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	CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON ADJUSTING THE ADMINISTRATION POLICY OF FOREIGN EXCHANGE CURRENT ACCOUNTS UNDER INTERNATIONAL ENGINEERING PROJECTS

	(No. 90 (2003) of the State Administration of Foreign Exchange promulgated on August 5, 2003, which shall come into force as of September 1, 2003)


SUBJECT : FOREIGN EXCHANGE CURRENT ACCOUNTS; INTERNATIONAL ENGINEERING PROJECTS
ISSUING DEPARTMENT : STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 08/05/2003
IMPLEMENT DATE : 09/01/2003
LENGTH : 814 words
TEXT :

On October 15, 2002, the State Administration of Foreign Exchange (SAFE) promulgated and put in force the Notice of the State Administration of Foreign Exchange on the Further Adjustment of Policies Concerning the Administration of Foreign Exchange Current Accounts (No. 87£Û2002£Ýof the State Administration of Foreign Exchange), in which the decision was made to lift the qualifications for opening the foreign exchange current accounts for Chinese-funded enterprises, consolidate the foreign exchange settlement account and the foreign exchange special account into a single foreign exchange current account, uniformly apply a quota management to the foreign exchange current accounts and unify the administrative policies on the foreign exchange current accounts for both Chinese and Foreign-funded enterprises. Judging from the situation since their implementation, such new policies have facilitated the business activities of enterprises in the context of market economy, reduced the operational cost of enterprises, propelled the reform of foreign exchange settlement and sales system and achieved good results. In order to push forward the reform of the administrative policies on the foreign exchange current accounts and adapt to the needs for improving the international competitiveness of enterprises in the market economy, the State Administration of Foreign Exchange has decided to make modest adjustment to the administrative policies on the foreign exchange current accounts under items such as international projects contracting. The relevant issues are hereby notified as follows:

I. CURRENT ACCOUNT FOR SPECIAL SOURCES AND DESIGNATED PURPOSES

The foreign exchange current accounts under the following items shall be incorporated into the foreign exchange current accounts from special sources and for designated purposes, with the quota approved at the amount of 100% of the foreign exchange income:

(1) the foreign exchange current accounts under international projects contracting or international labor service;

(2) the foreign exchange current accounts under international marine transportation and shipping agency, or freightage agency;

(3) the foreign exchange current accounts under international tendering;

(4) the foreign exchange current accounts under temporary collection and payment that need to be transferred to other domestic institutions or persons after the receipt of foreign exchange from overseas.

II. HAVING FOREIGN EXCHANGE CURRENT ACCOUNT

The domestic institutions that meet the requirements mentioned in Article 1 of the present Provisions and have already opened foreign exchange current accounts, may, after the present notice becomes effective, apply to the local branches / sub-branches of the State Administration of Foreign Exchange (hereinafter referred to the foreign exchange administrations) for adjustment of the quotas. The foreign exchange administrations shall process the approval formalities for the alteration of the foreign exchange current accounts in accordance with the provisions of the present Notice.

III. NOT HAVING FOREIGN EXCHANGE CURRENT ACCOUNT

The domestic institutions that meet the conditions set forth in Article 1 of the present Provisions and have not yet opened foreign exchange current accounts, may apply to the foreign exchange administrations for opening accounts on the basis of the actual needs. The foreign exchange administrations shall approve the account opening and fix the account quotas in accordance with the provisions of the present Notice.

IV. REGIONAL FOREIGN EXCHANGE CURRENT ACCOUNT QUOTA

When various SAFE branches approve the opening of foreign exchange current accounts or adjust the account quotas for the domestic institutions in accordance with the provisions of Article 1 of the present Notice, the total quotas for the foreign exchange current accounts within their own regions may exceed those previously fixed by the State Administration of Foreign Exchange. The State Administration of Foreign Exchange shall, in the light of the situation on the present adjustment of administrative policies on the foreign exchange current accounts, readjust and distribute the total regional quotas for the local SAFE branches.

V. OTHER

The administrative policies on other foreign exchange current accounts that are not mentioned in the present Notice shall still be implemented in accordance with the Notice of the State Administration of Foreign Exchange on the Further Adjustment of Policies Concerning the Administration of Foreign Exchange Current Accounts and the Implementation Rules for the Administration of Foreign Exchange Current Accounts of Domestic Institutions.

VI. EFFECTIVE DATE

The present Notice shall come into force as of September 1st 2003. In case any discrepancy exists between the previous provisions and the provisions of the present Notice, the latter shall prevail.

After receiving the present Notice, all SAFE branches should transmit it to the sub-branches, the designated foreign exchange banks and the relevant organizations under their respective jurisdictions at the earliest possible date, and submit the report on the adjustment of quotas for foreign exchange current accounts to the Department of Current Accounts Administration, State Administration of Foreign Exchange before the end of September 2003. Upon receiving the present Notice, all designated Chinese-funded foreign exchange banks shall transmit it to their respective branches (sub-branches). Should you have any problems in its implementation, please feed back to the State Administration of Foreign Exchange in time.