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The SAFE branches and foreign exchange administration departments in Tianjin, Liaoning, Jiangsu, Hubei, Guangdong, Sichuan, Beijing, Chongqing, Heilongjiang, Zhejiang, Fujian, Guangxi, and Guizhou province (autonomous regions and municipalities directly under the Central Government), and the SAFE branches in Shenzhen and Qingdao: For the purpose of further deepening the reform of the foreign exchange management system and better satisfying and facilitating the requirements for business and capital operations of foreign-invested enterprises (FIEs), the State Administration of Foreign Exchange (SAFE) has decided to implement a pilot reform on an management approach for the settlement of foreign exchange capital funds of FIEs in certain areas (Tianjin Binhai New Area, Shenyang Economic Zone, Suzhou Industrial Park, Donghu National Self-Innovation Demonstration Zone, Guangzhou Nansha New District, Hengqin New District, Chengdu High-Tech Industrial Development Zone, Zhongguancun National Self-Innovation Demonstration Zone, Liangjiang New Area, Heilongjiang Frontier Development Zone for the Foreign Exchange Pilot Reform, Wenzhou Pilot Region for Comprehensive Financial Reform, Pingtan Comprehensive Pilot Zone, China-Malaysia Qinzhou Industrial Park, Guiyang Comprehensive Bonded Zone, Shenzhen Qianhai Shenzhen-Hong Kong Modern Services Cooperation Zone, and Qingdao Pilot Zone for Comprehensive Reform on Wealth Management and Finance). The relevant issues are hereby notified as follows: I. Voluntary Settlement of Foreign Exchange Capital Funds of Foreign-invested Enterprises Voluntary settlement of foreign exchange capital funds of FIEs means that foreign exchange capital funds in the FIE capital fund accounts, recognized by the local foreign exchange bureau as the rights and interests of capital contributions, can be settled in banks according to their actual business operational requirements. The provisional percentage for the voluntary settlement of foreign exchange capital funds of FIEs incorporated in the pilot areas is 100 percent. The SAFE may adjust the aforesaid percentage in due time according to the international receipts and payments situation. During the course of implementing the voluntary settlement of foreign exchange capital funds, the FIEs can still choose the existing settlement procedures against payments for the use of foreign exchange capital funds. For each foreign exchange settlement transaction of enterprises, based on the principle of foreign exchange settlement against payments, the banks shall examine and verify the authenticity and compliance in the use of the funds for prior transactions of foreign exchange settlement (including voluntary settlement of foreign exchange and foreign exchange settlement against payments). Domestic remittances and transfers and cross-border outward payments of foreign exchange capital funds of FIEs shall be transacted pursuant to the relevant regulations on foreign exchange administration. II. Management of Bank Accounts for Foreign Exchange Funds Settled and to Be Paid with RMB Proceeds from the Voluntary Settlement of Foreign Exchange Capital Funds of FIEs The FIEs shall open accounts for capital items – foreign exchange funds settled and to be paid (“settlement and payment accounts”) for the deposits of RMB proceeds from the voluntary settlement of foreign exchange on a one-to-one corresponding basis, with their account banks for the foreign exchange capital funds and for transactions of various payments through these accounts. The RMB proceeds of FIEs from foreign exchange settlement against payments shall not be used for payments through the settlement and payment accounts. Receipts in the FIE capital fund accounts include: foreign exchange capital funds remitted from overseas or capital funds subscribed to and contributed by foreign investors (including contributions from non-resident deposit accounts, offshore accounts, and domestic foreign exchange accounts of foreign individuals); foreign exchange capital funds or capital funds subscribed to and contributed as transferred from the special accounts for security deposits of overseas remittances; funds returned after transfers, pursuant to the regulations; funds received from the capital funds account of the same name; funds returned due to revocation of the transactions; received interest income; and other receipts registered or approved by the foreign exchange bureau. The scope of the payments from the capital fund accounts includes: foreign exchange settlement within the business scope; transfers through the foreign exchange settlement into the settlement and payment accounts; domestic transfers in the same currency to the special accounts for security deposits of domestic transfers, capital fund accounts of the same name, accounts for entrusted loans, special accounts for concentrated funds management, special accounts for overseas lending, special accounts for domestic reinvestments, and special accounts for foreign debts; outward remittances owing to capital reductions or withdrawals by foreign investors; outward payments for current items; and other capital item expenditures registered or approved by the foreign exchange bureau. The scope of the receipts in the settlement and payment accounts includes: funds from foreign exchange settlement as transferred from the corresponding capital funds accounts, domestic accounts for the realization of assets, or accounts for domestic reinvestments; funds returned after transfer from these accounts, pursuant to the regulations; funds returned due to revocation of the transactions; received interest income; and other receipts registered or approved by the foreign exchange bureau. The scope of the payments from the settlement and payment accounts includes: expenditures within the business scope; payments of the RMB security deposit; transfers to the special account for centralized funds management; repayment of RMB loans after completed utilization; foreign exchange purchases and payments or direct outward repayments of foreign debts; foreign exchange purchases and payments or direct outward payments owing to capital reductions or withdrawals by foreign investors; foreign exchange purchases and payments or direct outward payments for current item expenditures; and other capital item expenditures registered or approved by the foreign exchange bureau. RMB funds in the settlement and payment accounts shall not be transferred back to the capital fund accounts through foreign exchange purchases without approval by the foreign exchange bureau. The funds shall not be transferred between the FIEs’ settlement and payment accounts of the same name. RMB funds transferred from the settlement and payment accounts for the purpose of guarantees or payments of other security deposits, unless in the case of execution of guarantee agreements or deductions owing to default, shall be returned to the settlement and payment accounts through the original route. III. Utilization of FIEs’ Capital Funds according to the Principles of Authenticity and Self-use within the Business Scope FIE capital funds and RMB funds from their settlement shall not be used for the following purposes: (I) directly or indirectly used for expenditures beyond the business scope or prohibited under the laws and regulations of the State; (II) directly or indirectly used for securities investments, unless otherwise stipulated under the laws and regulations; (III) directly or indirectly used for the supply of RMB entrusted loans (unless permitted by the business scope), repayments of inter-enterprise borrowings (including third-party advances), and repayments of RMB bank loans already refinanced to any third party; (IV) payment of expenses relevant to the purchase of real estate not for one’s own use, unless as a foreign-invested real estate enterprise. IV. Facilitation of Domestic Equity Investments by FIEs with Funds from Foreign Exchange Settlement Except for transfers in the original currency owing to equity investments, it is acceptable for FIEs with investment as their main business (including foreign-funded investment companies, foreign-funded venture capital enterprises, and foreign-funded equity investment enterprises) to transfer the foreign exchange capital funds after direct settlement into the accounts of the invested enterprises according to the actual scale of investment, provided that the domestic investment project is authentic and compliant with the regulations. Capital funds other than the aforesaid enterprise equity investment funds shall be handled according to the principles of settlement against payment. When ordinary FIEs other than the abovementioned enterprises invest in domestic equities with capital funds in the original currency, the existing regulations on domestic reinvestments shall prevail. When funds from foreign exchange settlement are used for domestic equity investments, the invested enterprise shall first register for a domestic reinvestment with the local foreign exchange bureau and open a corresponding settlement and payment account, prior to the transfer of the RNB funds from the foreign exchange settlement by the investing enterprise, according to the actual scale of investment, to the account opened by the invested enterprise. When the invested enterprise continues to invest in domestic equities, the aforesaid principles shall apply. V. Further Requirements regarding the Management of Payments with Funds from Foreign Exchange Settlement (I) Foreign investors, FIEs, and other applicant entities shall provide, on