consulates in China); 4. Chinese state organs (including Chinese embassies and consulates), groups, and troops. Article 4 The Measures are applicable to all regions within the territory of China, including bonded areas and bonded warehouses within the territory of China. Article 5 The State Administration of Foreign Exchange is responsible for organizing and implementing the statistics and the declaration of the balance of payments and carrying out supervision and verification in compliance with the procedures as stipulated in the Statistical Law of the People’s Republic of China; collecting, calculating, and disclosing the information on the balance of payments and international investments; formulating and revising the detailed rules of the Measures; and compiling and issuing the declaration forms and the statistical statement on the balance of payments. The relevant government departments shall assist with the statistics and the declaration of the balance of payments. Article 6 The statistics and the declaration of the balance of payments shall follow the principle that the declaration is made by the transactional entity, with a combination of indirect and direct declarations and deal-by-deal declarations as well as regular declarations that are adopted for the statistics and the declaration. Article 7 Chinese residents and non-Chinese residents carrying out economic transactions within the territory of China shall declare the information on the balance of payments in compliance with the relevant regulations in a timely, accurate, and complete manner. Article 8 Chinese residents who carry out transactions with non-Chinese residents through domestic financial institutions shall declare the content of the transactions through the financial institutions to the State Administration of Foreign Exchange or its branches/sub-branches. Article 9 Institutions within the territory of China that provide services such as registration, settlement, and trusteeship and dealers engaging in external transactions of securities, futures, and options on a self-run basis or on behalf of their clients shall declare to the State Administration of Foreign Exchange or its branches/sub-branches information about the external transactions, receipts, payments, and dividend payouts. Article 10 Financial institutions within the territory of China shall declare their self-run external business directly to the State Administration of Foreign Exchange or its branches/sub-branches (including their external financial assets, liabilities, and their variations, profits and receipts and payments of interest, receipts and payments of external financial services and other receipts and payments), and shall fulfill the obligations in their role as an intermediary through which Chinese and non-Chinese residents declare their statistics and the balance of payments to the relevant authorities. Article 11 Chinese non-financial institutions that open accounts in China shall declare directly to the State Administration of Foreign Exchange or its branches/sub-branches any transactions conducted with non-Chinese residents through overseas accounts and the balance in their accounts. Article 12 Foreign-funded enterprises within the territory of China, enterprises with direct investments outside the territory of China, and other non-financial institutions with external financial assets and liabilities must declare directly to the State Administration of Foreign Exchange or its branches/sub-branches the information about their external financial assets, liabilities, and their variations, and profits and receipts and payments of dividends and interest. Article 13 Individuals who are Chinese residents and who have external financial assets and liabilities shall declare the relevant information about their external financial assets and liabilities in accordance with the relevant regulations of the State Administration of Foreign Exchange. Article 14 The State Administration of Foreign Exchange or its branches/sub-branches can conduct sample surveys or general surveys on the balance of payments. Article 15 The State Administration of Foreign Exchange or its branches/sub-branches has the right to check and verify the information declared by Chinese and non-Chinese residents; those making the declarations and the relevant institutions and individuals shall provide the relevant materials and facilitate the inspections and verifications. Article 16 The State Administration of Foreign Exchange or its branches/sub-branches shall keep strictly confidential the specific data that is declared and which is only to be used for the statistics on the balance of payments. Unless otherwise provided for by the law, the statisticians for the balance of payments shall not provide the specific declared data in any form to any institutions and individuals. Banks, dealers, and institutions that provide services such as registration, settlement, and trusteeship shall keep strictly confidential the specific declared data about which they have knowledge during the handling of the relevant business. Article 17 Chinese and non-Chinese residents who fail to carry out the collection of the statistics and the declaration of the balance of payments in accordance with the relevant regulations shall be penalized by the State Administration of Foreign Exchange or its branches/sub-branches in accordance with Article 48 of the Regulations on Foreign Exchange Administration of the People’s Republic of China.” Article 18 Statisticians who violate Article 16 of the Measures shall be penalized in accordance with the law. Banks, dealers, and institutions that provide services such as registration, settlement, and trusteeship that violate Article 16 of the Measures shall be investigated by the State Administration of Foreign Exchange or its branches/sub-branches regarding their legal responsibilities according to the law. Article 19 The State Administration of Foreign Exchange will formulate the Detailed Rules for Implementation of the Measures for the Collection of Statistics and the Declaration of the Balance of Payments. Article 20 The Measures shall enter into effect as of January 1, 1996. 2013-11-22/en/2013/1122/740.html
