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	ANNOUNCEMENT OF THE CHINA BANKING REGULATORY COMMISSION ABOUT FURTHER OPENING RMB BUSINESS TO FOREIGN-FUNDED FINANCIAL INSTITUTIONS

	(No. 2 (2003) Announcement of China Banking Regulatory Commission promulgated on October 24, 2003 and implemented as of December 1, 2003)


SUBJECT : FOREIGN-FUNDED FINANCIAL INSTITUTIONS; RMB BUSINESS
ISSUING DEPARTMENT : CHINA BANKING REGULATORY COMMISSION
ISSUE DATE : 10/24/2003
IMPLEMENT DATE : 12/01/2003
LENGTH : 368 words
TEXT :

According to the commitments that China made during its negotiations for entering the World Trade Organization (WTO), China shall, within two years after its accession to the WTO, expand the geographic areas, in which foreign-funded financial institutions are allowed to engage in RMB business, to Jinan, Fuzhou, Chengdu and Chongqing, and shall permit foreign-funded financial institutions to provide RMB services to Chinese enterprises in the areas that RMB business has already been opened. It is hereby notified of the following:

From December 1, 2003 on, any foreign-funded financial institution established in Jinan, Fuzhou, Chengdu and Chongqing may, in accordance with the Regulations of the People's Republic of China on the Administration of Foreign-funded Financial Institutions (hereinafter referred to Regulations) and the Detailed Rules for the Implementation of the Regulations on the Administration of Foreign-funded Financial Institutions (hereafter referred to the Detailed Rules), submit an application to the local banking regulatory institution dispatched by the CBRC, who in turn reports, level by level, to the CBRC for examination and approval. Any foreign-funded financial institution that has already been granted to engage in RMB business may expand its RMB business to the above-mentioned four cities.

From December 1, 2003 on, any foreign-funded financial institution, upon the approval of the CBRC, may provide RMB services to Chinese enterprises in the areas that RMB business has already been opened. When a foreign-funded financial institution applies to engage in the RMB business of Chinese enterprises, it shall meet the requirements: (a) Making profits for two consecutive years before the application is filed; (b) Other prudent requirements provided by the CBRC, including reasonable corporate governance structure, good risk control system, perfect interior control system, effective management information system, good business performance, no record of serious violations, and effective anti-money laundering measures. A foreign-funded institution that meets the aforesaid requirements may, in accordance with the relevant regulation, file an application to the local banking regulatory institution dispatched by the CBRC, who in turn reports, level by level, to the CBRC for examination and approval.

When a foreign-funded financial enterprise failing to obtain the permit to engage in RMB business files such an application, it may simultaneously apply to engage in the provision of RMB services to Chinese enterprises.