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I. GENERAL PROVISIONS Article 1. For the purpose of adapting to the new situation after China's accession to the World Trade Organization, decreasing the operational costs of enterprises and improving the administration of foreign exchange of current accounts, these Detailed Rules are formulated in accordance with the Regulation of the People's Republic of China on the Administration of Foreign Exchange, the Provisions on the Administration of Domestic Foreign Exchange Accounts and the Notice on Further Adjustment of Policies Concerning the Administration of Foreign Exchange Current Accounts. Article 2. The term "domestic institutions" as mentioned in these Detailed Rules refers to the state organs, enterprises, public institutions, social organizations, armies, etc., including foreign-funded enterprises but excluding financial institutions. II. OPENING AND USE OF FOREIGN EXCHANGE CURRENT ACCOUNTS Article 3. An institution that meets any of the following requirements may apply to the State Administration of Foreign Exchange (hereinafter referred to "SAFE") or its branch, namely the administration of foreign exchange (hereinafter referred to "AFE") of the place where the institution is located, for opening a foreign exchange current account: (1) Having foreign-related business operation right or foreign exchange incomes from current items upon examination and approval of or upon archival filing in the competent organ; or (2) Having foreign exchange income from such special sources and/or for such special purposes as donations, international aid or international postal remittances. Article 4. The scope of income within the foreign exchange current account shall include the foreign exchange income under the current account and the payment from it shall be foreign exchange payment under the current account and foreign exchange payment under the capital account approved by the AFE. The scope of the income and of the payment of the foreign exchange current account from such special sources and/or for such special purposes as donations, international aid or international remittances shall be defined according to the relevant contract or agreement. Article 5. When an institution applies to the AFE at the place where it is located for opening a foreign exchange current account, it shall submit the following documents: (1) An application letter for opening a foreign exchange current account; (2) Its original business license or registration certificate, and photocopies of thereof; (3) The original approval or permit for doing foreign trade business, and photocopies of thereof, or the Foreign Exchange Registration Certificate in the case of a foreign-invested company (hereinafter referred to "the Registration Certificate", see Annex 1), or documents certifying the foreign exchange income under the current account (e.g., foreign exchange settlement document); (4) The original Certificate of Organization Code, and photocopies thereof; and (5) Other materials as required by the AFE. Article 6. The application and the supportive documents shall be subject to the examination of the AFE, who shall issue an "Approval for Opening of Foreign Exchange Current Account" (hereinafter referred to "Account Opening Approval", see Annex 2) to the applicant if it meets the requirements. Article 7. When granting an approval for opening a foreign exchange current account, the AFE shall set a quota for the account and shall give a clear indication of this quota in the Account Opening Approval. Article 8. The quota for the foreign exchange current account of the institution shall be 20% of the total foreign exchange income of the institution in the previous year. The quota of the foreign exchange current account for such special sources and/or for such special purposes as donations, international aid and international postal remittances shall be 100% of the income from such special sources. In case the institution did not have any foreign exchange income under current account in the year prior to its application for opening of the foreign exchange current account, the initial quota shall be no more than US$100,000. SAFE may adjust the standard for setting quotas of foreign exchange current accounts. Article 9. The quota of foreign exchange current accounts shall be denominated in US dollars. If the foreign exchange current account is in any other foreign currency, the AFE shall convert it into US dollars at the internal uniform conversion rate at the time of the opening of the account. Article 10. The SAFE shall, in January each year, set for its branch offices a total quota for the income of foreign exchange current accounts of their regions according to the foreign exchange income from current account calculated in the international balance declaration forms reported by the different regions. The total quota for the income of foreign exchange accounts in a region shall be 25% of the total foreign exchange income under current account in the previous year in that region. SAFE may adjust the standard for setting quotas of foreign exchange current accounts for different regions according to the national situation of international balance. Article 11. In the case of any material change in the amount of foreign exchange income under the current account, the AFEs at different places may, according to the actual needs of their regions and of the institutions and under the total quotas approved by the SAFE for their regions, increase or decrease the quotas of the foreign exchange current accounts of specific institutions in their regions. Such adjustment can be made once a year as is the principle and the sum of the quotas of the institutions in the region shall not exceed the regional total quota. Article 12. The institutions shall open their foreign exchange current accounts at banks or other financial institutions that are authorized to engage in the foreign exchange business (hereinafter referred to "financial institutions for account opening") up the strength of their Account Opening Approval. The financial institutions for account opening shall, after opening a foreign exchange current account for an institution, indicate in the Account Opening Approval the account number, the name of the foreign currency, date of opening, and the quota, and shall give the fourth page of the Account Opening Approval to the applicant institution. The institution shall, within 10 working days after the date of account opening, return the fourth page to the AFE in the place the financial institution for account opening is located and apply for a Foreign Exchange Account Use Certificate (See Annex 3). The financial institution for account opening shall, after opening a foreign exchange current account for a foreign-invested company, indicate in the Account Opening Approval and the Registration Certificate the account number, the name of the foreign currency, date of opening and the quota. The financial institution for account opening shall, within the first 5 working days of each month, give