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The branches and foreign exchange administration departments of the State Administration of Foreign Exchange (SAFE) in provinces, autonomous regions, and municipalities directly under the central government; the SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and all the designated Chinese-funded foreign exchange banks, To further deepen the reform of foreign exchange administration for capital account, boost and facilitate the operations of cross-border investment funds by enterprises, standardize foreign exchangeadministration for direct investment and enhance administration efficiency, the SAFE decides to further simplify and improve the policies for foreign exchange administration for direct investment across the country, based on the experience from the preliminary pilot program conducted in some regions. Relevant issues are notified as follows: I. Canceling two administrative approval items, namely, registration and verificationof foreign exchange under domestic and overseas direct investment Banks shall, in accordance with this Circular and the Operating Guidelines for Foreign Exchange Transactions for Direct Investment (see the Appendix), directly verify and handle the registration of foreign exchange under domestic and overseas direct investment (collectively referred to as registration of foreign exchange for direct investment) , while the SAFE and its branches (collectively referred to as the foreign exchange authorities) shall conduct through banksindirect regulation over registration of foreign exchange for direct investment. (I) During the implementation of this Circular, the banks thathave obtained the financial institution identification code from the foreign exchange authorities and activated their capital account information system at theirlocal foreign exchange authorities can handle the registration of foreign exchange for direct investment directly through the capital account information system of the SAFE for domestic foreign-invested enterprises, and the domestic investment entities of overseas investment enterprises (hereinafter referred to as the relevant market entities). (II) Banks and their branches shall handle registration of foreign exchange for direct investment under the guidance of their local foreign exchange authorities, and perform the responsibilities ofverifying, statistical monitoring and reporting within their power. (III) A relevant market entity can choose a bank at the place of its incorporation for registration of foreign exchange for direct investment. After the registration, the entity is allowed to open accounts, and remit funds (including outward or inward remittance of profits or dividends), which are related to direct investment. II. Simplifyingprocedures for some transactions of foreign exchange for direct investment (I)Simplifyingregistrationmanagement for confirmation of capital contribution by a foreign investor under domestic direct investment. The registration for confirmationof non-monetary capital contribution by a foreign investorunder domestic direct investment and registration for confirmation of capital contribution by a foreign investor for acquisition of a Chinese shareholder's equity are cancelled. The registration for confirmation of monetary contribution by a foreign investor is replaced with registration for accounting entry of monetary contribution for domestic direct investment.If the foreign investor makes capital contributions in cash (including cross-border spot exchange and RMB), the opening bank can handle registration for accounting entry of monetary contribution for domestic direct investmentupon receipt of relevant capital funds directly through the capital accountinformation system of the SAFE, and the capital funds can be used only after the registration. (II) Canceling filing of foreign exchange for overseas reinvestment.Foreign exchange filing will no longer be required for overseas reinvestment for establishment of or control over another overseas enterprise by an overseas enterprise established or controlled by a domestic investment entity. (III)Canceling annual check of foreign exchange for direct investment and replacing it with registration for accumulated equity.Data on accumulated equity in domestic direct investment and/or overseas direct investment (collectively, the accumulated equity in direct investment) as at the end of the last year shall be reported through the capital account information system of the SAFE by relevant market entity itself or by an accounting firm or a bank before and on September 30 every year. The foreignexchangeauthorities shall, through the capital account information system, control the transactions of a relevant market entity thatfails to abide by the provision above andno bank is allowed to handle transactions