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Recently, a summary and commendation conference on struggling against illegal and criminal foreign exchange activities in 2009 was held by the State Administration of Foreign Exchange (SAFE) and the Ministry of Public Security (MPS) in Zhuhai city of Guangdong province. The conference summarized progress by the SAFE and the MPS in cracking down on illegal and criminal activities in foreign exchange transactions, such as underground money shops, online foreign exchange speculation, and so forth, commended advanced organizations and individuals that performed outstandingly in struggling against such illegal and criminal activities, and devised a plan for relevant work regarding cracking down on illegal and criminal foreign exchange activities in 2010. Deng Xianhong, deputy administrator of the SAFE and Han Hao, deputy director-general of the Economic Crimes Investigation Department of the MPS, attended the conference and delivered speeches. In recent years, the foreign exchange administration departments and public security organs in various regions have attached priority to efforts to crack down on underground money shops, online foreign exchange speculation, and other illegal and criminal activities involving foreign exchange transactions, and have launched a battery of special collaborative campaigns to combat the above activities by making full use of their respective roles and strengths. A series of significant cases were investigated, which considerably frightened criminals and preserved normal order in the states administration of financial and foreign exchange affairs. Statistics show that in 2009 the foreign exchange administration departments and public security organs in various regions successfully uncovered 11 cases of underground money shops, 8 cases of online foreign exchange speculation, 11 cases of illegal foreign exchange transactions, and ferreted out more than 51 nests of illegal foreign exchange transactions, involving a total amount of more than RMB30 billion. The conference commended 26 advanced organizations and 63 individuals that had exhibited outstanding performance in cracking down on illegal and criminal foreign exchange activities in 2009, such as underground money shops and online foreign exchange speculation, and called on other foreign exchange administration departments and public security organs in various regions to learn from them. Meanwhile, the conference noted that the commended organizations and individuals should guard against arrogance and in the future should try even harder to achieve new progress in struggling against underground money shops, online foreign exchange speculation, and other illegal and criminal foreign exchange activities. It was pointed out at the conference that at present there are considerable uncertainties regarding the recovery of the global economy and the Chinese economy still faces many difficulties and challenges for sound development. These challenges will expose China to a more complicated situation in terms of cross-border fund flows and will place greater pressures and require even greater responsibility to strengthen supervision of cross-border fund flows. It is particularly important that in 2010, as the growth of foreign trade exports is beginning to be restored and the pace of foreign direct investment is likely to accelerate, there will be an increasing likelihood that overseas short-term arbitrage funds will flow into China through various channels. All these factors will impose greater pressures on net inflows of foreign exchange. The conference made plans to continue the struggle against illegal and criminal activities in foreign exchange transactions in 2010. The foreign exchange administration departments and public security organs in various regions will be required to make the most of their respective roles and advantages and to follow tips about significant illegal and criminal cases regarding foreign exchange transactions in a timely manner. The SAFE and the MPS will provide guidance and supervision over key cases of illegal and criminal foreign exchange activities. The foreign exchange administration departments and public security organs in various regions will be required to collaborate with the relevant departments to simultaneously crack down on and prevent illegal activities, to cleanse the market environment, to launch focused rectification campaigns in areas and places within their respective jurisdictions with frequent occurrences of illegal and criminal foreign exchange transaction activities, and to limit the space for the propagation of underground money shops and other illegal and criminal foreign exchange activities. These administration departments and organs will be required to actively disseminate information about the dangers of illegal and criminal foreign exchange activities, such as underground money shops, via various media. and to appeal for efforts by the masses to carry out foreign exchange transactions via legal channels. It was emphasized at the conference that in 2010 the foreign exchange administration departments and public security organs in various regions should further raise awareness and enhance a sense of responsibility and urgency for cracking down on illegal and criminal foreign exchange activities, such as underground money shops, online foreign exchange speculation, and so forth, by making full use of the cooperative strengths of the various departments in an effort to maintain normal financial order and social stability of the state. Intensified efforts should be made to crack down on such illegal and criminal activities with the aim of making new contributions to the preservation of the economic and financial security of the state as well as building a harmonious society. 2010-02-12/en/2010/0212/919.html