an accurate and authentic basis and according to the regulations, the relevant certifying documents regarding the authenticity to the foreign exchange bureau and the banks, and complete the Order of Payments with Funds in Accounts Related to Direct Investments (see the Appendix) when applying for payments with RMB funds from the settlement of capital funds (including direct payments with foreign exchange capital funds). (II) The banks shall, according to the principles of “understanding their customers,” “understanding their businesses,” and “due diligence reviews,” be responsible for verification of the authenticity of outward payments with capital funds and payments with RMB funds from the foreign exchange settlement by the FIEs. When handling each payment transaction with such funds, the authenticity and compliance of the certifying documents with respect to the prior payment transactions shall be examined and verified. The banks shall keep the certifying documents relevant to the settlement and use of the foreign exchange capital funds of the FIEs for five years for future reference. The banks shall report the data, including the accounts related to the capital fund accounts and the settlement and payment accounts (account nature code: 2113), cross-border receipts and payments, domestic transfers, foreign exchange settlement and sales within the accounts, on a timely basis and according to the Circular of the State Administration of Foreign Exchange on the Issuance of Foreign Exchange Transaction Data Collection Rules for Financial Institutions (Version 1.0) (Huifa No. 18, [2014]). In the case of transfers of funds between the settlement and payment accounts and other RMB accounts, the information on the domestic transfers shall be reported by filling in the documents for domestic payments and receipts and indicating the fund purpose code under the “invoice number” column (according to “7.10: Code of Purpose for Foreign Exchange Settlement” in the Circular of Huifa No. 18 [2014]) ; the transaction code for other transfers shall be indicated as “929070,” except for payments under verification of goods trade. (III) When enterprises fail to provide certifying documents for current special reasons, the banks may make the relevant payments for the enterprises, provided that the obligation of due diligence review has been performed and the authentic background of the transactions has been verified, and may file with the foreign exchange bureau through its relevant business system with respect to the special items on the date of payment. The banks shall collect and examine the full set of relevant certifying documents resubmitted by the enterprises within 20 working days upon completion of the payment and report to the foreign exchange bureau with respect to the resubmission of the certifying documents on the authenticity of the filing of special items. When FIEs use capital funds for the purpose of reserve funds, the banks need not require submission of the aforesaid certifying documents regarding authenticity. The cumulative amount of payments for reserve funds by a single enterprise in one month shall not exceed the value equivalent to RMB 600,000. When FIEs apply for settlement against payments with all the foreign exchange capital funds on a one-off basis, or payments with all the RMB funds for the settlement and payment account, but fail to provide the relevant certifying documents on the authenticity, the banks shall not handle for them the foreign exchange settlement and payments . VI. Management of the Settlement and Utilization of Funds in the Foreign Exchange Accounts under Other Direct Investment Items Settlement of foreign exchange funds in domestic accounts for the realization of assets and domestic reinvestments of domestic institutions shall be made with reference to the administrative regulations regarding the FIE capital fund accounts. Settlement of foreign exchange funds in the domestic accounts for the realization of assets and domestic reinvestments by domestic individuals and overseas accounts for the realization of assets of domestic institutions and individuals shall be made directly through the banks, against the relevant transaction documents registered with the foreign exchange bureau. Settlement of foreign exchange funds in the foreign investors’ accounts for preliminary expenses shall be made according to the principles of settlement against payments. Foreign exchange funds in the special accounts for overseas and domestic security deposits shall not be used through the foreign exchange settlement. In cases of execution of guarantee agreements or deductions owing to default, the relevant security deposits shall be transferred into the other foreign exchange accounts for capital items of the recipients of the deposits that have been approved or registered by the foreign exchange bureau, and shall be used according to the relevant regulations. The interest income and investment income under direct investments in the above accounts can be settled and paid directly through the banks according to the relevant regulations on foreign exchange administration of current items. VII. Further Strengthening Post-mortem Supervision and Investigations of Irregularities by the Foreign Exchange Bureau (I) The foreign exchange bureau shall strengthen guidance and examination of the compliance of bank transactions, including foreign exchange settlement and utilization of FIE capital funds in accordance with the Regulations on the Control of Foreign Exchange of the People's Republic of China and the Regulations on Foreign Exchange Administration of Domestic Direct Investments by Foreign Investors. The manner of examination includes submission of written explanatory and transaction documents by the relevant entities as requested, an interview with the persons in charge, field inspections or duplication of the relevant documents of the entities, and notification of any irregularities. With respect to banks with serious or malicious irregularities, their foreign exchange transactions under capital items shall be suspended according to the relevant procedures. With respect to FIEs with serious or malicious irregularities, their qualifications for voluntary settlement of foreign exchange shall be revoked. Prior to the submission of the written explanatory documents and proper rectification, any other foreign exchange transactions under the capital items shall be prohibited. (II) For FIEs and banks with violations against this Circular with respect to foreign exchange settlement and utilization of FIE capital funds, the foreign exchange bureau shall investigate and treat them according to the relevant provisions of the Regulations on the Control of Foreign Exchange of the People's Republic of China. VIII. Other Relevant Issues This Circular shall take effect as of August 4, 2014. In cases of any discrepancies with prior regulations, this Circular shall prevail. The relevant requirements in the Circular of the State Administration of Foreign Exchange on Operational Issues Concerning Foreign Exchange Payment and Settlement of FIE Capital Funds (Huizongfa No. 142 [2008]) and the Supplementary Circular of the General Affairs Department of the State Administration of Foreign Exchange on Operational Issues Concerning Improvements in the Management of Foreign Exchange Payments and Settlement of FIE Capital Funds (Huizongfa No. 88 [2011]) are provisionally not applicable to the foreign exchange settlement of the capital funds of the FIEs in the pilot districts. The sub-bureaus in the pilot districts and the foreign exchange administrative departments are requested to distribute this Circular to the central sub-bureaus, branch bureaus, and banks within the pilot districts as soon as possible. In cases of any problems arising during the course of implementation, feedback shall be provided to the Capital Account Management Department of the SAFE on a timely basis. Appendix: Order of Payments with Funds in Accounts Related to Direct Investments State Administration of Foreign Exchange July 4, 2014 FILE: Order of Payments with Funds in Accounts Related to Direct Investments 2014-09-22/en/2014/0922/746.