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	CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING THE EXCHANGE PURCHASE FOR LOANS REPAYMENT IN ADVANCE ADMINISTRATIVE MEASURES

	(No. 38 [2002] of the State Administration of Foreign Exchange April 22, 2002)


SUBJECT : EXCHANGE PURCHASE FOR LOANS REPAYMENT IN ADVANCE
ISSUING DEPARTMENT : STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 04/22/2002
IMPLEMENT DATE : 04/22/2002
LENGTH : 371 words
TEXT :

In order to enable the enterprises to independently choose opportunities to carry out debt structure adjustment and improve the quality of bank assets, we hereby give the notice on the relevant issues concerning adjusting the administrative measures on the repayment of loans in advance with the purchased exchange, upon the approval by the People's Bank of China:

I. The restrictions on the repayment of domestic foreign exchange loans, external debts and loans converted from external debts in advance with purchased foreign exchange, shall be cancelled.

II. The repayment of loans in advance with purchased exchange shall be approved by the foreign exchange bureau at the debtor's locality. The foreign exchange bureau shall, when examining the application for the repayment of loans in advance with purchased exchange, adhere to the following principles:

(1) the debts have been approved and registered in accordance with the relevant provisions;

(2) the loan contract contains a clause on the repayment of loans in advance, and both the creditor and the debtor have agreed on the repayment;

(3) the debtor shall apply for the repayment of loans in advance with purchased exchange; and

(4) the exchange shall not be purchased unless the debtor's own foreign exchange is not enough.

III. From June 2002, each branch or sub-branch of the State Administration of Foreign Exchange shall indicate at the end of the first statement of the "Series of Statements on Statistics and Monitoring of Capital Accounts" the amount of loans repaid in advance and of the loans repaid with purchased exchange separately under the external debts, loans converted from external debts and domestic foreign exchange loans.

IV. This Notice shall come into force on the date of its distribution. In case Document No. 304 [2001] of the People's Bank of China or any other previous provision is in conflict with this Notice, this Notice shall prevail. Each branch of the State Administration of Foreign Exchange or administrative department of foreign exchange shall, after the receipt of this Notice, transfer it as soon as possible to its sub-branches and the relevant entities. In case of any question, please feed it back in time to the Department of Foreign Investment and External Debt under the State Administration of Foreign Exchange.