the fourth page of the Account Opening Approval to the AFE in the place where the financial institution for account opening is located. In places where the foreign exchange account control information system (hereinafter referred to "the Account System") is employed and where effective control over the foreign exchange current accounts are implemented through the Account System (hereinafter referred to the "places using the Account System"), the financial institution for account opening shall, on the next day after the account is opened, transfer the account opening information to the local AFE through the Account System in accordance with the Regulations on the Data Connection Ports between the Foreign Exchange Account Control Information System and the Data System of the Designated Banks. The financial institutions need not give the fourth page of the Account Opening Approval to the institution and the institution need not apply for the Foreign Exchange Account Use Certificate. Article 13. An Institution is allowed to open only one foreign exchange current account as is the principle. Approvals of the AFE are not required when a foreign exchange current account of the same nature is opened at the same bank but in different foreign currencies. In places where the Account System is employed, the qualified Institutions are, according to their actual needs, allowed to open more than one foreign exchange current account and are not limited by the number of such accounts or the number of designated banks where they can open such accounts. The financial institutions for account opening shall accept the requests of the Institutions to open such accounts and shall transfer the account opening information to the AFE through the Account System. In case a domestic institution opens two or more multi-currency foreign exchange current accounts, the AFE shall set a quota for each account and for each foreign currency. The distribution of the quota among different accounts shall be determined by the domestic institutions, provided that the total of the quotas for all accounts in all foreign currencies shall not exceed the total approved quota. Article 14. Within the quota set by the AFE, the foreign exchange income under the current account may be converted to RMB or may remain unconverted and retained in the foreign exchange current account; if exceeding the quota set by the AFE, it shall be converted into RMB. Article 15. When the balance in the foreign exchange current account exceeds the quota set by the AFE, the Financial Institution for Account Opening shall notify in time the domestic institution to go through the formalities for converting the excessive amount into RMB. In case the domestic institution fails to go through the formalities in time for converting it into RMB, the Financial Institution for Account Opening shall have the right to convert the excessive amount into RMB within 10 working days after the balance in the account exceeds the quota and report the conversion to the domestic institution within 5 working days after the conversion. Article 16. Domestic institutions are not allowed in principle to transfer their foreign exchange funds in their foreign exchange current accounts to their savings accounts. Where it is indeed necessary, it shall apply to the AFE at the place where the account was opened by presenting an application letter, the Foreign Exchange Account Use Certificate or the Registration Certificate, the original Account Opening Approval and conciliation statements. The foreign exchange fund that is transferred to a savings account shall be regulated subject to the quota management of the foreign exchange current account. In places where the Account System is adopted, the domestic institutions are allowed to transfer their foreign exchange funds in their foreign exchange current accounts to their savings accounts in the Financial Institutions for Account Opening. But the foreign exchange funds that are transferred to savings accounts shall be subject to the quota management within the foreign exchange current account. The Financial Institutions for Account Opening shall use the same serial number on the original Account Opening Approval and fill in the information on opening the savings account and report it to the AFE. Article 17. Foreign exchange funds of a domestic institution are allowed to be transferred among the foreign exchange current accounts of the same nature at different Financial Institutions for Account Opening. III. CHANGES TO THE FOREIGN EXCHANGE CURRENT ACCOUNTS Article 18. After opening a foreign exchange current account, if a domestic institution wishes to change the name of the holder of the account or its quota or any other information of the account, it shall apply to the AFE in the place where the account is opened by presenting such documents as an application letter, the Foreign Exchange Account Use Certificate or the Registration Certificate, the original Account Opening Approval and the conciliation Statements. With the Approval for Changes in the Foreign Exchange Current Account (hereinafter referred to as Account Change Approval, See Annex 4), the Institution shall go through the formalities for such changes at the Financial Institution for Account Opening. The Financial Institution shall, within 5 working days after the changes are made, return the fourth page of the Account Change Approval to the AFE in the place where the account is opened. Article 19. In the event that a domestic institution needs to open a foreign exchange current account in a place other than the place where it is registered, it shall file a request to the AFE in its registration place. With the Filing Certificate for Opening Foreign Exchange Current Account in Places Other Than the Registration Address (See Annex 5) and the documents listed in Article 4, it shall file an application for opening the account to the AFE in the place where it wishes to open the account. It shall, upon the strength of the Account Opening Approval issued by the AFE in the place where it wishes to open the account, shall go through the formalities of account opening at the Financial Institutions for Account Opening. The AFE in the place where it wishes to open the account shall report in writing on the opening account to the AFE in the place where the institution is registered. The foreign exchange current account opened by the institution in a place other than its registration address shall be subject to the regulation of the AFE in the place where the account is opened. The quota of the foreign exchange current account opened by the domestic institution in the places other than its registration address shall be determined by the AFE in the place where the account is opened in accordance with the foreign exchanged income declared in the previous year by the domestic institution in the local international balance declaration forms, which shall be subject to the total quota for foreign exchange current accounts in the place where the account is opened. IV. CLOSURE AND CANCELLATION OF THE