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: In order to regulate and improve the foreign exchange administration over involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies, in accordance with the Regulations on the Foreign Exchange Administration of the People’s Republic of China, the Measures for the Administration of Individual Foreign Exchange Rules (Decree No. 3 [2006] of the People’s Bank of China), and relevant regulations and provisions, the relevant matters are hereby notified as follows: I. “Overseas Listed Companies” stated in this Circular refer to companies listed on overseas stock exchanges (including that of Hong Kong, Macau, and Taiwan ). “Equity Incentive Plans” refer to the plans of Overseas Listed Companies, in terms of their own stocks, to provide equity incentives in the domestic companies to such individuals who have employment or labor relations with the companies as directors, supervisors, senior management, and other employees, including stock option plans, employee stock ownership plans, and other equity incentive methods permitted by the laws and regulations. “Domestic Companies” refer to domestic institutions, such as Overseas Listed Companies registered in China, Overseas Listed Companies’ branches (including representative offices) in China, and parent companies, subsidiaries, or partnership enterprises at all levels in China that have shareholding relationships or actual control relationships with the Overseas Listed Companies. “Domestic Individuals” (hereinafter referred to as “Individuals”) refer to the directors, supervisors, senior management, and other employees of Domestic Companies as specified in Article 52 of the Regulations on the Foreign Exchange Administration of the People’s Republic of China, including Chinese citizens (including those of Hong Kong, Macau, and Taiwan) and foreign individuals. II. The Individuals involved in an Equity Incentive Plan of an Overseas Listed Company shall, through the Domestic Company with which they are affiliated, entrust a domestic agency (hereinafter referred to as the “Domestic Agency”) to centrally handle relevant matters such as the foreign exchange registration, the account opening, and the fund transfer and exchange; and the matters of the above Individuals such as option exercises, purchases and sales of relevant stocks or equities, and relevant fund transfers shall be centrally handled by an overseas institution (hereinafter referred to as the “Overseas Trustee”). The Domestic Agency shall be a Domestic Company involved in the Equity Incentive Plan, or another domestic institution which may handle asset custody business and is selected by the Domestic Company in accordance with the law. III. The Domestic Agency shall, in terms of the involvement of Individuals in Equity Incentive Plans, centrally handle the foreign exchange registration with the local branches or offices of the State Administration of Foreign Exchange (SAFE) (hereinafter referred to as the “local foreign exchange authorities”) upon the strength of the following materials: (1) A written application, together with the Foreign Exchange Registration Form for the Involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies (see Annex 1, hereinafter referred to as the “Foreign Exchange Registration Form”) (2) Evidentiary materials that prove the authenticity of the Equity Incentive Plans, such as relevant announcements of the Overseas Listed Companies (where such plans involve state-owned enterprises and require approval by relevant authorities or need such approval due to other reasons, the approval documents from such authorities must be submitted); (3) The power of attorney or agreement in which the Domestic Companies authorize the Domestic Agency to centrally handle matters related to the involvement of the Individuals in the Equity Incentive Plans; (4) Letters of commitment issued by the Domestic Companies in which they vouch for the veracity of the employment or labor relations between them and the Individuals (together with the documents that specify such information, including the lists of the Individuals, their identity certificate numbers, and the involved equity incentive types, etc.); (5) The required supplementary materials, in the case that the contents of the aforesaid materials are not consistent with one another or cannot prove the authenticity of the transactions. Where the above materials are examined and determined to be error-free, the local foreign exchange authorities shall issue to the Domestic Agencies the relevant foreign exchange registration certificates for the Equity Incentive Plans. IV. Individuals may use their lawful funds in China , such as self-owned foreign exchange in their individual foreign exchange deposit accounts or RMB, for the purpose of involvement in Equity Incentive Plans. Where the self-owned foreign exchange funds are used for the purpose of such involvement, the banks shall handle the relevant fund transfer formalities upon the strength of such materials as the copies of the foreign exchange registration certificates for the Equity Incentive Plans affixed with the seals of the Domestic Agencies, and the supporting materials for the employment and labor relations between the Individuals and the Domestic Companies. Where RMB funds are used for the purpose of the involvement, the Individuals shall transfer the RMB funds to the accounts of the Domestic Agencies which shall then centrally handle the relevant formalities for foreign exchange purchases or payments in accordance with Article 5 hereof. V. Where the Domestic Agencies need to remit funds out of China for the purpose of the involvement of Individuals in Equity Incentive Plans, they shall, on a yearly basis, submit an application to the local foreign exchange authorities for the limit of the foreign exchange payments, upon the strength of the written application, the foreign exchange registration certificates for the Equity Incentive Plans (such certificates are not necessary in cases of an initial application of foreign exchange registration for the Equity Incentive Plans), and the latest completed Foreign Exchange Registration Forms. Where the above materials are examined and determined to be error-free, the local foreign exchange authorities shall issue to the Domestic Agencies the foreign exchange registration certificates for Equity Incentive Plans, specifying the relevant limit of foreign exchange payments; the banks shall handle the relevant formalities for the foreign exchange purchases and payments of the Domestic Agencies within the limit of the foreign exchange payments upon the strength of such certificates. VI. The Domestic Agency shall open a special domestic foreign exchange account with the bank upon the strength of the foreign exchange registration certificate for an Equity Incentive Plan. The scope of the receipts of such an account is as follows: the foreign exchange funds transferred from the individual foreign exchange deposit accounts, the foreign exchange funds acquired from foreign exchange purchases centrally carried out by the Domestic Agency on behalf of the Individuals, the principal and earnings remitted back after the sale by the Individuals of the stock or equity under the Equity Incentive Plans, the dividend remitted back, and other receipts approved by the local foreign exchange authority. The scope of the expenditures is as follows: funds required for the purpose of involvement in Equity Incentive Plans to be paid overseas, funds required for the purpose of foreign exchange settlement for funds remitted back from overseas or required for the purpose of transferring to the individual foreign exchange deposit accounts, and other expenditures approved by the local foreign exchange authority. VII. After the foreign exchange revenue acquired from the involvement of Individuals in Equity Incentive Plans is transferred back to China, the banks shall transfer such revenue from the special domestic foreign exchange accounts of the Domestic Agencies to the relevant individual foreign exchange deposit accounts upon the strength of the materials which shall be submitted by the Domestic Agencies, such as the relevant written applications, the foreign exchange registration certificates for the Equity Incentive Plans, and the overseas transaction vouchers; such revenue shall be managed and used in accordance with the relevant provisions for individual foreign exchange deposit accounts. In terms of the amount in the funds transferred back, which corresponds to the original principal used for the purchase of foreign exchange, and all the earnings, the Domestic Agencies may also centrally handle the foreign exchange settlement formalities for the Individuals with the banks upon the strength of the above materials, and transfer the funds acquired from the foreign exchange settlement to the relevant individual domestic RMB accounts. VII. Where there is any material change to the Equity Incentive Plans of the Overseas Listed Companies (such as amendments to the key clauses in the original plans or the addition of new plans, or changes to the original plans due to such material events as M&As or restructurings of the Overseas Listed Companies or the Domestic Companies), or the Domestic Agencies or the Overseas Trustees are changed, the Domestic Agencies shall handle the alteration registration procedures with the local foreign exchange authorities upon the strength of a written application, the original foreign exchange registration certificate for the Equity Incentive Plan, the latest completed Foreign Exchange Registration Form, and the relevant evidentiary materials attesting to the authenticity of the transactions, within three months upon the occurrence of such change. IX. Where the Equity Incentive Plans are terminated due to their expiration, or such material events as their de-listing from the overseas securities markets or M&As or restructurings of the Domestic Companies, the Domestic Agencies shall handle the foreign exchange de-registration procedures for the Equity Incentive Plans with the local foreign exchange authorities upon the strength of a written application, the original foreign exchange registration certificate for the Equity Incentive Plan, and other relevant evidentiary materials, within twenty working days upon such termination. Where the above materials are examined and determined to be error-free, the local foreign exchange authorities shall handle the relevant foreign exchange de-registration formalities for the Equity Incentive Plans; after such formalities are completed, the Domestic Agencies may handle the subsequent procedures for the settling of the accounts and the fund exchange. X. The Domestic Agencies shall submit the Filing Form for the Involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies (see Annex 2) to the local foreign exchange authorities within the first three working days of each quarter. The account opening banks for the Domestic Agencies shall submit to the local foreign exchange