(Promulgated by the People's Bank of China on June 20, 1996)
Contents
Chapter I General Provisions
Chapter II Settlement, Sale and Payment of Foreign Exchange under Current Account
Chapter III Settlement, Sale and Payment of Foreign Exchange under Capital Account
Chapter IV Supervision and Control of Foreign Exchange Settlement, Sale and Payment
Chapter V Supplementary Provisions
Chapter I General Provisions
Article 1
For the purposes of standardizing the acts in foreign exchange settlement, sale and payment, and realizing the convertibility of Renminbi under current account, these Regulations are hereby enacted.
Article 2
Every bank which carries on the foreign exchange business shall, pursuant to these Regulations and within its business scope approved by the People's Bank of China and the State Administration of Exchange Control, conduct its businesses in connection with foreign exchange settlement and sale, opening of foreign exchange accounts as well as external payment.
Article 3
Domestic organizations shall timely repatriate their foreign exchange earnings into the territory, except as otherwise provided by the State.
Article 4
Domestic organizations and residents, foreign organizations stationed in China, and foreigners coming to China shall follow these Regulations when making foreign exchange settlement and purchase, opening foreign exchange accounts and making external payment.
Article 5
Domestic organizations and residents, when making payment to or receiving payment from abroad via banks which carry on the foreign exchange business, shall accomplish the statistical reporting on international payment in accordance with the Measures Governing Statistical Reporting on International Payment and other relevant regulations.
Chapter II Settlement, Sale and Payment of Foreign Exchange under Current Account
Article 6
With the exception of the scope and amount set out in Articles 7, 8 and 10 of these Regulations, the following kinds of foreign exchange earned by domestic organizations must be settled:
1. Foreign exchange earned from export or pay-first-receive-later entrepot goods or other trade activities. In the case of export trade to be settled by means of documentary letter of credit/letter of guarantee and documentary collection, foreign exchange thus earned may be settled on the strength of valid commercial documents, and in the case of export trade to be settled by means of remittance, foreign exchange thus earned may be settled on the strength of the instrument for the collecting, verifying and writing-off of export proceeds in foreign exchange;
2. Foreign exchange earned from contracts won in international bidding under the heading of overseas loans;
3. Foreign exchange earned from dealing in duty free goods under Customs control within the territory;
4. Foreign exchange earned from providing goods or services in such sectors as transport (including all modes of transport), ports (including airports), post and telecommunications (not including international exchange), advertising, consultancy, exhibitions, consignment sales, repair and maintenance as well as all agency services;
5. All kinds of fees, fines and confiscations in foreign exchange collected by administrative or judicial organs;
6. Foreign exchange received from the transfer of such intangible assets as the land-use right, copyright, trademark, patent, non-patented technologies and commercial goodwill, with the exception of the foreign exchange earnings received by individuals from the transfer of their privately-owned intangible assets;
7. Foreign exchange as profits remitted into the territory by enterprises which invest abroad, as repayment received from foreign economic aid programs, or earned from overseas assets;
8. Foreign exchange received from abroad as compensation of claims, and security money in foreign exchange refunded, etc.;
9. Foreign exchange received from lease of real estate and other foreign exchange assets;
10. Foreign exchange earned by insurance agencies in providing foreign exchange insurance;
11. Net income from foreign exchange operations of financial institutions which obtain the Foreign Exchange Business License;
12. Foreign exchange received from foreign donations, financial assistance and aid; and
13. Other foreign exchanges which shall be settled as required by the State Administration of Exchange Control.
Article 7
With regard to the following kinds of foreign exchange, domestic organizations (not including enterprises with foreign investment) may apply to the State Administration of Exchange Control or its branch offices (hereinafter referred to as "the foreign exchange office") to open foreign exchange accounts with the banks which carry on the foreign exchange business, and shall proceed with foreign exchange settlement according to the regulations:
1. Foreign exchange in business transactions received by companies, which undertake overseas contracted projects or provide labor service, technical co-operation or any other services abroad, in the course of carrying out the aforesaid operations;
2. Foreign exchange received or paid on commission by organizations engaging in foreign or overseas agency services;
3. Foreign exchange under the heading of temporary receipt for payment or temporary receipt for settlement, including bid bond and performance bond remitted in from overseas, foreign exchange received from entrepot trade under the category of receive-first-pay-later, foreign exchange for handling international exchange by the post and telecommunications departments, advance payment in foreign exchange received by Class A travel agencies from overseas tourism organizations, foreign exchange received by railways departments providing insured overseas transportation, foreign exchange in terms of security and pledge received by the Customs, etc.; and
4. Insurance premiums of insurance agencies providing foreign exchange insurance which needs to be reinsured overseas and that are not yet settled.