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In order to harshly crack down on the inflow of "hot money" and other abnormal cross-border funds, as well as to preserve the economic and financial security of the nation, since February 2010 the SAFE has launched a special campaign in 13 provinces (municipalities) with a relatively large volume of foreign exchange business to deal with and combat the inflow of "hot money." Well-targeted efforts were made to investigate and punish the inflow of "hot money" by major entities through the main channels. So far the current phase of the work, i.e., field inspections, has wrapped up by following a specified plan of action. A number of typical cases and entities involved in illegal foreign exchange activities have been uncovered and confirmed, with satisfactory results reached for the current phase of the special campaign. During the special campaign, 3.47 million cases of cross-border foreign exchange transactions were examined through off-site inspections, involving a total of more than USD440 billion. So far 190 cases suspected of having violated foreign exchange regulations have been confirmed, involving a total amount of USD7.35 billion. Among these cases, 6 cases, involving more that USD27 million, have been closed. A number of other clues still need to be followed. Efforts have been made to further improve the inspection methods. In the off-site inspections during the early stage of the campaign in particular, comparison and analysis of supervisory data were conducted using electronic approaches to obtain relevant clues before further verifications were conducted in a well-targeted manner, thus ensuring smooth operations of trade and investment activities by most exchange-related entities. It is preliminarily indicated by the data obtained from the special campaign that cross-border capital flows and foreign exchange receipts and payments are on the whole legitimate and in compliance with the relevant regulations, and no massive and intentional inflow of "hot money" has been discovered. Much of the inflow of "hot money" in breach of the regulations tends to be disguised by many smaller deals characterized by multiple channels and gradual infiltration. The major channels mainly involve traditional fields of trade and investment, such as trade, trade in services, foreign direct investment, banking, and individual transactions. It was discovered that a few commercial banks fail to strictly abide by the relevant regulations, and in some cases even accommodate the operating entities to evade foreign exchange supervision. In terms of the fields to which the "hot money" is headed, some hot money becomes involved in financing activities beyond the scope of business, and some flows into lucrative fields such as the real estate sector either directly or in a roundabout manner. With regard to the next stage of the work, the SAFE will continue to inspect relevant clues for cases. Meanwhile, concentrated efforts will be made to ascertain cases in breach of the regulations, and to settle these cases in accordance with the law. As to new developments and problems surfacing during the inspections, proactive efforts will be made to enhance coordination with relevant departments so as to bring a supervisory synergy into full play and to enhance the relevance and effectiveness of the battle against the inflow of "hot money". 2010-05-25/en/2010/0525/931.html
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Recently, a meeting was held by the State Administration of Foreign Exchange (SAFE). The meeting summarized the work regarding foreign exchange administration under the current account in 2009 and established the plan for foreign exchange administration under the current account in 2010. In 2009 the SAFE put into practice the scientific outlook on development in an all-round manner for the administration of foreign exchange under the current account. Great efforts were made to promote the facilitation of trade, to enhance the investigation, monitoring, and analysis of foreign exchange administration under the current account, to further improve the off-site supervision mechanism for foreign exchange administration under the current account, and to actively guard against the risks brought about by cross-border fund flows. A wide array of measures was launched to promote the facilitation of trade. For example, with the aim of easing the pressures on the working funds of export enterprises to better combat the international financial crisis, enterprises with financial pressures were allowed to conduct the foreign exchange settlement prior to the foreign exchange verification and examination in an effort to progressively increase the proportion of foreign exchange collection for the processing trade; efforts were made to further standardize the administration of submission of tax certificates for foreign exchange payments to foreign countries and to facilitate foreign exchange payments to foreign countries under trade in services by institutions and individuals. Measures were also launched to improve foreign exchange administration under the current account and conscientiously guard against the risks brought about by cross-border fund flows. Such measures include the enhancement of administration of spin-offs for the settlement and sale of foreign exchange, the standardization of foreign exchange settlement by individuals by holding cash in foreign currencies, the standardization of administration of foreign exchange by domestic institutions for donation purposes, and so forth. While facilitating the receipt and payment of foreign exchange for donation purposes, emphasis was placed on the prevention of cross-border flows of abnormal funds through donation channels. The meeting set out the plan for the major tasks regarding foreign exchange administration under the current account for 2010, placing an emphasis on six key areas: (1) to carry out the reform of the verification and writing-off of exchange payments for imports, with the aim of freeing the majority of enterprises that follow normal procedures from the verification and writing-off procedures for their exchange payments for imports; in the meantime, to proceed with the reform of the verification and writing-off system for exchange collection from exports, so as to further promote the facilitation of trade; (2) to