authorities the Form for the Opening and Closing of Special Domestic Foreign Exchange Accounts for Involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies (see Annex 3), and the Form for Receipts and Payments in Special Domestic Foreign Exchange Accounts for Involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies (see Annex 4), within the first three working days of each month. The local foreign exchange authorities shall examine and summarize the relevant forms and then submit the relevant information thereof to the SAFE within the first five working days of each month. XI. Where the Individuals are involved in the Equity Incentive Plans of Overseas Listed Companies and make foreign-related collections and payments via the special domestic foreign exchange accounts opened by the Domestic Agencies, the Domestic Agencies shall make an indirect declaration of the balance of payments statistics in accordance with the relevant provisions. XII. The SAFE and its branches shall supervise, administer, and inspect the foreign exchange business related to the involvement of Individuals in Overseas Listed Companies. Where the Individuals, Domestic Companies, the Domestic Agencies, or the bank violate this Circular, the SAFE and its branches may take relevant regulatory measures and impose relevant administrative penalties in accordance with the law. XIII. The materials required under this Circular for the relevant application and record shall be in Chinese and shall be legally binding; where there are versions in multiple languages, such as Chinese and other languages, the legally binding Chinese version shall prevail. XIV. This Circular shall come into effect as of the date of issuance. At the same time, the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Printing and Distributing the Operational Rules on Foreign Exchange Administration over Involvement of Domestic Individuals in Employee Stock Ownership Plans and Share Option Schemes of Overseas Listed Companies (Hui Zong Fa No. 78 [2007]) and the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Delegating Authority for Examining and Approving the Quotas for Initial Purchases and Payments in Foreign Exchange and the Opening of Foreign Exchange Accounts for Involvement of Domestic Individuals in Employee Stock Ownership Plans of Overseas Listed Companies (Hui Zong Fa No. 2 [2008]) shall be repealed. The branches and foreign exchange administrative departments of the SAFE shall, upon receipt of this Circular, forward it as soon as possible to the central sub-branches, the sub-branches, and the foreign-funded banks within their respective jurisdictions. All designated Chinese-funded foreign exchange banks shall, upon receipt of this Circular, forward it to their respective branches and sub-branches as soon as possible. In cases of any problems during implementation, please report them to the Capital Account Management Department of the SAFE in a timely manner. Annex: 1. Foreign Exchange Registration Form for the Involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies 2. Filing Form for the Involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies 3. Form for the Opening and Closing of Special Domestic Foreign Exchange Accounts for Involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies 4. Form for the Receipts and Payments in Special Domestic Foreign Exchange Accounts for Involvement of Domestic Individuals in Equity Incentive Plans of Overseas Listed Companies February 15, 2012 FILE: Annex 1：Foreign Exchange Registration Form for the Involvement of Domestic Individuals in Equity _0 FILE: Annex 2：Filing Form for the Involvement of Domestic Individuals in Equity Incentive Plans of Over_0 FILE: Annex 3：Form for the Opening and Closing of Special Domestic Foreign Exchange Accounts for Involv_0 FILE: Annex 4：Form for Receipts and Payments in Special Domestic Foreign Exchange Accounts for Involvem_0 2012-05-15/en/2012/0515/734.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: According to the Announcement of the State Administration of Foreign Exchange, the State Administration of Taxation, and the General Administration of Customs on the Pilot Reform of the Foreign Exchange Administration System for Trade in Goods (Announcement No. 2 [2011] of the State Administration of Foreign Exchange), effective from December 1, 2011, the pilot reform on the foreign exchange administration system for trade in goods (hereinafter referred to as the “reform”) will be implemented in certain regions. In order to actively and orderly advance the pilot reform, the relevant matters are as follows: I. Effective from December 1, 2011, the pilot reform will take place in the regions under jurisdiction of the branches of the State Administration of Foreign Exchange (the “SAFE”) in Jiangsu, Shandong, Hubei, Zhejiang (excluding Ningbo), Fujian (excluding Xiamen), Dalian, and Qingdao (hereinafter referred to as the “pilot regions”). The banks and enterprises in the pilot regions shall handle the foreign exchange receipts and payments for trade in accordance with the Guidelines for the Pilot Implementation of the Foreign Exchange Administration System for Trade in Goods and its Detailed Rules on Implementation (hereinafter referred to as the “pilot regulations”), and those outside pilot regions shall handle the foreign exchange receipts and payments for trade in accordance with the provisions in force. In order to regulate the operation of the pilot, the SAFE has formulated the Operational Rules on the Guidelines for the Pilot Implementation of the Foreign Exchange Administration System for Trade in Goods (Bank and Enterprise Version) (hereinafter referred to as the “operational rules,” see Annex 1), to be implemented when the pilot becomes effective. II. From the effective date of the pilot, the banks in the pilot regions shall suspend the formalities for the checking and input of information on advance payments for goods as well as the de-registration of deferred receipts and deferred payments of the enterprises in the pilot regions. The enterprises, banks, branches, and sub-branches of the SAFE (hereinafter referred to as the “foreign exchange authorities”) outside the pilot regions shall still handle the relevant business in accordance with the provisions in force on trade credit registration management. III. During the pilot period, where the foreign exchange receipts and payments for trade are handled at banks in places other than those where the enterprises are located, the banks shall require that the enterprises explain their status with respect to the relevant lists and classifications, and shall handle the relevant business in accordance with the following provisions: (1) Where Category-B and -C enterprises in the pilot regions handle foreign exchange receipts and payments for trade with banks outside of the pilot regions, the enterprises shall undergo the registration procedures with the local foreign exchange authorities on a case-by-case basis, and the banks shall handle the business based upon the strength of the Registration Form for Foreign Exchange Business for Trade in Goods (hereinafter referred to as the “registration form”) issued by the foreign exchange authorities where the enterprises are located. Where Category-A enterprises in the pilot regions handle foreign exchange receipts and payments for trade with banks outside of the pilot regions, the banks shall handle the business in accordance with the relevant provisions in force outside of the pilot regions on foreign exchange collections from exports and the measures in force outside of the pilot regions applicable to Category-A import enterprises. The banks in and outside of the pilot regions shall not directly handle the foreign exchange receipts and payments for trade of the enterprises within the pilot regions which are not on the List of Enterprises Involved with Foreign Exchange Receipts and Payments for Trade. (2) Where the enterprises outside the pilot regions and are classified as Category-B or -C import enterprises in accordance with the Interim Measures for the Administration of Foreign Exchange Payments for the Import of Goods and the relevant provisions, or are not on the List of Importers Making Foreign Exchange Payments, shall handle foreign exchange receipts and payments for trade with banks in the pilot regions, the enterprises shall undergo the registration procedures with the local foreign exchange authorities on a case-by-case basis, and the banks shall handle the business upon the strength of the Registration Form issued by the foreign exchange authorities where the enterprises are located. Where other enterprises outside of the pilot regions handle foreign exchange receipts and payments for trade with banks in the pilot regions, the banks shall handle the business in accordance with the measures applicable to Category-A enterprises in the pilot regions. (3) As for business to be handled upon the strength of the Registration Form, the banks shall indicate the amount and date of the receipts and payments on the Registration Form and shall affix their business seal thereto after examination of the paper Registration Form. They are not required to log into the relevant systems to verify or to indicate the electronic information on the Registration Form. (4) Where the enterprises in the pilot regions handle trade credits with banks outside of the pilot regions, the banks are not required to handle the formalities for the checking and inputting of information on the advance payments for goods or the de-registration for deferred receipts and deferred payments; where