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According to the resolution made by European Union (EU) financial ministerial meeting in November 1999, Euro banknote shall begin to circulate officially as of January 1, 2002. The period when original currencies of the countries in the Euro Zone and Euro are used simultaneously shall be shortened from planned 6 months to 2 months. Thus, currencies currently circulating in the Euro Zone (hereinafter referred to "original currencies") shall stop circulating as of March 1, 2002 (please refer to Attachment I), and Euro shall be the unique official currency circulating in the Euro Zone. In order to assist banks in China to get ready, and ensure smooth foreign exchange businesses of domestic entities, individuals and banks themselves, we hereby give some instructions as follows: I. To change original currency accounts into Euro accounts. All spot exchange accounts in original currencies shall be converted into spot exchange accounts in Euro before December 31, 2001. Original spot exchange accounts shall be closed or cancelled. All the banknote accounts in original currency shall be changed into banknote accounts in Euro on January 1, 2002. The original banknote account shall be closed or cancelled. After the switchover, the category maturity, interest rate, and value date of the Euro account shall be the same as the original one. II. All the assets and liabilities recorded in original currencies shall be recorded in Euro before December 31, 2001. Vouchers of import L/C, bill collection, and outward remittance shall be dominated in Euro. Inward remittance dominated in original currencies shall only be discharged in Euro or converted into other convertible currencies or Renminbi. As of January 1, 2002, account statement, credit/debit declaration form, banker's draft, and other certificates provided by the bank shall be denominated in Euro instead of in original currencies. III. Banknote exchange. Technically as of January 1, 2002, the bank shall provide exchange service between banknote of original currencies and of Euro. As of December 1, 2001, the ECB shall begin to provide Euro banknote to economies outside of the Euro Zone for open market operation. The member bank of EUROSYSTEM may provide Euro banknote to the bank outside of the Euro Zone. Each bank shall contact actively with its correspondent banks to ensure Euro banknote supply. Each bank shall decide and publish in advance the deadline of exchange between banknote of original currencies and of Euro according to the timetable of the commercial bank in Euro Zone for stopping accepting banknote deposit of original currencies. IV. Exchange rates arrangement. Each bank shall convert original currency accounts, assets and liabilities into Euro ones based on fixed rates prescribed in 971/98 (EC) resolution of EU on May 3, 1998. During the course of conversion, six significant digits shall be kept. The exchange rate cannot be round off. However, clearance and entering into the account book shall be conducted according to the principle of being round off. Two digits after the point shall be kept. When converting banknote in original currencies into banknote in Euro, the bank shall not charge its clients in principle. V. Withdrawal and deposit of Euro banknote. As of January 1, 2002, the bank shall provide the service of Euro banknote selling and withdrawing to its clients, and stop providing the service of original currency banknote selling and withdrawing to its clients. Each bank can begin to accept Euro banknote deposits. VI. Each bank conducting Euro transactions and banknote selling & buying shall publish the exchange rate of Euro or buying rate and selling rate of Euro banknote in time. VII. In case of individuals (including nonresidents) exchanging Euro banknote of more than US$ 10,000 equivalent at one time, the bank shall report the case to SAFE. VIII. Each bank shall arrange concerned staff members to take part in the training of Euro banknote discrimination so as to control risks. IX. Each subsidiary of State Administration of Foreign Exchange (SAFE) shall adjust in time internal administrative data, balance ceiling of the enterprise's foreign exchange account, and data of external debt and foreign exchange on-lending according to fixed exchange rates (refer to Attachment 2) to ensure the conformity between foreign exchange administrative data and the fact. X. Each subsidiary of SAFE and bank shall do its best to propagandize relevant policies and implementing measures to concerned domestic entities and individuals to avoid confusion. Each bank shall formulate detailed implementing measures according to conditions. Each subsidiary of SAFE shall inform the City Commercial Bank and foreign-funded banks under its jurisdiction in time. In case of any problem and suggestion during implementation, timely report shall be made to the BOP department of SAFE. Contact Person: Tian-yi Zhu, Jian-dong Xu Telephone: 010-68402310, 6840215 Fax: 010-68402315 Attachments: (omitted) |
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