carry out pilot operations for the deposit of exchange collections from exports in overseas countries and regions by giving a green light to overseas deposits and operation of a certain proportion or the full amount of foreign exchange collection from exports by domestic institutions, with the aim of increasing the efficiency of the use of funds by enterprises; (3) to proceed with the reform of the foreign exchange administration for trade in services; to enhance examination of the authenticity of foreign exchange inflows under trade in services and to standardize the administration of foreign exchange inflows under trade in services in parallel with efforts to further facilitate normal external payments under trade in services; (4) to study and promote the reform of the foreign exchange account administration, and to emphasize the acceleration of construction of relevant policies, regulations, and business systems; (5) to improve the administration of foreign exchange transactions by individuals, to improve the administration of the online inspection of foreign exchange collections and settlements from exports and the administration of transit trade and sales-after-imports businesses, in order to effectively guard against the risks brought by the inflow of abnormal cross-border funds; (6) to intensify efforts to explore and improve off-site supervision of foreign exchange fund flows, to give full play to the role of the rapid feedback mechanism for trade in goods, trade in services, and foreign exchange receipts and payments by individuals, to enhance statistical analysis and monitoring and early warning of foreign exchange fund flows, and to enhance the level of off-site supervision of foreign exchange administration under the current account. 2010-03-19/en/2010/0319/921.html
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Recently, Yi Gang, deputy governor of the People's Bank of China (PBOC) and administrator of the State Administration of Foreign Exchange (SAFE), conducted a field survey in Zhongguancun with his entourage. Zhao Fengtong, member of the Standing Committee of the Beijing Municipal Party Committee, Liu Zhi, deputy secretary general of the Beijing Municipal Government, and Wang Hong, director- general of the Financial Work Bureau of Beijing Municipality, participated in the survey. Yi Gang conducted the field survey in some enterprises in Zhongguancun and held informal discussions with relevant persons-in-change from the Zhongguancun Management Committee and representatives from Zhongguancun enterprises. Guo Hong, director of the Zhongguancun Management Committee, presented an overview of progress in constructing a national independent innovation demonstration zone in Zhongguancun, and proposed policy recommendations on foreign exchange administration, based on the development situation in Zhongguancun. In 2009, the State Council approved construction of a national independent innovation demonstration zone in Zhongguancun, said Zhao Fengtong. Meanwhile, a number of pilot policy measures were specified for Zhongguancun's development in terms of equity incentives, technological and financial innovations, and so forth. The development of Zhongguancun has received vigorous support from the foreign exchange administration departments for a long time. It is hoped that Zhongguancun will continue to serve as a test field site for foreign exchange administration to support innovative development, and will be allowed to carry out trial operations in the area of foreign exchange administration so as to effectively explore its demonstrative role for other regions nationwide. Yi Gang expressed congratulations to the Zhongguancun Management Committee for the impressive achievements made in Zhongguancun. He pointed out that armed with effective mechanisms, efficient systems, a tremendous talent pool, and technological advantages Zhongguancun will be able to serve as an important source for national development and innovation. The foreign exchange administration departments will continue to provide vigorous support to Zhongguancun. Yi Gang gave a briefing on the current foreign exchange situation and said that the SAFE will earnestly investigate problems raised by enterprises during this survey and will provide differentiated solutions to address the various issues. In addition to safeguarding the security of the macro-economy and the financial stability of the nation, said the Administrator, based on the actual needs of economic development, the SAFE will constantly reform its mechanisms and systems, innovate administration methods, improve administration approaches, make great efforts to promote the facilitation of trade and investment, and play a greater role to meet the needs of national economic development. 2010-06-01/en/2010/0601/932.html
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Recently, a meeting was held by the State Administration of Foreign Exchange (SAFE) to plan for the administration of foreign exchange under the capital account in 2010. Li Chao, deputy administrator of the SAFE, attended the meeting and delivered a speech. Li Chao pointed out that in 2009, in the face of the complex economic and financial situations both at home and abroad, the SAFE conscientiously put into practice the scientific outlook on development for the administration of foreign exchange under the capital account. In compliance with the overall planning for sustaining growth, preventing risks, and promoting an equilibrium in the balance of paymentsfor foreign exchange administration, constant efforts were made to enhance the level of foreign exchange services and administration, to build a two-way mechanism for cross-border capital flows, to improve the statistical monitoring of cross-border capital flows, and to enhance policy research for future implementation. These played an important role in coping with the international financial crisis and promoting the equilibrium in the balance of payments. According to Li Chao, in 2010 the foreign exchange administration departments should focus their efforts on the five transformationsfor the