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This Circular is hereby issued as follows for the purpose of promoting the development of the business of foreign currency bank cards and further regulating the management of foreign currency bank cards: I. DEFINITION In this Circular, the foreign currency bank card includes domestic foreign currency cards, which mean those issued by domestic financial institutions (hereinafter referred to "domestic cards"), and foreign bank cards, which mean those, except Renminbi cards, issued by foreign institutions (hereinafter referred to "foreign cards"). II. CLASSIFICATION OF DOMESTIC CARDS (1) According to the objects to which they are issued, the domestic card may be classified into personal cards, which mean those issued to a natural person, and entity cards, which mean those issued to a legal person or other organization and to be used by persons designated by such entities. (2) According to the consideration as to whether a line of credit is granted to the holder, the domestic card may be classified into credit cards, which, within the line of credit granted by the issuing financial institution, permit the holders to use the cards before payment, and debit cards, the holders of which shall enjoy no line of credit and must make a deposit on the cards before using it. (3) According to the currency for which it is issued, the domestic card may be classified into foreign currency cards, which mean those issued for only one foreign currency, and home and foreign currencies cards, which mean those issued for both Renminbi and one or more foreign currencies. III. ISSUE AND USE OF DOMESTIC CARDS (1) Domestic financial institutions may issue foreign currency entity credit cards, provided that there shall be no foreign exchange deposit on such cards. They may also issue foreign currency entity debit cards to the entity who has its foreign exchange accounts under current account with such institutions, provided that the sum of the balance of the entity debit card and the balance of the foreign exchange account under current account of the entity shall not exceed the limit prescribed for the foreign exchange account under current account. (2) With a personal card, one can withdraw cash in Renminbi in the territory of China, or cash in a foreign currency quoted by the issuing financial institution, over the counter of such institution, but may not overdraw any cash in any foreign currency nor withdraw any cash in any foreign currency on any ATM. Any withdrawal of cash in a foreign currency under a personal card shall be subject to the provisions of SAFE concerning the withdrawals by individuals of cash in foreign currencies within the territory of China. (3) Within the territory of China, no holder of an entity card may withdraw any cash either in Renminbi or in any foreign currency. (4) Cash withdrawals under domestic cards outside the territory of China shall be subject to a limit control. The limit shall be the equivalent of US$1,000 for a day, US$5,000 for a month accumulatively, and US$10,000 for six months accumulatively. (5) Outside the territory of China, a domestic card may be used to pay for consumption under current account, but not for other transactions. The issuing financial institutions shall, in accordance with the codes of prohibited and restricted merchants for the use of domestic cards outside the territory of China, which were determined by SAFE, make a system setup and conduct a strict control on off-line transactions. Those issuing financial institutions failing to complete the system setup due to any technical or any other reasons shall be required to report to the SAFE each improper transaction that has taken place on a monthly basis. IV. ACQUIRING BUSINESS WITH RESPECT TO FOREIGN CARDS (1) With a foreign card, one can withdraw cash in Renminbi within the territory of China, or can withdraw cash in a foreign currency over the counter of a domestic financial institution, but may not withdraw any cash in any foreign currency on any ATM. When handling the business relating to the withdrawal of cash in any foreign currency for a non-resident holder of a foreign card, the domestic financial institution shall carry out the relevant provisions of the SAFE concerning the control of foreign exchange in respect of non-resident individuals. (2) As to the amount, which is not spent, of the cash in Renminbi withdrawn within the territory of China by a non-resident holder of a foreign card, this holder may, within 6 months after such withdrawal and against the original transaction evidence, such as the relevant ATM slip or the slip given over the counter of the acquiring financial institution, have this amount converted back into a foreign currency within the amount withdrawn over the counter of the bank and remit or take it out of China. (3) The making of deposits to foreign cards through domestic financial institutions shall be deemed as external remittance and subject to the relevant provisions of the SAFE. (4) With regard to the acquiring business, in connection with foreign cards, handled by a foreign-funded financial institution within the territory of China, which has not opened Renminbi business, the Renminbi fund required by such institution under bank cards shall be procured through the special Renminbi account for exchange settlement and sales opened with the approval of the branch or sub-branch of the People's Bank of China at the place of the such institution. V. CLEARING, PAYMENT AND EXCHANGE PURCHASE UNDER FOREIGN CURRENCY BANK CARDS (1) The use of a foreign exchange bank card within the territory of China shall be subject to the provisions on prohibition of valuation or settlement in any foreign currency. The clearing between a special domestic merchant (including duty-free shops) and