the enterprises outside the pilot regions handle trade credits with banks within the pilot regions, the banks shall handle the relevant business in accordance with the provisions in force on trade credit registration management. IV. As of the effective date of the pilot, use of the Verification System for the Collection and Payment of Foreign Exchange from Trade, the Online Inspection System for Foreign Exchange Collections and Settlements from Exports, and the China E-Port – the System for Foreign Exchange Payments for Imports – shall be suspended, and the online operation of the Foreign Exchange Monitoring System for Trade in Goods (hereinafter referred to as the “monitoring system”) shall be implemented. V. The banks shall carefully study the policies related to the reform, cooperate with the foreign exchange authorities with respect to doing a good job in training the bank branches in the pilot regions before the effective date of the pilot and in preparing for the online operations and the system connection in accordance with the following requirements: (1) The bank and enterprise may access the monitoring system through the application service platform of the SAFE (hereinafter referred to as the “Application Service Platform”). The specific access channels are as follows: User Type Mode of Network Connection Access Address Bank Access Network of External Institutions http://asone.safe:9101/asone/ Enterprise Internet http://asone.safesvc.gov.cn/asone (2) The banks in the pilot regions shall complete the work related to the network connection, the client environment setting, user management, authority assignment, and access tests between November 7, 2011 and November 25, 2011 in order to ensure that the bank outlets handling the foreign exchange business for trade in goods can access the monitoring system (bank version) through the Application Service Platform. Specific operating instructions for the bank network connection and the system access settings are detailed in the Access Settings Manual for the Foreign Exchange Monitoring System for Trade in Goods (Bank Version) (see Annex 2). (3) As for bank outlets in the pilot regions that have been assigned financial institution identification codes by October 31, 2011, if they have not opened their accounts on the Application Service Platform, their accounts on the Application Service Platform and their accounts for Foreign Exchange Online Business for Trade in Goods will be automatically opened as of November 7, 2011, and they shall obtain the initial passwords from the business administrator in their head offices or from the SAFE through their head offices; if they have opened their accounts on the Application Service Platform, they will have their account for Foreign Exchange Online Business for Trade in Goods automatically opened as of November 7, 2011, and their business administrator passwords and business operator passwords will not change. The business operators with authority to access the Verification System for the Collection and Payment of Foreign Exchange for Trade (Bank Version) will automatically obtain authority to access the monitoring system (Bank Version). (4) As for bank outlets in the pilot regions that apply for assignment of the financial institution identification codes after November 1, 2011, if they intend to handle foreign exchange business for trade in goods, they shall submit an application to the local foreign exchange authorities to open an account for Foreign Exchange Online Business for Trade in Goods, and they shall obtain the initial passwords for the business administrator user from their head offices or from the SAFE through their head offices. (5) The authority of the bank outlets in the pilot regions to access the Verification System for the Collection and Payment of Foreign Exchange for Trade (Bank Version) shall be automatically cancelled by the Application Service Platform on December 1, 2011. All designated Chinese-funded foreign exchange banks shall, upon receipt of this Circular, forward it to their branches as soon as possible. The branches and foreign exchange administrative departments of the SAFE shall, upon receipt of this Circular, forward it as soon as possible to the local commercial banks and the foreign-funded banks within their respective jurisdictions. If any problems are encountered during implementation of the policy or the monitoring system, please report them to the local foreign exchange authorities in a timely manner. Business Enquiry Hotline: 010-68402546 Monitoring System Support Hotline: 010-68402214 Enquiry Hotline for Bank Network Connection: 010-68402022 Enquiry Hotline for Application Service Platform: 010-68402141 Annex: (omitted) October 21, 2011 2011-10-23/en/2011/1023/732.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 SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo: In order to regulate business related to the pilot program on domestic securities investments by fund management companies and securities companies as RMB qualified foreign institutional investors (hereinafter referred to as “RQFIIs”), in accordance with the Measures for the Pilot Program on Domestic Securities Investments by Fund Management Companies and Securities Companies as RMB Qualified Foreign Institutional Investors (Decree No. 76 of the China Securities Regulatory Commission, the People’s Bank of China, and the State Administration of Foreign Exchange, hereinafter referred to as the “Measures”) and the relevant provisions on foreign exchange administration, the relevant issues are hereby notified as follows: I. The State Administration of Foreign Exchange (SAFE) and its branches and foreign exchange administrative departments (hereinafter referred to as the “foreign exchange authorities”) shall, in accordance with the law, carry out monitoring and management of the investment quota, the outward and inward remittances of funds, and other affairs related to the domestic securities investments by RQFIIs. II. The RQFII with a Domestic Securities Investment Business License issued upon the approval of the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”) shall entrust its domestic trustee (hereinafter referred to as the “Trustee”) to handle on its behalf the relevant procedures required by this Circular. III. The quota of domestic securities investments by the RQFII (hereinafter referred to as the “investment quota”) shall be subject to balance control by the SAFE, and the cumulative net inward remittances of RMB funds by the RQFII shall not exceed the approved investment quota. The RQFII shall not transfer or resell its investment quota for use by other institutions or individuals. Where the RQFII with an investment quota fails to effectively use the investment quota within 1 year as of the date of its approval, the foreign exchange authorities shall reduce, or even cancel, the investment quota in accordance with the relevant circumstances. IV. The RQFII shall apply to the SAFE for an investment quota based on the documents and materials set forth in Article 9 of the Measures. In cases of applying for an increase in the investment quota, the RQFII shall submit the materials set forth in Item I and Item IV of Article 9 of the Measures, as well as the Foreign Exchange Registration Certificate for Qualified Foreign Institutional Investors (hereinafter referred to as the “Certificate”) and the statement on domestic securities investments within the existing investment quota, the content of which includes asset allocations and changes, investment profits and losses, compliance, average turnover rates of product investment transactions, and so forth. V. The RQFII shall, within 5 working days after the opening of its domestic RMB account, file a report on the account opening with the local foreign exchange authorities where the Trustee is located, submit the formal trust agreement to the SAFE, handle the relevant registration procedures, and obtain the Certificate. Where the RQFII intends to initiate and establish Open-end Funds, it shall, within 20 working days upon initiation, file a Chinese translation of the provisions in the core articles of the fund prospectus with the SAFE. VI. A RQFII with an investment quota may entrust its Trustee to handle the relevant procedures for the inward and outward remittance of funds and for the purchase of foreign exchange on its behalf based on the approval document of the investment quota issued by the SAFE. The funds that can be remitted inward by the RQFII include the investment principal remitted inward from overseas, the amount required for the payment of the relevant taxes and fees (such as taxes, trust fees, audit fees, and management fees) and other RMB funds permitted by the People’s Bank of China (PBC) and the SAFE to be remitted inward; the funds that can be remitted outward include such funds as the income from the sale of domestic securities, cash dividends and interest, and other RMB funds permitted by the PBC and the SAFE to be remitted outward; the aforesaid funds may be remitted outward in RMB or in foreign exchange purchased with RMB. VII. Where the RQFII intends to initiate and establish Open-end Funds, the Trustee may, based on the daily subscribed or redeemed net amount, handle the procedures for the inward remittance of the relevant RMB funds on a daily basis in cases of net subscriptions, and handle the procedures for the outward remittance of the relevant funds in RMB or in foreign exchange purchased with RMB on a daily basis in cases of net redemptions. For other than Open-end Funds, the RQFII may entrust the Trustee to handle its