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Article 1. This regulation is promulgated according to the Article 7 of the Regulation of Foreign exchange Administration of People's Republic of China in an attempt to regulate activities of domestic foreign exchange transfer. Article 2. Foreign exchange transfer referred to in this regulation is activities that domestic entities conduct remittance and transfer in foreign exchange through financial institutions in foreign exchange operation. Article 3. The State Administration of Foreign exchange and its branches (hereinafter "SAFE" in brief) exercise supervision on domestic foreign exchange transfer. Article 4. Foreign exchange transfer between domestic entities shall apply to this regulation. Foreign exchange transfers such as inter-bank borrowing, funds settlement etc between financial institutions shall apply to other regulations promulgated by SAFE. Article 5. Any entity and individual shall not quote in foreign exchange for settlement in China, and financial institutions shall not conduct foreign exchange transfer for customers except under the circumstances specified in Article 6, 7 and 8 of this regulation. In case SAFE has other regulations, transfer shall be conducted accordingly. Article 6. Under circumstances listed below, domestic entities shall apply to financial institutions and present specified valid documents and commercial bills. Financial institutions shall process foreign exchange transfer after verifying valid documents and commercial bills. (1) If entrusting party under agent exports is a foreign-funded enterprise or a domestic entity that is permitted to hold foreign exchange proceeds, the agency shall apply to a financial institution for transfer and present a reserved copy of agent contract, an export contract, valid documents and commercial bills, entrusting party's Foreign exchange Registration Certificate of Foreign-funded Enterprises (a xerox copy) or a Utilization Certificate of Foreign Exchange Account (a xerox copy). Financial institutions shall process foreign exchange transfer after verifying valid documents and commercial bills, and mark "Trade, Export foreign exchange proceeds collection, transfer in original currency", date of receiving foreign exchange and amount in remittance postscript; (2) If entrusting party under agent imports is a foreign-funded enterprise or a domestic entity that is permitted to hold foreign exchange proceeds, entrusting party shall present a reserved copy of agent agreement, a Foreign Exchange Registration Certificate of Foreign-funded Enterprises and a Utilization Certificate of Foreign exchange Account and apply to a financial institute for transfer; (3) With respect to winning an international bid under international loan, if both the bid issuer and the bid winner are domestic entities, the bid issuer shall transfer project funds to the bid winner upon presentation of bid contract and bid-winning proof documents; (4) Domestic entities in export & import businesses shall pay foreign insurance and transportation fees to domestic insurance and transportation institutions from its own foreign exchange account upon presentation of an export-import contract, a reserved copy of receipts of insurance and transportation fee; (5) Domestic insurance institutions shall pay indemnity to domestic entities upon presentation of an export-import contract, and a reserved copy of insurance document; (6) Repayments of principal and payment of interest of foreign exchange loans extended by domestic Chinese-funded financial institutions shall be effected upon presentation of a lending contract, a notice of principal repayment and interest payment, a Foreign Exchange (Indirect) Loan Registration Certificate; (7) Domestic entities shall pay principal and interest of indirect external debt to domestic Chinese-funded financial institutions upon presentation of an External Debt Registration Certificate or a Foreign Exchange (Indirect) Loan Registration Certificate, an indirect lending contract, a notice of principal repayment and interest payment and a verification note of principal repayment and interest payment issued by SAFE; (8) Domestic entities shall pay foreign exchange rental to domestic financial leasing company upon presentation of a leasing contract and a Foreign Exchange (indirect) Loan Registration Certificate; (9) Foreign-funded enterprises shall make foreign exchange transfer between its own current accounts within the ceiling amount and between foreign exchange capital accounts upon presentation of a Foreign Exchange Registration Certificate of Foreign-funded Enterprises and a Verification Note of Ceiling Amount for Foreign Exchange Current Account issued by SAFE; In case of external payments, valid documents and commercial bills for external payments shall also be presented; (10) Foreign exchange remitted or taken by foreign investors as investment shall be transferred from a transient account to a foreign exchange capital account of a foreign-funded enterprise upon presentation of a Foreign