administration of foreign exchange under the capital account. Equal emphasis should be placed on the reform of administration and the monitoring of capital flows. With respect to the reform, major efforts should be devoted to promoting the facilitation of trade and investment. The foreign exchange administration departments at all levels will be required to further emancipate their minds, to transform the methodology of administration, and to continue to promote the convertibility of the capital account in a progressive manner. With regard to the monitoring of capital flows, the foreign exchange administration departments will be required to emphasize the fundamental importance of enhancing the level of monitoring and analysis of cross-border capital flows for the transformation of administration. Efforts should be made to sum up the experiences from the monitoring of cross-border fund flows at earlier stages and to establish and perfect the system for the monitoring of cross-border fund flows under the capital account. The foreign exchange administration departments at all levels should enhance their capabilities to identify new circumstances, new trends, and new problems in a timely manner, strengthen their capability to crack down with high precision on abnormal fund flows, thus obtaining an in-depth comprehension of the new circumstances and trends, improving the level of foreign exchange administration, and optimizing services. 2010-03-15/en/2010/0315/920.html
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For the purpose of further encouraging business innovation in banks as well as facilitating individual foreign exchange settlement and sales, the State Administration of Foreign Exchange (SAFE) recently approved that three commercial banks, i.e., the Bank of China, the China Merchants Bank, and the Industrial and Commercial Bank of China, will conduct pilot operations for individual foreign exchange settlement and sales business through e-banking. The Measures for Individual Foreign Exchange Administration and the detailed rules which took effect in February 2007 allow individuals to carry out foreign exchange purchase and settlement businesses within their yearly quota at bank counters by presenting their valid identity documents. Such pilot operations for individual foreign exchange settlement and sales business via e-banking will provide individuals with more efficient and convenient channels to handle the relevant businesses. Domestic individuals are allowed to conduct non-operational foreign exchange settlement and sales business under the current account within their yearly quota via e-banking or via self-service terminals after opening an account at the pilot banks by presenting their valid resident identification cards of the Peoples Republic of China. This will increase the banksefficiency in handling business and help ease pressures at bank counters and reduce bank costs. By using the data information-sharing mechanism that connects the e-banking system with the Management Information System for Foreign Exchange Settlement and Sales by Individuals, relevant information about foreign exchange purchases and settlement by domestic individuals in the e-banking system will be transmitted automatically in a real-time manner to the Management Information System for Foreign Exchange Settlement and Sales by Individuals, and will be incorporated into the management of the yearly quota of foreign exchange settlement and sales by individuals. The SAFE will closely track and monitor the status of the pilot operations, sum up the experiences from the pilot operations, guard against inflows and outflows of abnormal foreign exchange funds via individual e-banking channels, and continue to maintain a standardized and orderly foreign exchange market. 2010-04-23/en/2010/0423/928.html
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In order to regulate the receipt and payment of donations in foreign exchange, the State Administration of Foreign Exchange (SAFE) has promulgated the Circular of the SAFE on Relevant Issues Concerning the Administration of Donations in Foreign Exchange by Domestic Institutions (hereinafter referred to as the Circular). The Circular shall enter into force as of March 1, 2010. The Circular includes the following main issues: (1) Different methods are adopted for administration according to the different characteristics of the domestic institutions in order to facilitate donations in foreign exchange by foundations, social organizations, and other domestic institutions engaging in public welfare undertakings, and to regulate the receipt and payment of donations between domestic enterprises and overseas entities with different characteristics; (2) The procedures for the receipt and payment of donations in foreign exchange by domestic institutions shall be standardized. It is specified that a separate foreign exchange account shall be opened for the receipt and payment of donations in foreign exchange by domestic institutions, through which all receipts and payments thereof shall be processed; and (3) The SAFE shall carry out off-site supervision of the receipt and payment of donations in foreign exchange by domestic institutions via its information system. Promulgation of the Circular will facilitate the procedures for domestic institutions to handle donations in foreign exchange and to standardize the receipt and payment of such donations, therefore promoting the prevention of cross-border flows of abnormal funds by way of donations. 2009-12-30/en/2009/1230/914.html