procedures for the inward or outward remittance of RMB funds or for the outward remittance of funds in foreign exchange purchased with RMB funds on a monthly basis. In cases of investment earnings to be remitted outward in RMB or in foreign exchange purchased with RMB, the audit report issued by the domestic accounting firm and the relevant tax certificates shall also be provided to the Trustee. VIII. Where the Trustee handles the procedures on behalf of the RWFII for the inward or outward remittance of funds or the purchase of foreign exchange, it shall conduct on a monthly basis an examination based on the authenticity and compliance of the relevant exchange, the receipts and payments of funds, and the timely and accurately recorded relevant information on the Certificate, and shall submit the statements related to the domestic securities investment business of the RQFII to the SAFE in accordance with the following requirements: (I) Submission of the Breakdown of the Outward and Inward Remittances of Funds and the Purchase of Foreign Exchange by the RQFII (see Schedule 1) within 8 working days after the end of each calendar month; (II) Submission of the Monthly Report I & II on Domestic Securities Investments by the RQFII (see Schedule 2) within 8 working days after the end of each calendar month; (III) Submission of the last fiscal year’s Annual Financial Statements I & II on Domestic Securities Investments by RQFIIs (see Schedule 3), as audited by a Chinese certified public accountant within 3 months after the termination of each fiscal year. IX. Where the RQFII or its Trustee violates the provisions of this Circular, the foreign exchange authorities shall implement the relevant supervisory measures and administrative penalties. X. The materials submitted as requested by this Circular shall be in Chinese. Should there be counterparts in both Chinese and a foreign language, the Chinese text shall prevail. XI. This Notice shall come into force as of the date of promulgation. December 22, 2011 FILE: Breakdown of the Outward and Inward Remittances of Funds and the Purchase of Foreign Exchange by RMB Qualified Foreign Institutional Investors FILE: Monthly Statement on the Domestic Securities Investments by RMB Qualified Foreign Institutional Investors FILE: Annual Financial Statement on the Domestic Securities Investments by a RMB Qualified Foreign Institutional Investor for Year 2012-02-15/en/2012/0215/733.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: In order to expedite the reform of the verification and writing-off system for imports and exports and to achieve the transformation of foreign exchange administration for trade in goods from the current model to aggregate verification, off-site verification, and subject-based supervision, on May 1, 2010 the State Administration of Foreign Exchange (SAFE) launched a program for pilot implementation of the reform of the verification and writing-off system for foreign exchange payments for imports for trade in goods (hereinafter referred to as import verification reform) in seven regions, i.e., Tianjin, Jiangsu, Shandong, Hubei, Inner Mongolia, Fujian, and Qingdao. Based on the results, the SAFE has decided to promote implementation of the import verification reform throughout the country. The relevant issues concerning the reform are hereby notified as follows: 1. The import verification reform aims to promote the facilitation of trade, reduce operating costs for enterprises and banks, and meet the new requirements for foreign trade by transforming the methods and approaches for foreign exchange administration. It is based on authenticity principles and the human-oriented concepts. Efforts will be made to effectively check cross-border capital flows in violation of the laws and regulations by comprehensively looking at and comparing all the information available about cash and goods flows of enterprises and by enhancing constant and dynamic monitoring and analysis. To fulfill this goal, the foreign exchange authorities will collect complete information about foreign exchange payments for imports and the delivery of goods by enterprises and will carry out off-site aggregate comparisons on the strength of the information system, based on which the foreign exchange payments of enterprises for imports will be monitored and analyzed through off-site monitoring and a early-warning mechanism and abnormal conduct will be identified in a timely manner. Based on the information from the off-site monitoring, early warning, and on-site verification, efforts will be made to evaluate and categorize the enterprises. The basic idea of the reform is to achieve a transformation from case-by-case verification to aggregate verification for the administration of foreign exchange payments for imports, from on-site verification to off-site inspection, and from behavioral examination to subject supervision. 2. The Interim Measures for the Administration of Foreign Exchange Payments for the Import of Goods and its detailed rules for implementation (hereinafter referred to as the Interim Measures,see Appendices 1 & 2) shall enter into effect as of December 1, 2010. As of the date of implementation of the Interim Measures, import enterprises shall make foreign exchange payments for imports in compliance with the Interim Measures. The banks will handle foreign exchange payments for import enterprises in compliance with the Interim Measures. 3. The banks shall complete connection of the verification system for the collection and payment of foreign exchange under trade (hereinafter referred to as the verification system) to their business systems and the relevant configurations before November 30, 2010, and shall search the directory of the import enterprises, registration forms for foreign exchange payments for imports, grades for classified evaluation, and so on through the verification system as of the date when the Interim Measures are implemented. 4. The import verification reform is of great significance for promoting the facilitation of trade. The branches of the SAFE, in attaching great importance to the reform, will make the overall work arrangements and endeavor to fulfill the following tasks: 1) Unify awareness of the significance of the reform and play an active role in organizing and leading the reform. All branches shall fully understand the great significance of the import verification reform, form a reform leading group headed by a relevant director to lead and oversee the progress of the reform in their respective jurisdictions, and coordinate with the relevant departments to provide strong support for the reform. Work teams consisting of business and technical staff shall be formed under the reform leading group to be responsible for implementation of the reform and for dissemination and interpretation of the policies, providing business and technical support, feedback, and so forth within their jurisdictions. 2) Implement aggregate verification, dynamic monitoring, and classified administration to improve the effectiveness of the supervision by complying with the relevant provisions of the Interim Measures. 3) Strengthen publicity and training. By complying with the overall planning of the SAFE, the branches shall fulfill their duties to disseminate and interpret the policies through various methods and shall guide and urge banks and import enterprises in immediately comprehending the general idea of the reform and the purposes of the relevant policies. The branches shall provide training of various forms to functionaries of the foreign exchange authorities, banks, and import enterprises within their jurisdictions in an effort to facilitate their comprehension of business operations under the new policies and to ensure the effective implementation of the reform measures. 4) Provide strong technical support for the installation and commissioning of the software for the verification system used in enterprises and banks within their jurisdiction. 5) Report information about implementation of the import verification reform to the SAFE on a monthly basis. 5. Emergency measures In the event that the verification system malfunctions temporarily due to data-input failures and so forth, the branches shall promptly report the circumstance to the import verification reform office of the SAFE for resolution and shall record the relevant problems. During this period, the foreign exchange authorities shall create a ledger for the import payments for which they are responsible and accordingly shall make a business record. 6. Logging on to the verification system Address of the verification system (foreign exchange authority version) http://100.1.63.3:9001/SafeChk/; Address of the verification system (bank version): http://asone.safe:9101/asone/; Address of the verification system (corporate version): http://asone.safesvc.gov.cn/asone. Contact information for the import verification reform office of the SAFE: Tel.: 010-68402546 010-68402547 Fax: 010-68402594 E-mail addresses: (Intranet) tradebus@mail.safe tradetech@mail.safe (Extranet) tradebus@mail.safe.gov.cn tradetech@mail.safe.gov.cn All branches (foreign exchange administration departments) of the SAFE shall, as of the date of promulgation of this Circular, make preparations for the relevant work and shall forward this Circular to the central sub-branches (sub-branches), banks, and import enterprises within their jurisdictions as quickly as possible. affix1:Interim Measures for the Administration of Foreign Exchange Payments for the Import of Goods affix2:Detailed Rules for Implementation of the Interim Measures for the Administration of Foreign Exchange Payments for the Import of Goods 2010-10-27/en/2010/1027/711.