Exchange Registration Certificate of Foreign-funded Enterprises, proof documents of economic and trade administration and a business license of industrial and commercial administration. Article 7. Under circumstances listed below, domestic entities shall apply to SAFE with specified materials; financial institutions shall conduct foreign exchange transfer upon presentation of verification note of SAFE: (1) Foreign-funded investment enterprises, when investing in China, shall present a report on verification of capital of a CPA office, approval documents of a newly invested enterprise, an approved contract and constitution, a Foreign Exchange Registration Certificate of Foreign-funded Enterprises and other documents required by SAFE; (2) An enterprises invested by a foreign-funded investment company shall present a Foreign Exchange Registration Certificate of Foreign-funded Enterprises, a profit distribution resolution of board of directors and a proof document of duty clearing when remitting its foreign exchange profits to the foreign-funded investment company; (3) With respect to investing foreign exchange profits in other domestic enterprises, foreign investors of a foreign-funded enterprise shall present a report on verification of capital of a CPA office, an annual finance audit report, a profit distribution resolution of board of directors and a proof documents of duty clearing, a confirmation of earning reinvestment of foreign investors, approval documents from administrative department which approved the original project, a Foreign Exchange Registration Certificate of Foreign-funded Enterprises and other documents required by SAFE; (4) Foreign investors of a foreign-funded enterprises, when increasing capital in another enterprise by using foreign exchange profits, shall present a profit distribution resolution of board of directors, a proof document of duty clearing, a confirmation of earning reinvestment, approval documents from administrative department which approved the original project, a Foreign Exchange Registration Certificate of Foreign-funded Enterprises and other documents required by SAFE; (5) Chinese and Foreign investors of a foreign-funded enterprises, when investing foreign exchange profits to increase capital in the enterprise, shall present a profit distribution resolution of board of directors, a proof document of duty clearing, a confirmation of earning reinvestment, approval documents from administrative department which approved the original project, a Foreign Exchange Registration Certificate of Foreign-funded Enterprises and other documents required by SAFE; (6) When registered capital of a foreign-funded enterprise is transferred to other domestic entities, a report on verification of capital of a CPA office, a resolution of board of directors and a proof document of duty clearing, approval documents from administrative department which approved the original project, a transfer agreement, a Foreign Exchange Registration Certificate of Foreign-funded Enterprises and other documents required by SAFE shall be presented; (7) In case Chinese investors of a foreign-funded enterprise pay registered capital in foreign exchange with approval, approval documents of the authority and the contract and constitution of the enterprise shall be presented. Article 8. Under circumstances listed below, domestic entities shall apply to financial institutions with a Foreign Exchange Account Utilization Certificate and relevant material, and financial institutions shall make foreign exchange transfer according to the scope of receipts and payments of the foreign exchange account verified by SAFE: (1) Duty-free shops approved by the Customs transfer payments for goods to its parent company; (2) Domestic trans-remittance of Post Office for international postal remittances; (3) Trans-remittance or funds of disbursement transferred from shipping agency to its sub-agencies in domestic ports; rebates of residual funds of disbursement transferred from sub-agencies to general agency; (4) Funds of disbursement for shipping operation transferred by sea shipping company in international sea shipping operation to its subsidiaries and transportation fees submitted by its subsidiaries. Article 9. In case domestic entities violate this regulation to make a foreign exchange transfer within the territory of China, SAFE shall give punishment according to the Article 45 of the Regulation of Foreign Exchange Administration of People's Republic of China. In case of criminal offense, a criminal suite shall proceed. Article 10. In case a financial institution makes foreign exchange transfer without verifying valid documents and commercial bills according to this regulation, SAFE shall give a heavier punishment according to Article 45 of the Regulation of Foreign Exchange Administration of People's Republic of China. Article 11. The interpretation of this regulation shall rest with SAFE. Article 12. This regulation shall come into effect as of October 15, 1997. |
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