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Chapter I General provisions
Article 1
These regulations are formulated with a view to improving the
management of the exchange system, maintaining an equilibrium in
the
balance of payments and promoting sound economic growth.
Article 2
The government agencies of the State Council in charge of the
administration of the exchange system and their local offices
(hereafter
the exchange administration agencies for both) shall exercise
exchange
management in accordance with the law and assume the
responsibility for
the implementation of the regulations.
Article 3
Foreign exchange as referred to in the regulations includes
means of payments and assets denominated in foreign currency for
international settlement as the following:
1. foreign currencies, including bank notes and coins;
2. payment instruments denominated in foreign currency,
including
bills, bank certificate of deposit and certificate of postal
deposit etc.
3. securities denominated in foreign currency, including
government bonds, corporate debentures and stocks etc.;
4. Special Drawing Rights and European Currency Units; and
5. other assets denominated in foreign currency.
Article 4
The payment in and transfer of foreign exchange for current
international transactions shall not be subject to the
government control or restriction.
Article 5
The regulations shall govern all activities related to the
receipts and payments of foreign exchange as well as foreign
exchange operations of domestic entities, individuals, foreign
establishments, and foreign nationals in China.
Article 6
The government adopts a reporting system for balance of payments
statistics. All entities and individuals involved in balance of
payments transactions shall fulfill their obligations for
reporting balance of payments statistics.
Article 7
Foreign currency is prohibited for circulation and shall not be
quoted for pricing or settlement in the territory of the
People's Republic of China.
Article 8
All entities and individuals shall have the right to reveal or
expose any activities in violation of the regulations on
exchange management.
All entities and individuals who reveal, expose or assist in
stopping various activities in violation of exchange regulations
on exchange management shall be rewarded and the confidentiality
of their identity shall be ensured.
Chapter II Foreign exchange for current account transactions
Article 9
All foreign exchange receipts of domestic entities for current
account transactions shall be repatriated and shall not be
deposited abroad in violation of the relevant government
regulations without authorization.
Article 10
All foreign exchange receipts for current account transactions
shall be sold to the designated foreign exchange banks in
accordance with the regulations issued by the State Council on
the sale and purchase of foreign exchange and making payments in
foreign exchange, and such receipts may also be upon approval,
deposited in the foreign exchange account at the designated
banks for foreign exchange operations.
Article 11
Purchase of foreign exchange for current account transactions
shall be conducted with the designated foreign exchange banks,
in accordance with the regulations issued by the State Council
on the sale and purchase of foreign exchange and making payments
in foreign exchange, upon the presentation of valid documents
and commercial bills.
Article 12
The collection of export proceeds and the payments for imports
in
foreign exchange by domestic entities shall be processed in
accordance with the relevant government regulations governing
the verification procedures for export proceeds and import
payments.
Article 13
Foreign exchange owned by individuals can be held at their own
discretion, deposited in banks or sold to the designated foreign
exchange banks.
Individuals' foreign exchange savings deposit shall be placed
with banks on a voluntary basis, withdrawn freely and bear
interest with confidentiality for depositors' identity ensured.
Article 14
The purchase of foreign exchange for personal travel abroad and
other miscellaneous expenses shall be granted within the
specified limit.
Individuals may apply for the purchase of foreign exchange over
and above the limit at the government agencies in charge of
foreign exchange. And the request for such purchase shall be
approved if it proves to be for bona fide transactions.
Individuals carrying foreign exchange into or out of China shall
declare their foreign exchange in the customs office.
Individuals shall present to the customs office valid documents
for carrying a large sum of foreign exchange exceeding the
specified limit.
Article 15
The remittance and/or carrying of foreign exchange abroad for
such income derived from the possession of assets in China shall
be granted upon the presentation of the specific certifying
documents at the designated foreign exchange banks.
Article 16
Foreign assets held by Chinese citizens residing in China in the
form of payment instruments and securities denominated in
foreign currency etc.
shall not be taken or sent abroad without authorization of the
exchange administration agencies.
Article 17
The purchase of and payment in foreign exchange abroad for the
legitimate income in Renminbi for foreign establishments and
foreign
nationals in China shall be granted upon the presentation of the
supporting documents and statement of charges at the designated
foreign exchange banks.
Article 18
Foreign exchange sent or carried in by foreign establishments
and
foreign nationals in China can be held at their own discretion,
deposited in designated banks or sold to the designated foreign
exchange banks. Such foreign exchange can also be remitted or
taken abroad upon the presentation of valid documents.