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November 26, 2007 -- Ms. Hu Xiaolian, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange (SAFE), recently conducted research and investigation in Guangdong province on the implementation of the guiding principles of the Seventeenth National Congress of the CPC, the enhancement and improvement of foreign exchange management, and the promotion of an equilibrium in the balance of payments. During her research and investigation, Hu and her colleagues held symposia with the Guangdong branch and some central sub-branches of the SAFE, and paid visits to locally designated foreign exchange banks and enterprises. Guangdong province, with its developed export-oriented economy, ranks top in China in terms of its foreign trade and utilization of foreign capital; in particular, its foreign exchange business accounts for one-third of the state's total. Hu listened carefully to analyses on the current situation of foreign trade, foreign capital, and foreign exchange receipts and payments, with a focus on the administration of foreign exchange in trade, foreign capital and external debts, and overseas investment, the attack on underground money shops, and so on. In order to facilitate the production and operation of foreign trade enterprises and to effectively monitor the foreign trade activities and the authenticity of foreign exchange receipts and payments, foreign exchange administrative departments have carried out systematized administration over the import and export enterprises. Guangdong branch has employed a "Dynamic Monitoring and Managing System for Foreign Exchange Inflows" in regions under its governance, and has greatly enhanced the efficiency of systematized administration. While inspecting the results of the application of this system, Hu expressed great affirmation and appreciation for the innovative work of the Guangdong and Shenzhen branches. She pointed out that the introduction of this system can enable real-time tracking of the match between foreign exchange receipts and payments of enterprises and their foreign trade activities, as well as enhance monitoring efficiency. On this basis, follow-up monitoring work should be strengthened to urge enterprises to handle foreign exchange receipts and payments in accordance with the laws and regulations and to correct problems in a timely manner. Furthermore, those enterprises experiencing a serious conflict between capital flows and the actual situation of import and export activities should be listed as "highlighted enterprises" for intensified pre-supervision. In recent years, the foreign exchange administrative departments of Guangdong province, in close cooperation with the public security agencies, have reinforced efforts to crack down on underground money shops and illegal foreign exchange transactions, and have destroyed many such shops and dens. Hu specified that cases of underground money shops should be treated with different measures according to the specific situations, and both guidance and punishment should be adopted. Cooperation with the public security agencies should be continuously promoted to strongly fight against those conducting illegal activities such as gambling, smuggling, tax evasion, and money laundering through underground money shops. The quality and level of financial services should be earnestly improved to enhance the competitiveness of business procedure fees, timeliness, and so on. Further reforms should be advanced in order to keep pace with the times, to meet demands for the holding and utilization of foreign exchange by domestic institutions and residents, and to loosen controls on individual foreign investments in an orderly, controllable, and moderate manner. Publicity and education should be strengthened so as to enhance the law-abiding consciousness of domestic institutions and residents to handle foreign exchange business through formal financial institutions. When visiting the designated foreign exchange banks and enterprises, Hu expressed appreciation for their cooperation with the foreign exchange administration. Meanwhile, she pointed out that supervision of China's current foreign exchange administration is mainly carried out through subrogation by designated foreign exchange banks, so the banks should, while offering high- quality services to customers, adhere to the relevant regulations on foreign exchange administration, balance appropriately among management, competition, and profits, and thus contribute to the economic and financial security of the state. Hu emphasized that the foreign exchange administrative departments at all levels should study and carry out the guiding principles of the Seventeenth National Congress of the CPC, earnestly unify their thoughts with the spirit of the CPC Central Committee, consider the actual situation of foreign exchange administration, fully implement the scientific development concept, and promote an equilibrium in the balance of payments. 2007-11-26/en/2007/1126/861.html
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In order to strengthen supervision of cross-border capital flows, perfect examination of the authenticity and conformity of export transactions and foreign exchange collection and settlement, the State Administration of Foreign Exchange (SAFE), the Ministry of Commerce, and the General Administration of Customs (GACC) recently jointly promulgated the "Measures for the Online Inspection of Foreign Exchange Collection and Settlement of Export Proceeds" (hereinafter referred to as "the Measures"), and decided to implement management of online inspection of foreign exchange collection and settlement of export proceeds beginning from July 14, 2008. The SAFE also published the "Notice on Issues regarding Implementation of the Measures for the Online Inspection of Foreign Exchange Collection and Settlement of Export Proceeds." Implementation of online inspection of foreign exchange collection and settlement of export proceeds will check on conditions regarding foreign exchange collection and settlement of export proceeds of enterprises under the condition that their exported goods go through customs, with a view to effectively determining the actual trade background of capital flows under the item of trade in goods so as to ensure the authenticity and conformity of exports and foreign exchange collection and settlement. The Measures stipulate that the foreign exchange collected by an enterprise from exports (including the advance receipts) shall first be put into a to-be-checked account for foreign exchange collected from exports. When an enterprise sells or transfers foreign