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With a view to regulating the foreign exchange administration on auto financing companies, we hereby make the following notice on issues concerning foreign exchange administration of auto financing companies: I. In case an auto financing company is a solely foreign owned or Sino-foreign joint venture company, it may apply for opening foreign exchange capital account in a designated forex bank within China upon the strength of the following documents and materials at the branches and sub-branches of the SAFE at its locality (hereinafter referred to the "foreign exchange bureau"): 1. Written application for opening accounts (including the basic information of the company, the opening bank, and other contents); 2. The reply document of China Banking Regulatory Commission for approving its preparation for the establishment; 3. The pre-approval notice on the name of the company issued by the state administrative department for industry and commerce; and 4. Other documents and materials that should be provided under the requirements of the foreign exchange bureau. A Sino-foreign joint venture auto financing company shall also provide the joint venture agreement or contract of the Chinese and foreign party when applying for opening foreign exchange capital account. An auto financing company shall put on archives the relevant conditions on opening the account at the foreign exchange bureau within 5 workdays after opening the foreign exchange capital account. The number of foreign exchange capital accounts opened by any auto financing company may not exceed three. II. The income scope of capital accounts of an auto financing company shall be the registered capital remitted inward by foreign investors, and the outlay scope shall be bank deposits, foreign payment under current account, and other foreign exchange outlay approved by the foreign exchange bureau. III. Where an auto financing company that has opened capital account does not get the reply of approval of China Banking Regulatory Commission for opening business after the expiry of preparation for establishment, the group of preparation for the establishment may apply to the foreign exchange bureau for remitting out of the territory the capital remained in the account and close the foreign exchange capital account. IV. In case any auto financing company needs to settle foreign exchange on the capital in the foreign exchange account, it shall file an application upon the strengthen of the following documents and materials, and go through formalities for foreign exchange settlement at the designated forex bank upon the strength of the document of approval issued by the foreign exchange bureau: 1. Written application for settlement of foreign exchange (including statements on the use of the capital settled in foreign exchange within 3 months from the date of application); 2. The bank check sheet between the current foreign exchange capital account of the company and the RMB account; 3. The reply document of China Banking Regulatory Commission for approving its opening of business (which shall be provided at the time of settlement of foreign exchange for the first time); and 4. Other materials that should be provided under the requirements of the foreign exchange bureau. V. The amount of Renminbi equal to the foreign exchange settled each time upon application by an auto financing company may not, in principle, exceed the balance between the total Renminbi capital whose use has been determined and the existing total Renminbi capital in recent three months. The capital settled in foreign exchange of an auto financing company shall be restricted to providing loans for buying automobiles, and paying the routine running expenses of the company and other purposes upon the approval of the foreign exchange bureau. VI. No auto financing company may use foreign exchange capital that has not been settled as foreign exchange to pledge for Renminbi loans. VII. The capital verification procedures for the inflow of capital of overseas shareholders of any auto financing company shall follow the Notice of the Ministry of Finance and the State Administration of Foreign Exchange on Further Strengthening Capital Verification Work of Foreign Investment Enterprises and Perfection of Foreign Exchange Registration System on Foreign Investment (No.1017 [2002] of the Ministry of Finance). VIII. An auto financing company may only grant Renminbi loans, and may only receive Renminbi when collecting the principals and interests of loans returned by the customers. IX. An auto financing company shall abide by the relevant provisions of the Measures for the Administration of Auto Financing Companies, and may not absorb foreign exchange deposits of any domestic shareholders, or borrow foreign loans, or handle foreign guaranty. X. In case any auto financing company needs to pay profits to foreign shareholders, it shall file an application to the foreign exchange bureau upon the strengthen of the following documents and materials, and go through formalities for purchase and payment of foreign exchange at the designated forex banks upon the strength of the document of approval of the foreign exchange bureau: 1. Written application; 2. Tax certificates; 3. Relevant profit distribution resolution of the board of directors of the company; 4. The capital verification report of the recent term; 5. Profit and profit distribution reports of the year of occurrence of profit of the company, which is audited by the accountant firms; 6. Bank check sheet of foreign exchange capital account of the company of the current term; and 7. Other materials that should be provided under the requirements of the foreign exchange bureau. In case any auto financing company fails to remit out the foreign exchange purchased by the profits that shall be paid to foreign shareholders in the current year within 4 months after the end of each fiscal year, it shall put this on archives at the foreign exchange bureau. XI. In case an auto financing company occurs any business of international balance of payments, it shall handle statistical declaration of international balance of payment in accordance with the provisions of the Measures for the Statistical Declaration of International Balance of Payment, Business Operational Rules on Conducting Statistical Declaration on International Balance of Payment through Financial Institutions, and the Business Operational Rules on Declaration of Overseas Assets and Liabilities and Losses and Profits by Financial Institutions. XII. Where the SAFE and its branches and sub-branches make inspection on the foreign exchange capital account of any auto financing company and conditions of settlement of foreign exchange and purchase and payment of foreign exchange, the auto financing company shall positively cooperate with the relevant inspection work, and may not provide false materials. XIII. In case any auto financing company violates this Notice and other foreign exchange administration provisions, the SAFE and its branches and sub-branches shall give it punishments in accordance with the Regulation of the People's Republic of China on Foreign Exchange Administration and other foreign exchange administrative provisions. XIV. This Notice shall come into force as of August 20, 2004. The power to interpret it shall remain with the SAFE. |
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