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.