Chapter III Foreign exchange for capital account transactions
Article 19
Unless otherwise specified by the State Council, all foreign
exchange receipts for capital account transactions shall be
repatriated.
Article 20
All foreign exchange receipts for capital account transactions
shall be placed in the foreign exchange account at the
designated foreign exchange banks in accordance with the
relevant government regulations;
such receipts can be also sold to the designated foreign
exchange banks upon the approval by the exchange administration
agencies.
Article 21
The source of foreign exchange for overseas investment by
domestic entities shall be reviewed by the exchange
administration agencies before the application for such
investments is filed for approval by the relevant government
agencies. If approval is granted, remittance of funds shall then
take place in accordance with the regulations on overseas
investment issued by the State Council.
Article 22
External borrowing in loans shall be undertaken in accordance
with the relevant regulations by the government agencies
designated by the State Council, financial institutions and
other enterprises duly authorized by government agencies of the
State Council in charge of exchange administration.
External borrowing in loans by foreign-funded enterprises shall
be filed with the exchange administration agencies for records.
Article 23
The issue of bonds abroad denominated in foreign currency by
financial institutions requires the approval by the government
agencies of the State Council in charge of exchange
administration before the issue proceeds in accordance with the
relevant government regulations.
Article 24
External guarantee shall only be offered by qualified financial
institutions and enterprises meeting the government requirements
and
subject to the approval by the exchange administration agencies.
Article 25
The government adopts a registration system for external debt.
All domestic entities shall register external debt in accordance
with the regulations formulated by the State Council on
monitoring statistics of external debt.
The government agencies of the State Council in charge of
exchange administration shall take the responsibility for
collecting and monitoring statistics of external debt and
publish these statistics on a regular basis.
Article 26
The currency holding denominated in Renminbi belonging to the
foreign counterparts of foreign-funded enterprises, having been
terminated in accordance with the law, can be converted into
foreign exchange at the designated foreign exchange banks and
then sent or taken abroad after the liquidation and tax
payments. All the foreign exchange belonging to the Chinese
counterpart investors shall be sold to the designated foreign
exchange banks.
Chapter IV Foreign exchange operations for financial
institutions
Article 27
Financial institutions shall have the approval by the exchange
administration agencies for conducting foreign exchange
transactions, and a license for such operations is also
required.
No entities or individuals are allowed to undertake foreign
exchange operations without the approval by the exchange
administration agencies.
Financial institutions duly authorized for foreign exchange
operations shall never operate beyond the approved business
scope.
Article 28
Financial institutions duly authorized for foreign exchange
operations shall open foreign exchange accounts for their
clients and conduct business operations in accordance with the
relevant government regulations.
Article 29
Financial institutions undertaking foreign exchange operations
shall be subject to the reserve requirement for foreign exchange
in accordance with the relevant government regulations, comply
with the regulations on asset and liability ratios concerning
their foreign exchange operations and set aside provisioning
reserves.
Article 30
Designated foreign exchange banks shall use their own-funds in
Renminbi to purchase foreign exchange.
The foreign exchange revolving funds used by designated foreign
exchange banks for settlement shall be within a specified limit,
the
magnitude of which shall be decided upon by the People's Bank of
China in consideration of the actual circumstances.
Article 31
The foreign exchange operations by financial institutions are
subject to inspection and supervision by the exchange
administration agencies.
Financial institutions undertaking foreign exchange operations
shall submit to the exchange administration agencies the balance
sheet, income statement, other financial reports and information
for foreign exchange operations.
Article 32
Financial institutions shall file with the exchange
administration agencies for the termination of foreign exchange
operations. Once the termination of foreign exchange operations
is approved, these financial institutions shall settle their
claims and liabilities in foreign currencies and have their
license for foreign exchange operations revoked.
Chapter V Renminbi exchange rate and foreign exchange market
Article 33
The exchange rate for Renminbi is a single, managed floating
exchange rate based on market demand and supply.
The People's Bank of China announces the exchange rate of
Renminbi against major currencies on the basis of the prevailing
exchange rates in the inter-bank foreign exchange market.
Article 34
The trading of foreign exchange in the market shall comply with
the principle that advocates transparency, openness, fairness,
and honesty.
Article 35
The number of currencies traded in the market and the trading
methods are decided upon and reviewed by the government agencies
of the State Council in charge of the administration of the
exchange system.
Article 36
Designated foreign exchange banks and other financial
institutions involved in foreign exchange operations are dealers
in the inter-bank foreign exchange market.