of foreign exchange under the capital account for this entity. Only after the data have been reported as required and a letter of explanation for reasonable causes has been delivered to the foreign exchange authorities can the foreign exchangeauthorities stop control over the entity's business. Administrative penalty shall be duly imposed on entities suspected of violating regulations on foreign exchange administration. Relevant market entities, including foreign-invested enterprises participating in the sampling survey by the foreign exchange authorities on accumulated equity in direct investment, shall follow the requirements of the sampling survey system and report relevant information to theforeign exchange authorities at the place of their incorporation on a quarterly basis. III. Banks shall raise their awareness of compliance in handling registration of foreign exchange for direct investment (I) Banks shall develop internal managementregulations and systemson registration of foreign exchange for direct investment, and keep the rules for future reference. The internal management regulations and systems shall at least include the following: 1. Operating procedures for registration of foreign exchange for direct investment, including processes and standards for acceptance of transactions, compliance of documents and authenticity verification; 2. Risk control system for registration of foreign exchange for direct investment, including compliance risk review,transaction & check, andclassified review system; 3. Statistical reporting systemfor registration of foreign exchange for direct investment, including data collection channels and operating procedures. (II) Banks can voluntarily conduct business access management for registration of foreign exchange for direct investment over their branches that have obtained the financial institution identification code from the foreign exchange authorities. (III) Banks shall perform the obligation of authenticity verification in strict accordance with this Circular and the attached Operating Guidelines for Foreign Exchange Transactions for Direct Investment,handle registration of foreign exchange for direct investment through the capital account information system of the SAFE, and keep all the relevant registration documents for future reference. (IV) In handling registration of foreign exchange for direct investment, a bank shall immediately report any unspecified provisions, inaccurate data or abnormalities to the foreign exchange authority at the place of the incorporation ofa relevant market entity. IV. Foreign exchange authorities shall enhance training and guidance for, and ex post regulation of banks. (I) Foreign exchange authorities shall enhance training and guidance for, and ex post regulation of banks. They shall obtain the information on their handling of foreign exchange for direct investmentandthesubmission ofrelevant data,statements and other documents. They shall conduct ex post verification and inspection of the banks' compliance in handling foreign exchange for direct investment and their execution of the internal control system to develop a full understanding of the banks' handling of foreign exchange for direct investment. They shall immediately report abnormalities, rectify and deal withany violations. (II) In accordance with regulations on foreign exchange administration, the foreign exchange authorities shall impose punishment on any bank that fails to review, collect statistics on and report issues regarding the registration of foreign exchange for direct investment, and also may order the bank to suspend such registration. In cases that the bank seriously violate regulations or fails to effectively rectify itself during the suspension period, theforeign exchange authority may disqualify the bank for handling registration of foreign exchange for direct investment. This Circular shall come into effect on June 1, 2015. After coming into effect, this Circular shall prevail where there is a discrepancy with previous regulations.The pilot regions for the reform of foreign exchange settlement of capital of foreign-invested enterprises shall continue to implement the willingness exchange settlement policy in accordance with the Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Implementing a Pilot Program in Some Regions on Reform of Management Mode for Settlement of Foreign Exchange Capital of Foreign-Invested Enterprises (Huifa No. 36[2014]).Upon receipt of this circular, the SAFE branches and foreign exchange administration departments should immediately forward it to the central sub-branches, sub-branches, urban and rural commercial banks, foreign banks and rural cooperative banks within their respective jurisdiction, while the Chinese banks should promptly forward it to the branches within their jurisdiction. Any problems during implementation shall be reported to the Capital Account Management Department of the SAFE in a timely fashion. The State Administration of Foreign Exchange February 13, 2015 FILE: Operating Guidelines for Foreign Exchange Transactions for Direct Investment 2015-04-29/en/2015/0429/759.