Net income from the above-listed foreign exchange shall be sold in full to the authorized bank of foreign exchange within the prescribed time limit.
Article 8
Foreign exchange which, as stipulated in the agreements of donation, financial assistance or aid, is to be used for overseas payment, may be retained only after approval of the foreign exchange office.
Article 9
Foreign exchange falling within the following categories may be retained:
1. Foreign exchange of foreign embassies and consulates in China, and resident offices in China of international organizations and other overseas legal persons; and
2. Foreign exchange owned by residents in China and foreigners coming to China.
Article 10
An enterprise with foreign investment may retain its earnings in foreign exchange under current account within the limit prescribed by the foreign exchange office and must sell the excess portion to the authorized bank of foreign exchange or in the foreign exchange swap centers.
Article 11
A person who proceeds to an authorized bank of foreign exchange to settle an amount of cash in excess of an equivalent of 10,000 US dollars shall produce his genuine identification certificate and an evidence of the source of the foreign exchange to be settled, and in that case the authorized bank of foreign exchange shall, after the settlement and registration, submit the matter to the State Administration of Exchange Control for the record.
Article 12
Domestic organizations and residents, foreign organizations stationed in China and foreigners coming to China, which and who are permitted to open foreign exchange accounts as laid down by Articles 7, 8, 9 and 10 of these Regulations, shall proceed to the banks which carry on the foreign exchange business to complete the procedures for opening foreign exchange accounts in accordance with the relevant regulations on the management of foreign exchange accounts.
Article 13
With regard to foreign exchange needed for making external payment in the following trade and non-trade operations, domestic organizations shall, on the strength of valid commercial documents compatible to the mode of payment as well as valid evidences required, make such payment from their foreign exchange accounts or purchase foreign exchange from the authorized banks of foreign exchange:
1. For import trade to be settled by means of documentary letter of credit/letter of guarantee, if purchase of foreign exchange is needed at the time of opening the letter, the import contract, the instrument for the paying, verifying and writing-off of import payment in foreign exchange and the written application for the letter shall be required; and if purchase of foreign exchange is needed at the time of making payment, valid commercial documents compatible to the settlement mode of letter of credit shall be required in addition to the foregoing requirements. At the time of verifying and writing-off, the original customs declaration form for imported goods must be required;
2. For import trade to be settled by means of documentary collection, the import contract, the instrument for the paying, verifying and writing-off of import payment in foreign exchange, the notification for payment of foreign exchange for import and valid commercial documents compatible to the settlement mode of documentary collection shall be required. At the time of verifying and writing-off, the original customs declaration form for imported goods must be required;
3. For import trade to be settled by means of remittance, the import contract, the instrument for the paying, verifying and writing-off of import payment in foreign exchange for import, invoices, the original customs declaration form for imported goods and the original transport document shall be required, and if the "consignee" stated in the bill of lading or the "operating unit" stated in the customs declaration form is different from the name of the buyer specified in the import contract, the agency agreement between the two parties shall also be required.
4. For advance payment under the heading of import, which is at an amount not exceeding 15 per cent of the value of the import contract or at an amount exceeding 15 per cent but not exceeding an equivalent of 100,000 US dollars, the import contract and the instrument for the paying, verifying and writing-off of import payment in foreign exchange shall be required.
In addition, if the imported goods under the Items 1 to 4 above are subject to import quota control or import control of special products, the license or import document signed and issued by relevant departments shall also be required; and if the goods for which the automatic registration system is adopted is imported, the corresponding registration documents shall also be required;
5. For the transportation and insurance premiums under the heading of import, the import contract, original invoices of transportation and original invoices of insurance premiums shall be required.
6. For foreign exchange needed to pay for commissions under the heading of export (including the unstated commission at an amount not exceeding 2 per cent of the value of the contract, the stated commission at an amount not exceeding 5 per cent of the value of the contract, and any commission at an amount exceeding the foregoing proportions but not exceeding 10,000 US dollars), the export contract or brokerage agreement, and settlement memo or notification for collection shall be required; for transportation and insurance premiums under the heading of export, the export contract, original invoices of transportation and original invoices of insurance premiums shall be required.
7. For balances under the heading of import, the import contract, the instrument for the paying, verifying and writing-off of import payment in foreign exchange and the certificate of acceptance inspection of the goods shall be required.