the acquiring financial institution with respect to transactions through a foreign currency bank card shall be done in Renminbi. (2) Domestic card transactions within the territory of China shall, after the deduction of the amount of the cash in any foreign currency withdrawn over the counter, be settled in Renminbi through the domestic clearing channel. Any overdraft arising from domestic transactions shall be paid by the holder of the card in Renminbi. (3) If, for any reason, the clearing with respect to domestic card transactions within the territory of China shall be done through a bank card international organization, the issuing financial institution may, after the clearing in a foreign currency, purchase exchange using the Renminbi amount paid by the holder to meet the advance exchange. Clearing through a bank card international organization means the following two circumstances: clearing of domestic foreign currency card transactions within the territory of China, through a bank card international organization; and the case of "wrong throw", in which the clearing shall be done through a bank card international organization£¬ since a domestic home and foreign currency card was treated by the acquiring financial institution as a foreign currency card, though such card when used within the territory of China shall be regarded as a Renminbi card. (4) The exchange received by the acquiring financial institution from a bank card international organization in connection with foreign currency bank card transactions within the territory of China shall, after the deduction of the amount of the cash in a foreign currency withdrawn over the counter, be promptly settled. (5) Clearing between a special merchant approved to accept, outside the territory of China, foreign currency bank cards, such as a domestic airline company, and an acquiring financial institution may be done in a foreign currency, and the issuing financial institution may make the payment in foreign exchange. (6) For any overdraft arising from external consumption or cash withdrawal under a domestic card, the holder may make a payment either using his owned foreign exchange or that purchased at the issuing financial institution. (7) With respect to the foregoing exchange sales business by an issuing financial institution, the amount of such sales may not exceed the amount of the foreign currency overdraft existing on the domestic card, and shall be directly used to pay off the existing overdraft. (8) Various expenses, annual fees, fees for change of and reapplication for a card under domestic cards shall be calculated and charged in Renminbi. Other expenses may be either withheld by the bank directly from the card with exchange balance or paid by the holder in Renminbi. VI. STATISTICS AND FILING OF THE RELEVANT BUSINESS UNDER FOREIGN CURRENCY BANK CARDS (1) According to the territorial principle, the statistics of exchange settlement and sales under foreign currency bank cards shall be made by the financial institution receiving and settling the foreign exchange, withholding the amount in Renminbi and purchasing foreign exchange. The statistics shall be done in accordance with the following provisions: 1. For foreign cards: exchange settlement arising from acquiring business shall be charged to "tourism under non-trade receipts under receipts from exchange settlement"; the subsequent conversion of the cash in Renminbi withdrawn by a non-resident holder of a foreign card shall be charged to "other non-trade foreign exchange expenditure under non-trade expenditure under expenditure for sales of exchange"; 2. With respect to exchange settlement arising from the use of domestic cards within the territory of China: those arising from personal cards shall be charged to "foreign exchange of domestic residents under non-trade receipts under receipts from exchange settlement"; those arising from entity cards shall be charged to "other non-trade receipts under non-trade receipts under receipts from exchange settlement"; 3. With respect to purchase of exchange in connection with domestic cards: payment and purchase of exchange after the use of a personal card outside the territory of China or after the throw to external clearing of a domestic transaction in connection with a personal card shall be charged to "foreign exchange of domestic residents under non-trade expenditure under expenditure for sales of exchange"; payment and purchase of exchange after the use of an entity card outside the territory of China shall be charged to "exit on business under non-trade expenditure under expenditure for sales of exchange"; payment and purchase of exchange after the throw to external clearing of a domestic transaction in connection with an entity card shall be charged to "other non-trade foreign exchange expenditure under non-trade expenditure under expenditure for sales of exchange". (2) Statistics and declarations of international balance of payments in connection with foreign currency bank cards shall be handled in accordance with the following provisions: 1. In the case of remittance from abroad directly to a domestic card, a declaration for statistics of international balance of payments shall be made indirectly in accordance with the Operational Procedures for Declarations for Statistics of International Balance of Payment through Financial Institutions and the relevant provisions; 2. In the case of withdrawal of any cash in Renminbi by a holder of a foreign card, the domestic bank shall declare the exchange business in accordance with the Operational Procedures for Declarations for Statistics of Exchange Business and the relevant provisions; 3. Matters relating to declarations for statistics of international balance of payment in connection with other business under foreign currency bank