Based on the exchange rates announced by the Peoples Bank of
China and the specified margins, designated foreign exchange
banks and other financial institutions undertaking foreign
exchange operations can quote the buying rate and selling rate
for their clients and conduct the trading of foreign exchange
accordingly.
Article 37
The government the agencies of the State Council in charge of
the
administration of exchange system shall supervise the foreign
exchange market cross the country in accordance with the law.
Article 38
In light of the orientation of monetary policy and the
developments in foreign exchange market, the People's Bank of
China shall regulate foreign exchange market in accordance with
the law.
Chapter VI Legal responsibilities
Article 39
To penalize the evasion scheme listed as follows, the exchange
administration agencies shall order the foreign exchange in
question to be repatriated, impose its conversion and place a
penalty fine in the range of more than 30 percent and less then
5 times the amount of foreign exchange under the evasion scheme.
In case of criminal offense, a criminal suit shall proceed:
1. to place foreign exchange deposit abroad without
authorization and in violation of government regulations;
2. to act in defiance of the government regulations on the sale
of foreign exchange to the designated foreign exchange banks;
3. to remit or take foreign exchange abroad in violation of the
government regulations;
4. to take or mail abroad through postal services certificates
of
foreign exchange deposit and securities denominated in foreign
currencies without authorization of the exchange administration
agencies; and
5. other types of exchange evasion scheme.
Article 40
to penalize the illegal exchange arbitrage listed as follows,
the
exchange administration agencies shall serve a warning, impose
the
conversion of foreign exchange and place a penalty fine in the
range of more than 30 percent and less then 5 times the amount
of foreign exchange under the arbitrage scheme. In case of
criminal offense, a criminal suit shall proceed:
1. to pay, in violation of the government regulations, in
Renminbi or in kind for imports that require payment in foreign
exchange or for other similar types of expenses;
2. to pay in Renminbi for local expenses on behalf others and
get paid back in turn in foreign exchange;
3. to invest in China on the part of overseas investors in
Renminbi or with goods purchased locally without authorization
of the exchange administration agencies;
4. to purchase foreign exchange from designated foreign exchange
banks with invalid documents, contracts and bills; and
5. other types of illegal arbitrage activities.
Article 41
The exchange administration agencies shall confiscate the
illegal
income generated from unauthorized foreign exchange operations
undertaking without approval by the exchange administration
agencies and order the stop of such operations. In case of
criminal offense, a criminal suit shall proceed.
The exchange administration agencies shall order the financial
institutions that conduct any activities without authorization
beyond the prescribed business scope for foreign exchange
operations to redress the case, confiscate the illegal income,
if any, and impose a penalty fine in the range of one to five
times the amount of the illegal foreign exchange income; if no
illegal income is involved, a penalty fine of 100, 000 to 500,
000 Yuan shall be imposed.
In case of serious offense or failure to redress the case in
time, the exchange administration agencies shall order these
institutions to rectify their business or revoke their license
for foreign exchange operations. In case of criminal offense, a
criminal suit shall proceed.
Article 42
In case that designated foreign exchange banks fail to comply
with the government regulations on the sale and purchase of
foreign exchange, the exchange administration agencies shall
order the banks to redress the case, issue a public reprimand,
confiscate the illegal income and impose a penalty fine in the
range of 100, 000 to 500, 000 Yuan. In case of serious offense,
operations for the sale and purchase of foreign exchange shall
be suspended.
Article 43
In case that financial institutions act in violation of the
regulations governing exchange rate, deposit and lending rates
for foreign exchange and operations in foreign exchange market,
the exchange administration agencies shall order the
institutions to redress the case, issue a public reprimand,
confiscate the illegal income and impose a penalty fine in range
of one to five times the amount of the illegal income in
question. If no illegal income is involved, a penalty fine in
the range of 100, 000 to 500, 000 Yuan shall be imposed. In case
of serious offense, the exchange administration agencies shall
order the institutions to rectify their business or revoke their
license for foreign exchange operations.
Article 44
To penalized any activity listed as follows undertaken by
domestic entities in violation of the regulations governing
external debt, the exchange administration agencies shall serve
a warning, issue a public reprimand and impose a penalty fine in
the range of 100, 000 to 500, 000 Yuan. In case of criminal
offense, a criminal suit shall proceed:
1. to process external borrowing without authorization;
2. to issue bonds denominated in foreign currency abroad without
authorization and in violation of the relevant government
regulations;
3. to provide guarantee for external obligations without
authorization
and in violation of the relevant government regulations; and
4. other activities in violation of the regulations on external
debt.