8. For such related fees as materials fees, technical fees and information fees under the heading of import or export, the import or export contract, the instrument for the paying, verifying and writing-off of import payment in foreign exchange or the instrument for the collecting, verifying and writing-off of export proceeds in foreign exchange, invoices or charge bills as well as the letter of explanation signed by the person in charge of the importing or exporting unit shall be required.
9. For foreign exchange needed in purchasing commodities from bonded zones or overseas exhibits being exhibited in China, the valid evidences and commercial documents set out in Items 1 to 8 shall be required.
10. For import of such intangible assets as patents, copyrights, trademarks and computer software, the import contract or agreement shall be required.
11. For compensation in foreign exchange under the heading of export, the settlement memo or notification for collection, claim agreement, claim payment evidence or evidence on cancellation of refunds from foreign exchange collected for exported goods shall be required.
12. For bidding bond needed for overseas contract projects, bidding documents shall be required; for performance bond and advance funding for the projects, the contracts shall be required.
Article 14
With regard to the following external payments to be made by domestic organizations for trade and non-trade operations, the banks which carry on the foreign exchange business shall, in accordance with the list of payment provided by the customers, make such payment from the customers' foreign exchange accounts or exchange therefor, and shall carry out ex post facto verification:
1. Payment for duty free goods imported by the duty-free goods companies approved by the State Council within their scope of business;
2. Payment for international multi-modal transport by civil aviation, ocean shipping and railway departments (organizations), costs for equipment maintenance, costs for ports utilization, fuel supply costs, insurance premiums, lease costs of non-financing nature as well as other service charges incurred abroad;
3. Allowances for food and subsidies provided by civil aviation, ocean shipping and railway departments (organizations) to their personnel operating abroad; and
4. Expenses incurred by the post and telecommunications departments from international post and telecommunications businesses.
Article 15
With regard to the following external payment, the domestic organizations shall, after the examination on the truth of the payment by and approval of the foreign exchange office, make such payment from their foreign exchange accounts or purchase the needed foreign exchange from the authorized banks of foreign exchange:
1. Advance payment for goods in excess of the proportion or amount laid down in Article 13 (4) of these Regulations;
2. Payment for commissions in excess of the proportion or amount laid down in Article 13 (6) of these Regulations;
3. External payment under the heading of pay-first-receive-later entrepot trade;
4. Repayment of interests on foreign debts; and
5. Withdrawal of an amount of cash in excess of an equivalent of 10,000 US dollars.
Article 16
A domestic organization which desires to repay the interests on a loan in foreign exchange to a domestic financial institution with Chinese investment shall, on the strength of the Registration Certificate on Foreign Exchange (onlending) Loans, the loan contract and the advice for interest repayment of the loaner, make such payment from its foreign exchange account or purchase the needed foreign exchange from an authorized bank of foreign exchange.
Article 17
Foreign exchange needed for non-trade and non-operation activities by the budgeted organs, institutions and social organizations shall be governed by the Provisional Regulations on Financial Management of the Non-trade and Non-operation Foreign Exchange.
Article 18
With regard to the following foreign exchange needed for the non-operation activities, the non-budgeted domestic organizations shall, on the strength of the required valid evidences, make payment from their foreign exchange accounts or purchase the needed foreign exchange from the authorized banks of foreign exchange:
1. For foreign exchange needed for organizing overseas exhibitions, trade promotions, training or shooting movie and television programs, the contract, the advice of payment issued by the overseas organization and the document of approval issued by the competent department concerned shall be required;
2. For fees and expenses in foreign exchange for publicity abroad, foreign aid, donations, membership dues to international organizations, registration with and entry into international conferences, the document of approval issued by the competent department concerned and the relevant letters shall be required;
3. For establishment expenses for representative offices or detached offices abroad and annual budgeted expenditures, the document of approval issued by the competent department concerned for the establishment of the office and the statement of budgeted expenditure shall be required;
4. For examination fees paid to overseas by the Foreign Examination Co-ordination Center of the State Education Commission, the foreign contract and bills/advises of settlement issued by the overseas examination institution shall be required;
5. For fees and expenses in foreign exchange needed for registering abroad of trademarks and copyrights, applying abroad for patent and receiving overseas legal and consultancy services, the contract and invoices shall be required; and
6. For expenses in foreign exchange needed for overseas business travel, the document of approval issued by the department authorized by the State shall be required.
As for foreign exchange needed for the non-operation activities other than those under the Items 1 to 6 above, the domestic organizations shall, after examination on the truth of the activities by and approval of the foreign exchange office, make payment from their foreign exchange accounts or purchase needed foreign exchange from the authorized banks of foreign exchange.