cards shall be provided separately. (3) Each issuing financial institution shall, on a consolidated basis, submit to the SAFE the number of items and amounts of transactions and the business of exchange purchase under domestic cards (for the requirements for the submission, see the attached Schedule 1). (4) In the case of any volume deposit, cash withdrawal or consumption transaction under a foreign currency bank card, the domestic issuing financial institution shall report such volume and dubious foreign exchange transactions to the local administration of foreign exchange in accordance with the Measures for the Management of Reports by Financial Institutions on Volume and Dubious Foreign Exchange Transactions and other relevant administrative provisions. (5) The issuing financial institution shall report for archival purpose (for the requirements for such reports, see the attached Schedule 2) to the local administration of foreign exchange any domestic and external transactions under domestic cards as follows. And each local administration of foreign exchange shall report to the administration of foreign exchange at a higher level all dubious transactions for its notice: 1. The aggregate amount of the cash in foreign currencies withdrawn and the amount of external consumption by a holder of a domestic card in a month exceed the equivalent of US$20,000; 2. The aggregate amount of the cash in foreign currencies withdrawn and the amount of external consumption by a holder of a personal card in a year exceed the equivalent of US$40,000; or 3. The aggregate amount of the cash in foreign currencies withdrawn and the amount of external consumption by a holder of an entity card in a year exceed the equivalent of US$60,000. (6) Financial institutions shall make the submissions to the relevant administration of foreign exchange within the first 10 days of each month. Submissions by financial institutions to the SAFE shall be made by both E-mailing and mailing. E-mail Address: yinhangchu@mail.safe.gov.cn. Mail address: Huarong Hotel, No.18 Fucheng Road, Haidian District, Beijing, 100037, to the attention of the Banks' Foreign Exchange Receipt and Expenditure Division, Balance of Payment Department, the State Administration of Foreign Exchange. VII. MISCELLANEOUS (1) The consumption, cash withdrawal limit and report of volume transactions under the subordinate card of a domestic card shall be managed under the same account as the main card. (2) In this Circular, "a month" means a natural month, and "6 months" and "a year" shall be respectively calculated on the basis of successive natural months. (3) ChinaUnionPay Co., Ltd (hereinafter referred to "ChinaUnionPay") shall arrange for the clearing in Renminbi in connection with the domestic transactions under home and foreign currency cards. The issuing financial institutions must submit the card bins of home and foreign currency cards to ChinaUnionPay for download by acquiring financial institutions from the flat of ChinaUnionPay. The acquiring financial institutions shall make proper system setup for bank cards, under which, Renminbi cards shall precede others when being read. Each issuing financial institution shall, on a monthly basis, submit for archival purpose to ChinaUnionPay the amount of transactions under "wrong throw" and the list of the acquiring institutions making such "wrong throw". (4) Financial institutions developing the foreign currency bank card business shall inform customers of the policy of the foreign exchange control in connection with foreign currency bank cards in an overall and objective manner, and inform the public of the provisions concerning the scope of the uses of foreign currency bank cards and the management of overdraft and payment. Any unilateral publicity or misleading representation shall be prohibited. (5) Where, pursuant to this Circular, any domestic issuing financial institution is required to make an amendment to its articles of bank cards, a copy of such amendment shall, after the same has been approved by the relevant regulatory body, be submitted to the SAFE for archival purpose. (6) Each local administration of foreign exchange shall follow and inspect the implementation of regulations and policies concerning foreign exchange control and dubious information occurring in the publicity and business development, by domestic financial institutions under its jurisdiction, in connection with foreign currency bank cards. Any financial institution that makes any unilateral or false publicity shall be ordered to make corrections. The administration of foreign exchange may, pursuant to the Regulations of the People's Republic of China on Foreign Exchange Control and other relevant regulations, impose sanctions upon those financial institutions, merchants or individuals which/who violate the provisions concerning foreign exchange control. VIII. EFFECTIVE DATE This Circular shall come into force as of September 1, 2004. The Circular on Issues concerning the Management of Foreign Currency Bank Cards (No.[2003]65 of SAFE) shall be annulled as of the same date. After receipt of this Circular, each branch administration shall promptly transmit the same to the sub-branch administrations and Chinese- and foreign-funded financial institutions under its jurisdiction. Problems arising from the implementation of this Circular shall be promptly reported to the Balance of Payment Department, the State Administration of Foreign Exchange (Telephone: 010-68402313, 68402109; Fax: 68402315). Attachments: Schedule 1: Statistical Table of Transactions and Exchange Purchases under Domestic Foreign Currency Cards (omitted) Schedule 2: Statement of Dubious Cash Withdrawals and Consumption under Domestic Foreign Exchange Cards (omitted) |
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