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 promote the development of e-banking and online banking, to facilitate the handling of foreign exchange settlement and sales for individuals by designated foreign exchange banks (hereinafter referred to as the banks), and to regularize the administration of e-bank-based foreign exchange settlement and sales for individuals, the State Administration of Foreign Exchange (hereinafter referred to as the SAFE) has formulated the Interim Measures for the Administration of E-bank-based Foreign Exchange Settlement and Sales for Individuals (hereinafter referred to as the Interim Measures,see the Annex for details). Relevant issues concerning the Interim Measures are hereby notified as follows: 1. Banks shall commence e-bank-based foreign exchange settlement and sales for individuals in strict compliance with the Interim Measures. Banks that commence E-bank-based foreign exchange settlement for overseas individuals must have the technical capability to automatically extract information on the identity of the overseas individuals and to input the above information into the information system for the administration of foreign exchange settlement and sales for individuals in the form of Country Code + ID Card No.Banks that lack this technical ability can first commence foreign exchange settlement and sales for domestic individuals, and then file an application with the SAFE for the commencement of foreign exchange settlement and sales for overseas individuals when they are technically capable of providing such services. 2. Banks shall commence e-bank-based foreign exchange settlement and sales in strict compliance with the Circular of the State Administration of Foreign Exchange on Further Improving the Administration of Foreign Exchange Settlement and Sales for Individuals (Hui Fa [2009] No.56), so as to achieve unified management over foreign exchange settlement and sales by splitting large amounts of money into smaller parts through counters and e-channels. The branches and foreign exchange administration departments of the SAFE shall, upon receipt of this Circular, forward it immediately to the sub-branches, urban commercial banks, rural commercial banks, and foreign-funded banks within their jurisdictions. The designated Chinese-funded foreign exchange banks shall, upon receipt of this Circular, forward it immediately to their branches. If there are any problems arising from implementation of this Circular, please provide feedback on the relevant problems to the SAFE in a timely manner. Tel.: (Business) 010-68402449, 68402152 (Technology) 010-68402377 January 19, 2011 FILE: Interim Measures for the Administration of E-banking-based Foreign Exchange Settlement and Sales for Individuals 2011-03-15/en/2011/0315/720.html
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Provincial, autonomous region, and municipal branches and Foreign Exchange Administration departments of the SAFE, and the Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo branches of the SAFE: To satisfy the requirements of MNCs to uniformly use foreign exchange funds both in China and in other countries, to serve the real economy, to promote trade and investment facilitation, to support industrial restructuring and upgrading, and to explore exchange facilitation for investment and financing, the State Administration of Foreign Exchange (SAFE) has developed the Regulations on the Centralized Operation and Management of the Foreign Exchange Funds of MNCs (Interim) and is now issuing them to you for implementation. Appendix: Regulations on the Centralized Operation and Management of the Foreign Exchange Funds of MNCs (Interim) State Administration of Foreign Exchange April 18, 2014 FILE: Regulations on the Centralized Operations and Management of the Foreign Exchange Funds of MNCs (Interim) FILE: Appendix 1-5 2014-10-21/en/2014/1021/747.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 of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo: To further improve the regulatory system of foreign exchange administration and to facilitate trade investment, we hereby notify you regarding the validity of some regulatory for exchange administration documents as follows: I. Eighteen regulatory documents, of which the main content has been replaced by new content and does not conform to current management practices, shall be repealed. (Please refer to Annex 1 for a list.) II. Sixteen regulatory documents on foreign exchange administration, of which either the application period has expired or the objects under administration have ceased to exist, are rendered invalid and declared invalid. (Please refer to Annex 2 for a list.) The Circular will take effect as of the date of promulgation. Annex 1: Checklist of EighteenForeign Exchange Administration Regulatory Documents Repealed by the State Administration of Foreign Exchange. Annex 2: Checklist of Sixteen Regulatory Foreign Exchange Administration Documents Declared Invalid by the State Administration of Foreign Exchange. State Administration of Foreign Exchange September 22, 2014 FILE: Checklist of Eighteen Regulatory Foreign Exchange Administration Documents Repealed by the State Administration of Foreign Exchange FILE: Checklist of Sixteen Regulatory Foreign Exchange Administration Documents Declared Invalid by the State Administration of Foreign Exchange 2014-11-26/en/2014/1126/748.html
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A working conference of the People's Bank of China (PBOC), in conjunction with the national foreign exchange administration conference, was recently held in Kunming, Yunnan province. The conference studied and conveyed the gist of the results of Third Plenary Session of the Seventeenth Central Committee of the CPC, the Fourth Plenary Session of the Seventeenth Central Committee of the CPC, as well as the Central Economic Work Conference. The proceedings provided an overall summary of work related to foreign exchange administration in 2009 and set forth the tasks for foreign exchange administration in 2010 based on an in-depth analysis of current circumstances regarding the balance of payments and receipts and payments of foreign exchange. Yi Gang, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange (SAFE), delivered a speech at the conference on foreign exchange administration work. Deng Xianhong, Fang Shangpu, Wang Xiaoyi, Li Chao, and other leaders of the SAFE, along with the relevant leaders of the divisions, overseas offices, and branches (foreign exchange administration departments) of the SAFE attended the conference. It was pointed out at the conference that in 2009, under the wise leadership of the Party Central Committee and the State Council and the precise guidance of the Party Committee of the PBOC, all foreign exchange administration departments carried out the scientific outlook on development in an all-around manner and earnestly implemented the overall planning of the Central Government on "Sustaining growth, accelerating restructuring, propelling reform, and improving the people's livelihood.In order to sustain the stable development of the foreign-related economy, efforts were made to adjust the direction and emphasis of foreign exchange administration in a timely manner by launching a series of measures to cope with the international financial crisis. The SAFE made efforts to further deepen the reform of the foreign exchange administration system, enhance the role of foreign exchange administration services to satisfy the needs of economic development, improve statistics and supervision of cross-border capital flows, guard against risks caused by abnormal cross-border capital flows, promote disclosure of information and government affairs, and increase the transparency of foreign exchange administration. Efforts were also made to improve the operation and management of foreign exchange reserves, to guarantee the security of foreign exchange reserve assets, and to obtain reasonable returns. All of these measures have played an active role in weathering the global financial crisis as well as in promoting the stable and rapid development of the national economy. It was emphasized at the conference that since the initiation of the reform and opening-up policy China has been active in becoming integrated in the economic globalization. Development of the foreign-related economy was achieved by leaps and bounds, along with a dramatic increase in cross-border foreign exchange receipts and payments. The constantly changing scale, frequency, and form of cross-border capital flows, rapid economic development, and increased opening to the outside world have presented increasing challenges to our countrys foreign exchange administration. Such circumstances require that the foreign exchange administration departments look at issues concerning Chinas economic and financial development from a global perspective, analyze Chinas foreign exchange administration within the framework of an open economy, and enhance the fundamental role of market forces in allocating foreign exchange resources. To this end, all personnel in the foreign exchange administration system should further carry out the scientific outlook on development, put into practice the gist of the contents of the Third Plenary Session of the Seventeenth Central Committee of the CPC, the Fourth Plenary Session of the Seventeenth Central Committee of the CPC, and the Central Economic Work Conference in an all-around manner, consolidate our conviction