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and all designated Chinese-funded foreign exchange banks: To push forward with the reform on foreign exchange administration, promote trade and investment facilitation, support the growth of the real economy and guard against the risks arising from cross-border capital flows, relevant measures are notified as follows: I. The lower limits of comprehensive positions of banks in the settlement and sales of foreign exchange will be extended. For banks with the equivalent of their foreign exchange settlements and sales over USD 200 billion, the lower limit of their positions will be adjusted to USD -5 billion; for banks with the equivalent value between USD 20 billion and USD 200 billion, the lower limit of their market-making positions will be adjusted to USD -2 billion while that of the non-market-making positions, USD -1 billion; for banks with the equivalent value between USD 1 billion and USD 20 billion, the lower limit of their market-making positions will be adjusted to USD -500 million while that of their non-market-making positions, USD -300 million; for banks with the equivalent value between USD 100 million and USD 1 billion, the lower limit of their positions will be adjusted to USD -200 million; for banks with the equivalent value below USD 100 million and those recently obtaining the qualification for foreign exchange settlements and sales, the lower limit of their positions will be adjusted to USD -50 million. These adjustments shall become effective following the issuance of this Circular. II. The approach to the delivery of forward transactions for foreign exchange settlement will be diversified. When providing forward foreign exchange settlement services to institutional customers, banks may choose full or net settlement at their own discretion as a way of delivery, in conformity with the principle of satisfying actual needs. The currency and reference rate for the net forward settlement of foreign exchange are subject to the foreign exchange administration provisions on options. III. The administration of foreign exchange receipts from trade in goods will be simplified for Class-A enterprises. The foreign exchange receipts by Class-A enterprises from trade in goods (other than foreign exchange refunds and offshore entrepot transactions) will temporarily not be recorded in the accounts pending verification for receipts from exports, but will be directly recorded in the foreign exchange accounts under the current account or settled. IV. Policies for the administration of foreign exchange settlement for the external debt of Chinese and foreign-funded enterprises will be unified, with the foreign debt of by Chinese non-financial institutions subject to foreign exchange settlement in accordance with the provisions on external debt administration for foreign-funded enterprises. V. The administration of foreign exchange receipts and payments will be standardized for offshore entrepot transactions for trade in goods. When providing receipt and payment services to enterprises for offshore entrepot transactions, banks shall verify the contract, invoice, authentic and valid documents of title including shipping bill, bill of lading and warehouse receipt of each transaction, to ensure the authenticity, compliance and reasonableness of the transactions. The receipt and payment of the same offshore entrepot transaction shall be processed by the same outlet of the bank in the same currency (foreign currency or RMB). The receipts and payments for offshore entrepot transactions for Class-B enterprises subject to foreign exchange administration for trade in goods will be suspended. VI. The outward remittance administration will be standardized for foreign exchange profits from direct investments. For outward remittances of the profit equivalent of more than USD 50,000 (exclusive) by domestic institutions, banks shall review the relevant board resolution (or the partnership resolution) on profit distribution, the original copies of tax return forms and the financial statements evidencing the profits, in accordance with the principle of authentic transactions. In each outward profit remittance transaction, banks shall affix seal and endorsement to the original copies of the relevant tax return forms indicating the actual amount and date of the transaction. VII. The measures for the administration of risk reminder notifications will be standardized for trade in goods. The SAFE and its branches and sub-branches (foreign exchange authorities) may send a risk reminder notification (see the Appendix) to enterprises with significant mismatch between capital flows and goods flows or with significant one-way capital flows, requiring them to give explanations within 10 working days. For enterprises failing to give timely explanation or to provide supporting documents and give reasonable explanations, foreign exchange authorities may classify them into Class-B enterprises subject to rigorous regulations, in accordance with Article 55 under the Implementation Details of the Guidance on Foreign Exchange Administration for Trade in Goods. Such Class-B enterprises can be classified as Class-A enterprises provided that their relevant indicators remain normal for 3 consecutive months. VIII. Any companies violating this Circular will be punished by foreign exchange authorities in accordance with the Regulations on Foreign Exchange Administration. IX. The Circular shall take effect as of the date of promulgation. Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening Administration of Inflows of Foreign Exchange Funds (Huifa No. 20 [2013]) shall be abolished simultaneously. For the previous regulations such as the Circular of the State Administration of Foreign Exchange Concerning Printing and Distributing the Provisions for Foreign Exchange Administration of Trade in Goods (Huifa No. 38 [2012]), Circular of the State Administration of Foreign Exchange on Promulgating the Measures for Administration of External Debt Registration (Huifa No. 19 [2013]), the Circular of State Administration of Foreign Exchange on Printing and Distributing of the Regulations for Foreign Exchange Administration on Trade in Services (Huifa No. 30 [2013]), the Circular of the State Administration of Foreign Exchange on Further Improving and Adjusting the Policies for Foreign Exchange Administration under the Capital Account (Huifa No. 2 [2014]), the Circular of the State Administration of Foreign Exchange on Abolishing and Revising Relevant Regulatory Documents Involving the Reform on Registered Capital Registration System (Huifa No. 20 [2015]), if there is any discrepancy between the above regulations and this Circular, this Circular shall prevail. On receiving this Circular, all SAFE branches and foreign exchange administrative departments shall transmit it in a timely manner to the central sub-branches, sub-branches, and designated foreign exchange banks under their administration, and implement it earnestly. Appendix: Risk Reminder Notification by XX Branch (Sub-Branch) of the State Administration of Foreign Exchange State Administration of Foreign Exchange April 26, 2016 FILE: Risk Reminder Notification by XX Branch (Sub-Branch) of the State Administration of Foreign Exchange 2016-07-11/en/2016/0711/779.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government, and the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, To further improve the capabilities of declaring the balance of payments statistics, and intensify trade credit investigation, the SAFE has integrated the existing regulatory requirements on trade credit into the Trade Credit Survey System (see the Appendix) in accordance with the Statistics Law of the People's Republic of China, the Regulations of the People's Republic of China on Foreign Exchange Administration (Decree No. 532 of the State Council), and the Measures for the Declaration of Balance of Payments Statistics (Decree No. 642 of the State Council). This System is now issued to you, along with the following notification: I. This System will come into force on August 1, 2016. The data for July 2016 shall be reported at first. II. Further details of this System, including the reporting methods of relevant data and the system requirements, will be notified separately. III. The Circular of the State Administration of Foreign Exchange on Printing and Distributing the Trade Credit Survey System and the Implementation Plan for Trade Credit Survey (Huifa No. 67 [2004]), the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Adjustments to the Sampling Survey Report for Trade Credit and the Use of the Trade Credit Sampling Survey System for Data Submission (Huizongfa No. 12 [2009]), the Circular of the Balance of Payments Department of the State Administration of Foreign Exchange on Conducting Trade Credit Surveys At End-June 2010 (Huiguofa No. 8 [2010]), the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Expanding the Scope of Regions for Trade Credit Survey and Increasing the Frequency of Survey (Huizongfa No. 28 [2011]) and the Circular of the Balance of Payments Department of the State Administration of Foreign Exchange on Start Using the New Version of Trade Credit Sampling Survey System (Huiguofa No. 17 [2012]) will be nullified simultaneously. IV. Upon receipt of this Circular, all branches and foreign exchange administrative departments of the SAFE shall forward it to the central sub-branches, sub-branches and reporting entities within their jurisdictions, and organize education and training for the reporting entities within their respective jurisdiction. Please report any problems encountered in the implementation to the SAFE in time. The contact number of the SAFE Balance of Payments Department is 010-68402377/ 010-68402489。 Appendix: Trade Credit Survey System State Administration of Foreign Exchange January 11, 2016 FILE: Trade Credit Survey System 2016-02-14/en/2016/0214/777.html
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The branches and foreign exchange administration departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government, and the SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, the insurance group (holding) companies, the insurance companies, the insurance asset management companies and the designated China-funded foreign exchange banks: To further advance administration streamlining and power delegation, and improve foreign exchange administration for the insurance business,, the State Administration of Foreign Exchange (SAFE) has formulated the Guidelines for Foreign Exchange Administration for Insurance Business (hereinafter referred to as the Guidelines, see the Appendix), which shall come into force on March 1, 2015. These documents are hereby circulated to you for execution and relevant issues are notified as follows: I. Connection after delegation of the administrative permission verification power. The Foreign Exchange Business License previously granted can be used during its validity by an insurance company or an insurance group (holding) company until its expiry. In case that the continuous operation of insurance business in foreign exchange is required, the qualification for foreign exchange business shall be applied for in accordance with the Guidelines at least 30 working days prior to the expiry of the Foreign Exchange Business License; in case that the continuous operation of foreign exchange