exchange from the to-be-checked account, the bank shall log onto the online inspection system for foreign exchange collection and settlement of export proceeds and make a note regarding the receivable amount of foreign exchange under the corresponding trade category in the inspection system. The online inspection system for foreign exchange collection and settlement of export proceeds was established by the SAFE, the Ministry of Commerce, and the General Administration of Customs, relying on the China E-port and drawing on the successful experience of online inspection of import payments in foreign exchange in 1998. The online inspection system uses electronic information networking to replace the traditional paper vouchers and certificates to check and supervise foreign exchange collection and settlement under the item of trade in goods. This approach is convenient for banks and enterprises in terms of operations, saving them considerable time, raising efficiency, and also improving regulatory efficacy. In order to continue providing conveniences for legal and standardized operations of trading activities for enterprises, adequate consideration will be given to the different features of each trading category and each industry by providing differential treatment in identifying the corresponding relationship between authenticity and conformity between exports and foreign exchange collection and settlement. To facilitate implementation of the online inspection system for foreign exchange collection and settlement of export proceeds, to perfect statistical supervision of the external debt, to restrict the scale of the short-term external debt, the SAFE simultaneously released the "Circular on Issues concerning Implementation of External Debt Registration and Management under the Item of Corporate Trade in Goods," mandating registration and management of corporate export advance receipts and import deferred payments. Strengthening of the follow-up monitoring of the advance receipts and prospective actual exports is necessary to prevent capital without a real trade background from flowing into China through trade channels to obtain speculative income, while the improvement in the supervision and management of import deferred payments is conducive to controlling potential debt risks and preventing huge capital outflows in the future. While strengthening management of trade credits, the administration will give adequate consideration to the actual needs of special industries and enterprises, such as large complete-sets of equipment and the shipping industry. The online inspection system for foreign exchange collection and settlement of export proceeds will run on a trial basis as of July 14, 2008 and will be put into formal operation as of August 4, 2008. Registration of export advance receipts and import deferred payments will be implemented as of July 14, 2008 and October 1, 2008 respectively. Enforcement of the above two policies will further perfect the methods for inspecting the authenticity of trade in goods, which will help improve China's foreign trade environment, regulate capital inflows and outflows of foreign exchange under the item of trade in goods, resolve the problem of discrepancies between exports and foreign exchange collection and settlement, promote the smooth and healthy development of our country's foreign economy, prevent international economic risks, and create a more favorable environment for further reform and opening-up. (End) 2008-07-02/en/2008/0702/871.html
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September 28, 2007 -- After disclosing for the first time in 2006 the names of over 400 untraceable companies accused of foreign exchange fraud and in order to coincide with the 2007 nationwide Promotion of Honest Business Operations Month, the SAFE recently again disclosed cases of fraud by untraceable enterprises. Since April 2006, the SAFE has implemented a system of disclosure of information regarding illegal foreign exchange activities across the country, regularly revealing the information by means of public releases and online inquiries, in particular exposing information about fraud by untraceable enterprises both on the Web site of the SAFE and in the Financial Times. The 200 cases of fraud in the present disclosure had been discovered in foreign exchange management and law enforcement inspections in recent years. Specifically, about 20 enterprises were found to be involved in illegal transactions of foreign exchange and in illegal transactions of verification documents; most of the other cases involved illegal administrative behavior, such as violations of the foreign exchange verification rules. In their operations, these enterprises violated the relevant laws and regulations of the state regarding foreign exchange administration. In addition, they used their entity qualifications to engage in other illegal behavior or they failed to receive the annual inspection from the industrial and commercial departments according to the provisions. As a result, the foreign exchange administrative departments were unable to put them on record and administer punishment. These behaviors not only disrupted the normal business environment and the orderly competition in the foreign exchange market, but also resulted in hidden dangers to the financial security of the state. Through the disclosure of information on fraudulent activities of enterprises, on the one hand, the SAFE hopes to attract more attention from both enterprises and inspection departments to those entities that engage in illegal behavior, in order to prevent these entities from conducting other illegal activities and endangering enterprises that are involved in normal business activities. On the other hand, the SAFE hopes to caution the operating entities in the foreign exchange market, so as to strengthen the concept of honesty in the foreign exchange market, to guide foreign exchange-related entities to regulate their own businesses, and to create an honest, credible, healthy, and regulated foreign exchange market environment. 2007-09-28/en/2007/0928/855.html