FOREIGN EXCHANGE CURRENT ACCOUNTS Article 20. In the event that a domestic institution wishes to close its foreign exchange current account, it shall apply to the AFE. With the Approval for Closure of Foreign Exchange Current Account (See Annex 6), the institution shall go through the formalities for the closure at the Financial Institution for Account Opening, which shall, within 5 working days after the closure is made, return the fourth page of the Approval for Closure of Foreign Exchange Current Account to the AFE in the place where the account is opened. In the case of closure of a foreign exchange current account in a place other than the registration address of a domestic institution, the AFE in the place where the account is opened shall report in written form on the closure of the account to the AFE in the place the Institution is registered. After the closure of the foreign exchange current account of a domestic institution, the balance in the closed account may be transferred to any other foreign exchange current accounts (if any) of the same nature of the Institution. In the event that there is no other foreign exchange current account of the same nature of the Institution, the funds therein must be converted into RMB. Article 21. In the event that no foreign exchange income or payment occurs in the foreign exchange current account of a domestic institution within one year after the account is opened, the Financial Institution for Account Opening shall report it to the AFE every January and the AFE shall issue a Notice of Cancellation (See Annex 7) notifying the institution and the Financial Institution for Account Opening of the cancellation of the account. The domestic institution shall, within 5 working days after receiving the Notice of Cancellation, go through the formalities for closing the account at the Financial Institution for Account Opening. If it does not go through the formalities for the closure of the account within the time limit, the Financial Institution for Account Opening shall close the account within 5 working days after receiving the Notice of Cancellation. The balance in the account shall be converted into RMB, while the RMB funds in the account shall be dealt with in accordance with the relevant provisions of the People's Bank of China. The Financial Institution for Account Opening shall return the fourth page of the Notice of Cancellation to the AFE of the place where the account is opened within the first 5 working days of each month. Article 22. The foreign exchange current account opened by an institution for such special sources and/or for such special purposes as donation, aid and international postal remittances, etc., shall be closed upon the exhaustion of the fund in the accounts in accordance with Article 20 herein. V. CONTROL OVER THE FOREIGN EXCHANGE CURRENT ACCOUNTS Article 23. The Financial Institution for Account Opening shall submit a Monthly Statement on Foreign Exchange Current Accounts (See Annex 8) to the AFE within the first 5 working days of each month. The Branches of the SAFE shall submit the Monthly Statements on Foreign Exchange Current Accounts of their own regions to the SAFE within the first 10 working days of each month. In places where the Account System is employed, the financial institution for account opening shall submit through the Account System a daily statement on the foreign exchange current accounts. The financial institutions for account opening or the branch offices of the SAFE are not required to submit their Monthly statements as stipulated in the preceding paragraph. Article 24. The AFEs shall conduct an annual review over the foreign exchange current accounts within their respective jurisdiction. In places where the Account System is employed, such annual reviews are no longer required. Article 25. For the institutions that did not open any foreign exchange settlement account or foreign exchange special account prior to the implementation of these Detailed Rules but file an application for opening a foreign exchange current account, their applications shall be filed in accordance with these Detailed Rules. The AFEs shall examine and approve the applications and set quotas for them in accordance with these Detailed Rules as well. For the institutions that have already opened foreign exchange settlement accounts and/or foreign exchange special accounts before the implementation of these Detailed Rules and file an application for opening a foreign exchange current account after the implementation of these Detailed Rules, the AFEs shall consolidate the foreign exchange settlement accounts and the foreign exchange special accounts and approve their applications for account opening and set a quota for them in accordance with these Detailed Rules. The institutions that have opened foreign exchange settlement accounts and/or foreign exchange special accounts before the implementation of these Detailed Rules and that do not file an application for opening any foreign exchange current account after the implementation of these Detailed Rules are allowed to continue using before, 31 December 2003, their foreign exchange settlement accounts and their foreign exchange special accounts according to their approved scope of income and payment and their approved quotas. The AFEs at all places may, in light of their control capacity and the actual conditions in their places, choose their own appropriate time to handle the applications for the consolidation of the two foreign exchange accounts and for new quotas before December 31, 2003. Article 26. In the special economic regions approved by the State Council and are subject to bonded customs control (including bonded zones, export processing zones and diamond trading exchanges), the domestic institutions shall open and operate their foreign exchange current accounts in accordance with the regulations presently in force. In places where the Account System is employed, such foreign exchange current accounts shall be regulated through the Account System. Article 27. Any institution or financial institution for account opening which violates these Detailed Rules shall be punished by the AFE in accordance with the Regulations on Foreign Exchange Control of the People's Republic of China and the Regulations on Domestic Foreign Exchange Accounts. VI. SUPPLEMENTARY PROVISIONS Article 28. The Foreign Exchange Use Certificates and the Registration Certificates shall be printed uniformly by the SAFE. The Account Opening Approvals, the Account Change Approvals, the Filing Certificates for Opening Foreign Exchange Current Account in Places Other Than the Registration Place, the Approvals of Closure of Account, and the Approvals of Cancellation of Account shall be designed by SAFE and printed by the branch offices of SAFE with a one-month period of validity. Article 29. The power to interpret these Detailed Rules shall remain with the SAFE. Article 30. These Detailed Rules shall be implemented as of October 15, 2002. Annex: omitted. |
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