and work pragmatically to further strengthen and improve foreign exchange administration work, make great efforts to improve the status of the balance of payments, and promote a basic equilibrium in the balance of payments. These efforts should be conducted in compliance with the strategic planning of the Party Central Committee and the State Council to sustain the stable and rapid development of the national economy, so as to serve the comprehensive strategic aim of transforming the pattern of economic development and accelerating economic restructuring. The conference also studied and set the priorities for foreign exchange administration in 2010. These include: (1) Further emancipating our minds, upgrading concepts for foreign exchange administration, transforming administration methods, and enhancing a service consciousness; keeping risks controllable and as much as possible facilitating the operations of economic entities, gradually weakening ex-ante examination and approval, and strengthening ex-post monitoring and analysis; (2) complying with the overall requirements for economic development, further promoting the reforms on the verification of imports and exports, the development of the foreign exchange market, the administration of foreign exchange accounts, the diversification of channels for capital outflows and other key areas, and critical aspects of foreign exchange administration; (3) further improving supervision of abnormal cross-border fund flows, constructing a sound monitoring and warning system, an off-site inspection system, and an emergency management system, strengthening the monitoring and analysis of abnormal cross-border fund inflows and outflows, launching a special campaign to crack down on illegal activities by underground money shops, and preventing and diffusing the risks of cross-border capital flows; (4) boosting the integration of foreign exchange administration data with the administration system, promoting the comprehensive utilization of administration information, streamlining procedures for foreign exchange businesses, and improving the efficiency of monitoring and supervision and the service level; (5) constantly increasing the transparency of policies on foreign exchange administration, broadening the scope of release of statistical data on the balance of payments, reinforcing the integration of laws and regulations with respect to foreign exchange administration, and enhancing interactions and communications between the SAFE and the media and the general public; (6) further improving the foreign exchange reserves operation and management mechanism, enhancing the introduction and training of personnel, and striving to achieve security, and insure and increase the value of the foreign exchange reserve assets; (7) strengthening improvement of Party conduct, clean administration, and construction of the ranks of cadres, and enhancing the capability and level of administration according to the law. 2010-01-06/en/2010/0106/916.html
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Recently the People's Bank of China released data on the state's foreign exchange reserves as of the end of 2009. According to some analyses, in 2009 China witnessed an increase of USD453.1 billion in its foreign exchange reserves. Deducting the trade surplus of USD196.07 billion and the actually utilized foreign capital of USD90.03 billion during the same period, there is a balance of USD167 billion, which is regarded as unaccountable, that is, an inflow of hot money.A reporter interviewed a relevant official of the SAFE on this issue. Q: How do regard the estimation method for the newly-increased foreign exchange reserves minus the trade surplus and minus the actually utilized foreign capital equals hot money,which is presently widely used by the general public? A: We appreciate the analyses from the general public on the operating conditions of the balance of payments from different perspectives, as well as their suggestions on our work on foreign exchange administration. To be frank, the above estimation method is unscientific, thus the conclusion is misleading. With regard to the newly- increased balance of foreign exchange reserves, analysts should not only emphasize factors such as foreign trade conditions, foreign direct investment, and so forth, but also should take into consideration the conditions for cross-border fund flows for trade in service, individuals, external debts, and securities investment as well as the investment income of the foreign exchange reserves, currency conversion, and other factors. A simple deduction of the trade surplus and the actually utilized foreign exchange will not account for the so-called unaccountable reserves, let alone the inappropriate label of hot money. Q: Can you describe in detail how the newly-increased foreign exchange reserves should be analyzed by taking into account the investment income and currency conversion? A: We have noted that some media have taken into consideration the investment income and income from currency conversion to analyze the newly-increased foreign exchange reserves. As per the relevant requirements of the foreign exchange administration, for the time being we cannot disclose the specific data on the investment income and currency conversion. Nevertheless, selection of the relevant data can be used as a reference. For example, according to the changes in the exchange rate index of the USD against other major currencies which is compiled by the FED, the exchange rate of the USD depreciated by 8.5% in 2009. As shown in the data on the structure of global reserves released by the IMF, the non-dollar reserve assets account for nearly 40% of the total reserve assets. Hence, the appreciation of non-dollar assets against the USD in 2009 will inevitably lead to an increase in the balance of foreign exchange reserves in USD (income from currency conversion). As another instance, by use of the frequently-adopted Barclays Return Rate of the Global Bond Integrated Index, the annual average return rate from 2005 to 2009 was 4.8%. Based on that, the aggregate investment income from a certain amount of the balance of reserves for various years can be calculated, i.e., to what extent investment income contributed to the increase in the foreign exchange reserves. Although these analyses are only for reference, they will help prevent significant omissions in the selection of analytical methods, thus their conclusions will be more convincing. Q: Could the increase in foreign exchange reserves in 2009 be better explained, if investment income and currency conversion are taken into consideration? A: With regard to our data, the argument that the increase in foreign exchange reserves in 2009 is unaccountable is unreasonable. Q: Some argue that there will be increasing inflows of short-term speculative funds into China in 2010. How do you regard that? A: With the stable growth of the national economy and the constant decline in the USD interest rate in the past months, those entities involved in foreign exchange businesses (banks, enterprises, individuals, and so forth) are more likely to transfer their overseas assets back to China and to make settlements. Meanwhile, it is possible that some overseas speculative and arbitrage funds will flow into China by means of distribution and infiltration through such channels as trade, individual investment, foreign investment, and so forth. Currently, China maintains a certain level of control over capital accounts. Based on the premise to promote the facilitation of trade and investment, we will continue to intensify efforts to crack down on illegal flows of cross-border funds. Q: What about the progress and achievements in cracking down on illegal flows of cross-border funds during the past year? A: In 2009, by taking full advantage of the United Office for Cracking Down on Criminal Activities of Illegal Foreign Exchange Transactions and closely teaming up with the public security departments, we launched a series of campaigns to crack down on major cases of illegal flows of funds, such as underground money shops, online foreign exchange speculation, and so forth The SAFE uncovered 10 cases of underground money shops, 6 cases of online illegal foreign exchange speculation, and 11 cases of illegal trading of foreign exchange, and discovered more than 61 nests for illegal foreign exchange transactions, involving a total amount of USD3.54 billion. Q: What measures will the foreign exchange administration departments adopt to prevent the inflow of speculative and arbitrage funds in 2010? A: To prevent the inflow of speculative and arbitrage funds, which may affect the stability of the national economy and finance, we will take the following measures: (1) strengthening the construction of the statistical system for the balance of payments, establishing and improving monitoring, an early-warning system, and an emergency plan for the inflows and outflows of cross-border funds; (2) strengthening the administration of cross-border capital flows, continuing to crack down on illegal inflows of funds, and taking appropriate measures to control the channels for the excessive inflow of capital; (3) further promoting the convertibility of the capital accounts, broadening the channels for capital outflows, and facilitating the holding and use of foreign exchange by domestic institutions and individuals; and (4) taking comprehensive and effective measures to promote an equilibrium in the balance of payments by complying with the unified planning of the Central Government. 2010-01-19/en/2010/0119/918.html