Article 19
Foreign exchange needed by residents for private expenses shall be governed by the Measures on the Management of Foreign Exchange Purchase by Residents in the Territory and the Rules on the Management of Remittance Abroad of Foreign Exchange Deposits by Residents in the Territory.
Article 20
Individuals who go abroad for permanent residence may have their following lawful earnings in Renminbi exchanged into foreign money at the authorized banks of foreign exchange designated by the foreign exchange office on the strength of their identification certificate and other required valid evidences:
1. For the interest of their deposits in Renminbi, the list of interests shall be required;
2. For rents from house property leasing, the contract of house property leasing and the evidence issued by the administrative department of house property leasing shall be required;
3. For earnings from other assets, related evidences and the list of the earnings shall be required.
Article 21
After paying taxes according to law, the foreign investor in the enterprise with foreign investment who desires to remit his profits and dividend out of China shall, on the strength of the resolution of the board of directors on profits distribution, make such payment from his foreign exchange account or purchase the foreign exchange from the authorized bank of foreign exchange.
After paying taxes according to law, foreigners, overseas Chinese, and people from Hong Kong, Macao and Taiwan employed by enterprises with foreign investment may, upon presenting relevant evidences, convert the wages and salaries and other lawful income they have received in Renminbi into foreign money at the authorized banks of foreign exchange.
Article 22
After paying taxes according to law, an enterprise which should pay share dividends in foreign money according to regulations, shall make payment from its foreign exchange account or purchase needed foreign exchange from the authorized bank of foreign exchange on the strength of the resolution of its board of directors on profits distribution.
Article 23
Foreign organizations stationed in China and foreigners coming to China, which and who intend to remit out of China their lawful incomes in Renminbi shall, on the strength of the evidences and the list of the incomes, proceed to the authorized bank of foreign exchange to change the incomes into foreign money.
Article 24
Foreign organizations stationed in China and foreigners coming to China, which and who intend to remit out of China the proceeds from selling their self-use articles, equipment and apparatus, which they brought in from overseas or purchased in China, shall go to the authorized banks of foreign exchange designated by the foreign exchange office to change the proceeds into foreign money by presenting the registration certificate of industry and commerce/their identification certificates and the evidences of the selling.
Article 25
Foreigners, overseas Chinese, compatriots from Hong Kong, Macao and Taiwan, who temporarily come to China, may, on the strength of their own passports and original exchange memo (valid for 6 months), change their amount in Renminbi not yet used into foreign money and bring them out of China.
Chapter III Settlement, Sale and Payment of Foreign Exchange under Capital Account
Article 26
Every domestic organization must, for its foreign exchange under capital account, open a foreign exchange account at a bank which carries on the foreign exchange business.
Article 27
Without approval of the foreign exchange office, the following foreign exchange of domestic organizations may not be settled:
1. foreign exchange as investment remitted in by overseas legal or natural persons;
2. foreign exchange obtained by borrowing from overseas or by issuing bonds or stocks in foreign currency; and
3. other foreign exchange earnings under capital account approved by the State Administration of Exchange Control.
With the exception of deposit in foreign exchange in export trade, international commercial loans borrowed by enterprises with Chinese investment in domestic loans in foreign exchange may not be settled.
Article 28
Foreign exchange received by domestic organizations from selling real estate and other assets to overseas must, with the exception of the amount set out in Article 10 of these Regulations, be sold to the authorized banks of foreign exchange.
Article 29
A domestic organization which desires to repay the principal amount of a loan in foreign exchange to a domestic financial institution with Chinese investment shall, on the strength of the Registration Certificate of Foreign Exchange (onlending) Loans, the loan contract and the advice of repayment of principal issued by the loaner, make payment from its foreign exchange account or purchase needed foreign exchange from the authorized bank of foreign exchange.
Article 30
With regard to the following foreign exchange under capital account, the domestic organizations shall, upon application to the foreign exchange office by presenting the required valid evidences and on the strength of the document of approval issued by the foreign exchange office, make payment from their foreign exchange accounts or purchase the needed foreign exchange from the authorized banks of foreign exchange:
1. For repayment of the principal of foreign debts, the Foreign Debts Registration Certificate, the loan contract and the advice of repayment of principal issued by the loaner shall be required;
2. For payment of external performance in foreign exchange, the relevant guarantee agreement, the Registration Certificate of Foreign Exchange Guarantee issued by the foreign exchange office and the advice of payment issued by the overseas organization shall be required;
3. For outward remittance of investment fund, the document of approval issued by the competent department of the State and the investment contract shall be required; and
4. For contribution as registered capital permitted to be effected in foreign exchange to the enterprises with foreign investment by the Chinese investors, the document of approval issued by the competent department of the State and the contract shall be required.
