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In order to regulate the foreign exchange management relating to the use of foreign capitals for non-performing asset disposal of financial asset management companies, this Circular is hereby made on the relevant issues as follows: I. When selling or transferring non-performing assets to a foreign party, a financial asset management company shall report the issues regarding the foreign exchange income and expenditure and the remittance to the State Administration of Foreign Exchange for approval within 15 working days after the trading program is approved by the department in-charge, and submit the following documents: (1) an application report on the issues regarding the foreign exchange income and expenditure and the remittance incurred in the asset selling and transferring; (2) an approval or registration document of the department in-charge on the trading program concerning the foreign sale or transfer of non-performing assets; (3) the relevant terms in the contract of asset sale and transfer; and (4) an asset management and service agreement, if the asset management company offers such management and service. II. Any foreign investor or its agent that has purchased or accepted the non-performing assets of a financial asset management company shall go through the archival-filing registration formalities on selling or transferring non-performing assets at the local foreign exchange branch where the assets are located or at the branch as designated by the State Administration of Foreign Exchange within 15 working days upon the conclusion of the transaction, and submit the following documents: (1) an approval document of the State Administration of Foreign Exchange on the sale or transfer of the relevant assets; (2) a filled archival-filing registration form of foreign-related disposal of non-performing asset (see Attachment 1); (3) an inventory of assets to be sold or transferred (its contents shall be detailed, including such fundamental information as the types of assets, par value of the assets, debtors, term of debts and interest rates, etc.); and (4) if an application is put forward by the agent, the relevant agency agreement, the agent's business license and operational permit shall be provided in addition. III. A foreign investor or its domestic agent may (purchase foreign exchanges) remit abroad the proceeds from reselling and retransferring the non-performing assets or the incomes from businesses. The approval formalities shall be gone through at the foreign exchange branch where the assets are located or the branch as designated by the State Administration of Foreign Exchange for the (purchase of foreign exchanges) overseas remittance of proceeds, and a filled application form for remitting abroad the foreign party's proceeds from the foreign-related disposal of non-performing asset (see Attachment 2), an archival-filing registration form of foreign-related disposal of non-performing asset, a list of items to be disposed of and a certificate of proceeds shall be provided in addition. Where the tax shall be paid according to the taxation regulations of our country, the relevant tax payment receipt or certificate shall be provided. IV. When handling the archival filing of assets sold or transferred, if the assets to be filed are under any of the following circumstances, the enterprise that has received equity investment shall abide by the relevant laws and regulations of the State and go through equity assessment and confirmation formalities in accordance with the relevant regulations on the control of foreign exchanges: (1) if the assets to be filed contain equities; (2) if the credits to be filed are turned into equities of the debtor's enterprise; (3) if the physical assets to be filed are contributed after conversion into cash at home; or (4) if a foreign investor uses the proceeds from domestic-related disposal of non-performing asset for domestic reinvestment. V. A financial asset management company that contributes its cash converted from non-performing assets to establish a foreign-invested enterprise shall abide by the relevant provisions on the control of foreign exchanges relating to foreign-invested enterprises and go through the relevant formalities at the foreign exchange branch where the foreign-invested enterprise is registered. VI. If the non-performing assets to be disposed of by using foreign capitals contain the third party guarantee, the financial asset management company shall notify the guarantor of the original debtor-creditor contract. When handling the archival-filing registration of transferring non-performing assets, the foreign investor or its agent shall indicate the particulars about the guarantee in the asset archival-filing registration. The State Administration of Foreign Exchange and its branches shall not register any guarantee that injures social public interests or acts against laws or regulations. After a financial asset management company disposes of the non-performing assets by utilizing foreign capitals, the debtor or the third party shall not offer any other guarantee for the sold or transferred credits other than the original guarantee. VII. In case the investor's ownership of the filed assets is lost due to the buyback, sale (transfer), recovery, stock transfer or other causes, the foreign investor or its agent shall go through the formalities on canceling the archival filing of credits, physical assets or equities at the foreign exchange branch where the registration is handled within 15 working days after the loss of the ownership. VIII. In case a financial asset management company sells or transfers non-performing assets to the institutions or individuals in Hong Kong, Macao and Taiwan and to the natural persons with foreign nationalities, it shall be implemented by referring to this Circular. IX. In case any other financial institution disposes of, upon the approval of the department in-charge, non-performing assets by utilizing foreign capitals, it shall be implemented by referring to this Circular. X. Anyone violating this Circular shall be punished pursuant to the Regulation on the Control of Foreign Exchanges or other relevant provisions. XI. This Circular shall come into force as of January 1, 2005. Attachments: 1. Archival-filing Registration Form of Foreign-related Disposal of Non-performing Asset (omitted) 2. Application Form for Remitting Abroad the Foreign Party's Proceeds from the Foreign-related Disposal of Non-performing Asset (omitted) |
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