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In order to regulate the services of the foreign currency cards issued by the domestic financial institutions (hereinafter referred to domestic cards), and the acquiring service for the bank cards issued by overseas financial institutions (hereinafter referred to overseas cards), to rigidify the administration of the transactions under foreign currency cards, and to clarify the foreign exchange administration policies involved in the consumption and the drawing of cash under foreign currency cards within China and overseas, the relevant issues are hereby notified as follows: I. ACQUIRING SERVICE FOR OVERSEAS CARDS A domestic financial institution shall observe the following provisions in handling the acquiring service for overseas cards: (1) An acquiring financial institution may handling the drawing of RMB cash for the card holder (hereinafter referred to holder) of an overseas card at its service counter or automatic teller machine (hereinafter referred to ATM), but may not allow that holder to draw cash in any foreign currency at its service counter or ATM; (2) Where the holder draws any RMB cash or makes any consumption within China with an overseas card, the acquiring financial institution shall promptly settle the foreign exchange accounts collected by the overseas card-issuing institution; and (3) Where the holder makes any consumption within China with an overseas card, the acquiring financial institution and the merchants (referring to the merchants such as shops, restaurants, and hotels that enter into agreements with financial institutions concerning the payment by bank cards) shall liquidate the expenses in RMB, and not in any foreign currency. II. USE OF THE DOMESTIC CARD On the basis of different objects to which the cards are issued, domestic cards can be divided into individual cards (referring to the foreign currency cards issued to natural persons by financial institutions) and entity cards (referring to the foreign currency cards that are issued to entities, such as corporations or other organizations, by financial institution and that are used by the personnel designated by those entities). According to whether the holder is granted any credit line, the domestic cards can be divided into credit cards (referring to the banks cards issued by financial institutions that grant certain amount of credit line to the holders and that the holders can use within the granted credit line before repaying the money) and debit cards (referring to the bank cards issued by financial institutions that have no credit line and that the holders shall deposit money before using). A domestic financial institution shall observe the following provisions in issuing domestic cards: (1) A holder using the individual foreign currency card may draw RMB case and cash in foreign exchange at the service counter of the card-issuing financial institution; may draw RMB cash at the ATM, but may not draw any cash in foreign exchange at the ATM. A holder using the entity foreign exchange card may not draw any cash in foreign exchange or RMB cash within China. A holder may not deposit any fund in foreign currency in the account of entity foreign currency credit card; (2) Where a holder uses the foreign exchange card to draw any cash in RMB or make any consumption within China, the card-issuing institution shall promptly settle the foreign exchange accounts that are deducted, and transfer the fund in RMB obtained from the exchange settlement to the account of the merchant or pay such fund to the relevant acquiring financial institution; (3) Where a holder uses the foreign currency card overseas, the services provided by the card-issuing financial institution shall be limited to the payment under service trade, and the card may not be used in investment and trade payment under capital account, neither may it be used in the illegal trades and acts prohibited by the state laws; and (4) Where a holder uses the foreign currency card overseas, the accumulative amount of cash drawn in a certain day may not exceed US$1,000 or any other foreign currency with the same value, and the accumulative amount of cash drawn in the current month may not exceed US$5,000 or any other foreign currency with the same value. III. REPAYMENT FOR DOMESTIC CARDS With respect to the advance payment in foreign exchange formed through overdraft under a domestic card, if the holder can present the transaction account statements under the foreign currency card provided by the card-issuing financial institution, the holder is allowed, pursuant to the requirements on convertibility under capital account, to make the repayment with the cash or deposit in foreign currency, or by purchasing foreign exchange with the RMB fund. However, if the transaction in which the holder uses the foreign currency card is prohibited by the state law, the domestic card-issuing financial institution may not process the formalities for purchase of foreign exchange for the holder. With respect to the bad debts under a foreign currency card that haven't been repaid, the card-issuing financial institution shall, pursuant to the relevant provisions, offset such debts with the provision for loan losses, foreign exchange capital or working capital, and may not make the offset by purchasing foreign exchange with RMB fund or by using the exchange settlement capital of the clients. Where the card-issuing financial institution has insufficient foreign exchange capital or working capital, it may apply to its head office for purchasing foreign exchange to supplement the foreign exchange capital pursuant to the relevant provisions. IV. REPORTING SYSTEM FOR LARGE-AMOUNT TRANSACTIONS IN FOREIGN EXCHANGE THROUGH DOMESTIC CARDS With respect to the large-amount deposit, drawing of cash, or consumption transaction a holder makes within China or overseas through the domestic card, the card-issuing financial institution shall, pursuant to the Measures for the Administration of the Financial Institutions' Large-amount and Doubtful Transactions of Foreign Exchange Fund (Order No.3 [2003] of the People's Bank of China) and other provisions, report to the local branch or subsidiary of the SAFE (hereinafter referred to foreign exchange bureau) the large-amount and doubtful foreign exchange transactions. At the same time, if any transaction under a domestic card is in any of the following situations, the card-issuing financial institution shall report to the local foreign exchange bureau for record. The situations include: (1) If the holder's use of individual foreign currency card or account of individual foreign currency card within China or overseas is in any of the following situations, the card-issuing financial institution shall report to the local foreign exchange bureau: a. The accumulative amount of the cash in foreign currency drawn and consumed in one month exceeds US$20,000 or its equivalent; b. The accumulative amount of the cash in foreign currency drawn in one year exceeds US$20,000 or equivalent; or c. The accumulative amount of the cash in foreign currency drawn and consumed in one year exceeds US$40,000 or its equivalent; and (2) If the holder's use of an entity foreign currency card within China or overseas is in any of the following situations, the card-issuing financial institution shall report to the local foreign exchange bureau for record: a. The accumulative amount of the cash in foreign currency drawn overseas and the amount consumed in China and overseas in one month exceeds US$20,000 or its equivalent; b. The accumulative amount of the cash in foreign currency drawn overseas in one year exceeds US$20,000 or its equivalent; or c. The accumulative amount of the cash in foreign currency drawn overseas and the amount consumed in China and overseas in one year exceeds US$60,000 or its equivalent; V. STATISTICS OF TRANSACTIONS MADE THROUGH FOREIGN CURRENCY CARDS (1) Statistics of exchange settlement and sale of foreign exchange With respect to the business of exchange settlement occurred as a result of the holder's use of overseas card to draw RMB cash or to make consumption within China, the acquiring financial institution shall include such business in the statistics of settlement and sale of foreign exchange under non-trade account. With respect to the business of exchange settlement occurring as a result of the holder's use of domestic card to draw RMB cash or to consume within China, the card-issuing financial institution shall include such business in the statistics of settlement and sale of foreign exchange under non-trade account. (2) Report of international balance statistics The foreign exchange bureau will separately formulate relevant operational rules for the international balance statistics relating to foreign currency cards. And before the new provisions are promulgated, the report shall be made pursuant to the Operational Rules for Report of Exchange Business Statistics and the Official Reply of the Department of International Balance under the State Administration of Foreign Exchange to Shenzhen Branch on the Relevant Issues of Indirect Report of International Balance Statistics (No.12 [2002] of SAFE). The branches shall, upon receipt of this Circular, transmit it to the subsidiaries and financial institutions within their respective jurisdiction as soon as possible. Where the domestic card-issuing financial institutions need to modify the charter of bank card as a result of the aforesaid provisions, they shall, within 60 days from the day of implementation of this Circular, submit the modified charter to the banking regulatory agency and SAFE. This Circular shall come into force as of June 1, 2003. Please contact with the department of international balance of this Administration if any problem arises in the implementation. |
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