Article 31
As for the increase, transfer or disposal in other ways of the capital amount in foreign exchange, the enterprises with foreign investment shall make payment from their foreign exchange accounts by presenting the resolution of the board of directors and after approval of the foreign exchange office, or purchase the needed foreign exchange from the authorized bank of foreign exchange by presenting the sales note of foreign exchange issued by the foreign exchange office.
As for the investment in the territory by the investment enterprises with foreign investment using their equity capital in foreign exchange, and increase of their share of the enterprises' equity capital or re-investment by the foreign investors of the enterprises with their profit incomes, the documents of approval issued by the foreign exchange office shall be required.
Chapter IV Supervision and Control of Foreign Exchange Settlement, Sale and Payment
Article 32
Enterprises with foreign investment may complete their settlement and sales of foreign exchange at the authorized banks of foreign exchange or also may complete their purchase and sales of foreign exchange at the foreign exchange swap centers, and other domestic organizations and residents, foreign organizations stationed in China and foreigners coming to China may only complete their settlement and sales of foreign exchange at the authorized banks of foreign exchange.
Article 33
When an external payment is to be effected from a foreign exchange account, the bank which carries on the foreign exchange business shall, pursuant to the prescribed scope of receipt and payment of the foreign exchange account and the relevant provisions of Chapters II and III of these Regulations, carry out examination on the payment and make such payment.
Article 34
An authorized bank of foreign exchange shall, after completing a foreign exchange sale or payment, sign its name and stamp on the corresponding valid evidences and commercial documents for the future reference.
Article 35
The authorized banks of foreign exchange shall, in accordance with the daily middle price of the exchange rates of Renminbi quoted by the People's Bank of China and the authorized margin of fluctuation, determine their purchase and sale prices for foreign exchanges against their customers, and handle the business in foreign exchange settlement and sales.
Article 36
All payment from foreign exchange accounts or purchase of foreign exchange to make payment shall be effected on the date stipulated by relevant settlement mode or by the contract, and no external payment may be effected in advance; no foreign exchange, with the exception of those needed for repayment of the principal and interest and security for letter of credit/letter of guarantee, may be purchased in advance.
Article 37
For the purpose of avoiding exchange rate risks for units with future payment obligations under pertinent contracts or loans service agreement, the authorized banks of foreign exchange may, pursuant to relevant regulations, effect for them Renminbi-foreign currency forward transactions and other means of hedging.
Article 38
In the case of import under the heading of barter trade, no purchase of foreign exchange or no payment from a foreign exchange account may be permitted without approval of the foreign exchange office.
Article 39
Banks which carry on the foreign exchange business shall, according to relevant regulations, submit statements to the foreign exchange offices on their operation of foreign exchange settlement, sales and payment.
An authorized bank of foreign exchange shall establish an internal supervisory system on foreign exchange settlement and sales, and shall timely report to the local office of the State Administration of Exchange Control of the irregularity in its operation, if any.
Article 40
A domestic organization shall, in the place of its registration, choose a bank which carries on the foreign exchange business to open its foreign exchange account and to complete its settlement, sales and payment of foreign exchange pursuant to these Regulations. If a domestic organization desires to open a foreign exchange account in a place other than its registration or in a place outside China, it shall first apply to the foreign exchange office for approval.
Upon approval, an enterprise with foreign investment may, in the place of its registration, choose a bank which carries on the foreign exchange business to open a foreign exchange settlement account for its foreign exchange earnings under current account.
Article 41
All banks which carry on the foreign exchange business and domestic organizations involved in foreign exchange settlement, sales and payment shall unconditionally be subject to supervision and inspection by the foreign exchange offices, and shall present and provide relevant materials thereto. If any one violates these Regulations, the foreign exchange office may impose thereon such penalties as a warning, confiscation of illegal gains, or fine. If a bank which carries on the foreign exchange business violates these Regulations and the violation is considered of a serious nature, the foreign exchange office may impose a temporary suspension on its operation in foreign exchange settlement and sales thereon.
Chapter V Supplementary Provisions
Article 42
The State Administration of Exchange Control is responsible for the interpretation of these Regulations.
Article 43 These Regulations shall enter into force on July 1, 1996. The Provisional Regulations on the Control of Foreign Exchange Settlement, Sale and Payment promulgated on March 26, 1994 shall be repealed on the same date. If any other provisions contradict with these Regulations, the latter shall prevail.