Article 45
In case that the domestic entities undertake any activity
involving illicit use of foreign exchange listed as follows, the
exchange administration agencies shall order these entities to
redress the case, impose the conversion of foreign exchange,
confiscate the illegal income and impose a penalty fine no more
than the equivalent amount of foreign exchange in question. In
case of criminal offense, a criminal suit shall proceed:
1. to use foreign exchange in China for pricing or settlement;
2. to pledge foreign exchange in lien without authorization; and
3. to change the designated use of foreign exchange without
authorization; and
4. other types of illicit use of foreign exchange.
Article 46
To penalize unauthorized trading, disguised trading and illicit
merchanting of foreign exchange, the exchange administration
agencies
shall serve a warning, impose the conversion of foreign
exchange, and
place a penalty fine in the range of more than 30 percent of and
less than 3 times the amount of the foreign exchange in
question. In case of criminal offense, a criminal suit shall
proceed.
Article 47
In case that domestic entities open foreign exchange accounts in
China or abroad without authorization, rent, transfer of
arbitrage foreign exchange accounts in violation or the
regulations governing foreign exchange account or use the
foreign exchange beyond the designated purpose without
authorization, the exchange administration agencies shall order
these entities to redress the case, close the foreign exchange
accounts, issue a public reprimand and impose a penalty fine in
range of 50, 000 to 3000, 000 Yuan.
Article 48
In case that domestic entities forge, alter, rent, transfer or
make a multiple use of the verification certificate for import
payment and export proceeds in violation of the regulations
governing the verification procedures for foreign exchange, or
fail to comply with verification procedures prescribed by the
relevant regulations, the exchange administration agencies shall
serve a warning, issue a public reprimand, confiscate the
illegal income and impose a penalty fine in the range of 50, 000
to 300, 000 Yuan. In case of criminal offense, a criminal suit
shall proceed.
Article 49
In case that financial institutions, duly authorized to
undertake
foreign exchange operations, act in violation of the Article 29
and 31, the exchange administration agencies shall order these
institutions to redress the case, issue a public reprimand and
impose a penalty fine in the range of 50, 000 to 300, 000 Yuan.
Article 50
If the party penalized for violation contests the verdict and
the
penalty imposed by the exchange administration agencies, the
party may appeal to the exchange administration agencies at the
immediate higher level to review the case within 15 days after
receiving the penalty notice; the exchange administration
agencies at the immediate higher level shall decide on the
review within two months after receiving the appeal for review.
If the party contests the review decision, the party may appeal
to the People's Court in accordance with the law.
Article 51
Domestic entities acting in violation of the regulations on
exchange management shall be penalized in accordance with these
regulations; and the management and those directly responsible
for the violation shall be disciplined. In case of criminal
offense, a criminal suit shall proceed.
Chapter VII Ancillary provisions
Article 52
The definitions of the terms in these regulations are as
follows:
1. "domestic entities" refer to enterprises and pubic
institutions, government agencies, social organizations and
armed forces etc., including foreign-funded enterprises.
2. "designated foreign exchange banks" refer to banks duly
authorized by the exchange administration agencies to undertake
the sale and purchase of foreign exchange.
3. "individuals" refer to Chinese citizens and foreign nationals
staying in China for more than one year.
4. "foreign establishments" in China refer to foreign diplomatic
agencies in China, consulates, resident representative offices
in China and offices of foreign non-government organizations in
China etc..
5. "foreign nationals" in China refer to resident staff members
of foreign establishments in China, foreigners working for
domestic entities in China and overseas foreign students etc. .
6. "current account transactions" refer to those components in
the current account of the balance of payments, such as goods,
services and unilateral transference..
7. "capital account transactions" refer to the increase and
decrease of assets and liabilities in the balance of payments as
a result of the inflow and outflow of capital, including direct
investment, loans and portfolio investment' etc..
Article 53
The exchange regulations governing bonded areas shall be
formulated separately by the exchange administration agencies of
the State Council.
Article 54
The exchange regulations governing border trade and
counter-trade of border residents shall be formulated separately
by the exchange
administration agencies of the State Council on the basis of
these
regulations.
Article 55
These regulations shall take effect April 1, 1996. The
Regulations on the Exchange System of the People's Republic of
China issued by the State Council on December 18, 1980 and the
related detailed rules shall be repealed at the same time. |