insurance business is not required after the expiry, the Foreign Exchange Business License shall be presented to the local SAFE branch or foreign exchange administration department, to automatically terminate the foreign exchange insurance business. II. An insurance company, insurance group (holding) company and insurance asset management company, which has not registered for direct foreign exchange investment prior to this Circular, shall promptly undergo foreign exchange registration procedures with its local SAFE branch or the processingbank in accordance with relevant provisions. III. For ex post administration and monitoring, all the SAFE branches and foreign exchange administration departments shall conducta comprehensive checkupand verification of the foreign exchange accounts of the insurance companies, the insurance group (holding) companies and the insurance asset management companies within their jurisdiction, so as to ensure the accurate reporting of the account information as required. IV. Upon receipt of this circular, the SAFE branches and foreign exchange administration departments should immediately forward it to the central sub-branches (sub-branches), local commercial banks, and foreign banks within their respective jurisdiction, while the insurance companies and the designated China-funded foreign exchange banks should promptly forward it to their branches. V. After coming into effect, this Circular shall prevail where there is a discrepancy with previous regulations. If you have any questions during the execution of these documents, please promptly contact the Current Account Management Department of the SAFE. Appendix: Guidelines for Foreign Exchange Administration for Insurance Business State Administration of Foreign Exchange January 9, 2015 FILE: Guidelines for Foreign Exchange Administration for Insurance Business FILE: Appendix 1 FILE: Appendix 2 2015-04-02/en/2015/0402/757.html
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The branches and administrative departments of the State Administration of Foreign Exchange (SAFE) in various provinces, autonomous regions, and municipalities directly under the Central Government, the SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, and nationwide Chinese-funded banks: To standardize currency exchange agencies and self-service currency exchange machines with respect to the currency exchange business, the State Administration of Foreign Exchange (SAFE) has formulated the Regulations on Management of Currency Exchange Agencies and Self-service Currency Exchange Machines ("Regulations", see the appendix), which are hereby issued for your compliance and implementation. I. The Regulations shall come into force as of the date of issuance. The Circular of the State Administration of Foreign Exchange on Improving Foreign Exchange Administration of Currency Exchange Agencies (Huifa No. 48 [2007]) and the Circular of the State Administration of Foreign Exchange on Further Improving the Individual Currency Exchange Business (Huifa No. 24 [2008]) are hereby abolished. For any discrepancies between the Regulations and previously issued provisions, the Regulations shall prevail. II. The provisions on amount management under Article 7 and 15 of the Regulations and the provisions on adjustment of the authorization agreements between banks and currency exchange agencies in accordance with the Regulations will come into force as of November 1, 2016. Upon receipt of this Circular, the SAFE branches and foreign exchange administration departments should immediately forward it to the central sub-branches (sub-branches), local Chinese-funded banks, foreign-funded banks and franchised individual currency exchange agencies within their respective jurisdiction, and the Chinese-funded banks should promptly forward it to the branches under their jurisdictions. For any problems arising from implementation, please contact the Department of the Balance of Payments of the SAFE in a timely manner. Tel.: 010-68402399, 68402313. Appendix: Regulations on Management of Currency Exchange Agencies and Self-service Currency Exchange Machines State Administration of Foreign Exchange May 19, 2016 FILE: Regulations on Management of Currency Exchange Agencies and Self-service Currency Exchange Machines 2016-07-11/en/2016/0711/778.html
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The branches and foreign exchange administration departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government, and SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, branches of the China Insurance Regulatory Commission (CIRC), all insurance companies and designated China-funded foreign exchange banks: To further advance administration streamlining and powerdelegation, deliver a good performance in foreign exchange administration for the insurance business, the SAFE and the CIRC hereby declare invalid the Circular of the State Administration of Foreign Exchange and the China Insurance Regulatory Commission on Release and Implementation of the Interim Regulations for Foreign Exchange Administration for Insurance Business (Huifa No. 95 [2002]) This Circular shall take effect on March 1, 2015. State Administration of Foreign Exchange China Insurance Regulatory Commission January 7, 2015 2015-04-02/en/2015/0402/758.html
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FILE: Catalogue of Major Existing Laws аnd Regulations in Effect on Foreign Exchange Administration (as of December 31,2014) 2015-02-09/en/2015/0209/755.html