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In order to simplify the formalities and procedures of administrative examination and approval, the State Administration of Foreign Exchange (hereinafter referred to as the SAFE) has, according to the Administrative License Law of the People's Republic of China and the relevant laws on the administration of foreign exchanges, decided to further improve the administration pattern of foreign exchange under capital accounts and the administrative licensing procedures and transfer the power of examination and approval of foreign exchange businesses under some capital accounts to each branch and foreign exchange administration department (hereinafter referred to as the branches). The notice on the relevant issues is hereby given as follows: I. EXAMINING AND APPROVING THE OVERSEA GUARANTEE Except for the overseas guarantee provided for overseas institutions, the overseas guarantee in any other form (including the overseas house mortgage to which an overseas institution or natural person is the guaranteed person) that is in line with the existing laws shall be subject to the examination and approval of the branch where the guarantor lives. II. EXAMINING AND APPROVING THE REPURCHASE OF OVERSEAS LISTED STOCKS BY THE H-SHARE COMPANIES THEMSELVES Where the repurchase of overseas listed stocks by the H-share companies themselves involves the examination and approval of the purchase or payment of foreign exchanges or overseas account opening, and if the amount of foreign exchange to be purchased or paid is less than USD 25 million, it shall be subject to the examination and approval of the local branch; if the amount of foreign exchange to be purchased or paid is more than USD 25 million (including USD 25 million), it shall still be reported to the SAFE for examination and approval by the local branch. III. EXAMINING AND APPROVING THE SETTLEMENT, PURCHASE AND PAYMENT OF FOREIGN EXCHANGES BY THE SECURITIES, TRUST, FINANCIAL AND FINANCIAL LEASING COMPANIES The purchase of foreign exchange by a securities company, trust investment company, financial company of enterprise groups or financial leasing company that conducts the foreign exchange businesses so as to complement the foreign exchange capital (or foreign exchange operational capital) or the settlement of foreign exchange capital (or foreign exchange operational capital) that is beyond the requirements shall be subject to the examination and approval of the local branch. All the branches shall regularly report the conditions on the payment and settlement of foreign exchanges of the aforesaid institutions within their respective jurisdictions to the Capital Account Management Department of the SAFE. The settlement of foreign exchange returns of the above-mentioned institutions shall be subject to the examination and approval of the local branch or an authorized sub-branch at the lower level. The above-mentioned institutions shall, within four months after the end of each accounting year or within ten working days after the board of directors approved the distribution scheme of that year, file an application for the foreign exchange settlement of net returns with the SAFE. IV. EXAMINING AND APPROVING THE PAYMENT OF SOCIAL SECURITY FUND IN THE FORM OF FOREIGN EXCHANGE THROUGH THE REDUCTION OF HELD STATE SHARES BY OVERSEAS LISTED COMPANIES Where the domestic shareholder of an H-share company or a Red-chip company applies for appropriating the foreign exchange incomes from the reduction into the national social security fund, it shall be subject to the examination and approval of the local branch. Each branch may, according to the application of an enterprise, examine and approve the direct appropriation of foreign exchange incomes from the reduction into the foreign exchange account as opened by the Ministry of Finance. V. IMPROVING THE ADMINISTRATION OF SPECIAL FOREIGN EXCHANGE ACCOUNTS (FOR EXPENSES) OF FOREIGN INVESTORS The quota for special foreign exchange accounts (for expenses) of foreign investors shall be adjusted from the original USD 100,000 to USD 100,000 or 5% of the total investment amount as approved by the investment administrative department, and the valid term of the accounts shall be extended from the original three months to six months. VI. SIMPLIFYING THE EXAMINATION AND APPROVAL OF FOREIGN TRANSFER OF PERSONAL ASSETS As to the applications for foreign transfer of personal assets exceeding the equivalent value of RMB500,000 (transfer due to immigration and transfer due to inheritance), the capital account office or the relevant business office of each branch may, after obtaining the consent of the deputy director (director-general) in charge of foreign exchange businesses, directly report them to the Capital Account Management Department of the SAFE for approval by way of official documents of the office. Upon transfer of the above-mentioned power of examination and approval to the lower levels, all the branches shall establish corresponding internal control systems, strengthen the training of functionaries, intensify the strength of follow-up supervision and inspection of the examined and approved matters, and handle the formalities on reporting for archival filing according to the relevant provisions; and shall, when carrying out specific examination and approval matters, strictly enforce the relevant laws and the relevant provisions as set down in the Operational Procedures for Foreign Exchange Businesses under Capital Accounts; and shall timely report to the SAFE for instructions in the case of significant circumstance or any issue concerning policies. The SAFE shall regularly and irregularly inspect the work of examination and approval of each branch. Additionally, each branch shall further strengthen the statistical monitoring and timely and accurately submit the relevant data to the SAFE in strict accordance with the relevant provisions. |
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