1970-01-01 08:33:28
Decree of the State Council of the People¡¯s Republic of China
No. 532
The Foreign Exchange Control Regulations of the People¡¯s Republic of China, which has been amended and passed in the 20th executive meeting of the State Council on Aug.1, 2008, is hereby promulgated and shall be enter into force as of the date of promulgation.
Premier Wen Jiabao
Aug. 5, 2008
Foreign Exchange Control Regulations of the People¡¯s
Republic of China (Amended in 2008)
(Promulgated as the No.193 order of the State Council of the People¡¯s Republic of China on Jan.29, 1996, amended according to the Decision of the State Council on Amending the Foreign Exchange Control Regulations of the People¡¯s Republic of China on Jan.14, 1997, and re-amended and passed in the 20th executive meeting of the State Council on Aug.1, 2008)
Chapter 1 General Provisions
Article 1 The Regulations are formulated with a view to enhancing foreign exchange control, promoting the balance of international payments, and advancing the sound development of the national economy.
Article 2 The administration of foreign exchange under the State Council as well as its branches (hereafter referred to as foreign exchange control agencies) shall fulfill their responsibilities on foreign exchange control and be responsible for the implementation of the provisions hereof according to law.
Article 3 Foreign exchange hereof refers to the following instruments of payment and assets expressed in foreign currencies that can be used for international liquidation:
(1) Foreign currencies including paper currency and coins;
(2) Payment documents or instruments denominated in foreign currency including bills, bank deposit certificates and bank cards, etc.;
(3) Securities denominated in foreign currency including bonds and stocks etc.;
(4) Special withdrawing rights; and
(5) Other assets denominated in foreign currency.
Article 4 Provisions hereof are applicable to all activities related to the foreign exchange receipts and disbursements and transactions of domestic organs and individuals and to the said activities of overseas organs and individuals within the territory of People¡¯s Republic of China.
Article 5 Regular international payments and transfers are not restricted by the state.
Article 6 The state has adopted the declaration system for the statistics of balance of international payments.
The administration of foreign exchange under the State Council shall conduct the statistics and monitoring of international payments and promulgate the status of balance of international payments regularly.
Article 7 Financial institutions engaged in foreign exchange business shall open a foreign exchange account for a client and handle foreign exchange businesses through the foreign exchange account according to provisions of the administration of foreign exchange under the State Council.
Financial institutions engaged in foreign exchange business shall report to the foreign exchange control agencies about the foreign exchange receipts and disbursements of their clients as well as changes of said accounts according to law.
Article 8 The circulation of foreign currency is prohibited and foreign currency shall not be quoted for settlement in the territory of the People¡¯s Republic of China, except as otherwise provided by the state.
Article 9 The foreign exchange incomes of domestic organs and individuals may be transferred to China or deposited in overseas countries. The conditions and terms for transferring to China or depositing in overseas countries shall be provided by the administration of foreign exchange under the State Council according to balance of international payments and the needs for foreign exchange control.
Article 10 The administration of foreign exchange under the State Council shall hold, regulate and operate the foreign exchange reserves of the state according to law, and follow the principles of safety, circulation and increment.
Article 11 Where the balance of international payments has or may have a serious disequilibrium, or the national economy faces or may face a serious risk, the state may take necessary measures to maintain and control the balance of international payments.
Chapter 2 Foreign Exchange Control over Current Accounts
Article 12 The foreign exchange receipts and payments under current accounts shall be based on accurate and legitimate transactions. Financial institutions engaged in the settlement and sale of foreign exchange shall conduct proper inspection of the accuracy of dealing documents and its conformity with the foreign exchange receipts and payments according to the provisions of the administration of foreign exchange under the State Council.
Foreign exchange control agencies are entitled to regulate and inspect aforesaid issues.
Article 13 The foreign exchange incomes under current accounts may be retained or sold to financial institutions engaged in the settlement and sale of foreign exchange in accordance with relevant provisions.
Article 14 The foreign exchange disbursements under current accounts shall be, against valid documents, paid with self-owned foreign exchange or foreign exchange brought from financial institutions engaged in the settlement and sale of foreign exchange in accordance with provisions on the administration of the sale and purchase of foreign exchange by the administration of foreign exchange under the State Council.
Article 15 The quota for carrying and declaring foreign currencies in and out of China shall be subject to the provisions of the administration of foreign exchange under the State Council.
Chapter 3 Foreign Exchange Control over Capital Accounts
Article 16 Overseas organs and individuals that directly invest in China shall go through registration formalities at foreign exchange control agencies after have been approved by relevant competent departments.
Overseas organs and individuals that conduct the issuance and transaction of securities or derivatives shall observe provisions concerning market access of the state, and go through registration formalities according to provisions of the administration of foreign exchange under the State Council.
Article 17 Domestic organs and individuals that engaged in overseas direct investment or the issuance and transaction of securities and derivatives abroad shall go through registration formalities in accordance with provisions of the administration of foreign exchange under the State Council. With respect to those that the approval or filing of relevant competent departments are required by the state, approval or filing formalities shall be gone through prior to the foreign exchange registration.
Article 18 The state carries out the scale administration of foreign loans. Entities or individuals that borrow foreign loans shall observe relevant provisions of the state and go through registration formalities at foreign exchange control agencies.
The administration of foreign exchange under the State Council shall be responsible for the statistics and monitoring of foreign loans across the country and promulgate status of foreign loans regularly.
Article 19 Entities or individuals that offer external guarantees shall apply to foreign exchange control agencies and the latter shall make decisions on whether granting an approval or not according to the assets and liabilities of the applicants. Where the business scope is required to be approved by relevant competent departments by the state, applicants shall go through approval formalities before their applications to foreign exchange control agencies.
The provisions in the above paragraph are not applicable to those that offer external guarantees, approved by the State Council, for onlending loans extended by foreign governments or international financial institutions.
Article 20 Financial institutions in banking industry may offer foreign direct commercial loans within the approved business scopes. Other domestic institutions that offer foreign commercial loans shall apply to foreign exchange control agencies, which shall make decisions on whether granting an approval or not according to the assets and liabilities of the applicants. Where the business scope is required to be approved by relevant competent departments by the state, applicants shall go through approval formalities before their applications to foreign exchange control agencies.
Those that offer foreign commercial loans shall go through registration formalities according to provisions of the administration of foreign exchange under the State Council.
Article 21 Where the foreign exchange incomes under capital accounts are to be retained or sold to financial institutions engaged in the settlement and sale of foreign exchange, approvals of foreign exchange control agencies are required, except as otherwise by the state.
Article 22 The foreign exchange disbursements under capital accounts shall be, against valid documents, paid with self-owned foreign exchange or foreign exchange brought from financial institutions engaged in the settlement and sale of foreign exchange in accordance with provisions on the administration of the sale and purchase of foreign exchange by the administration of foreign exchange under the State Council. With respect to those that are required to be approved by foreign exchange control agencies by the state, approval formalities shall be gone through before foreign exchange disbursements.
The currency denominated in Renminbi that belongs to foreign parties in a foreign-invested enterprise that terminated according to law may, after the liquidation and taxation of the enterprise in accordance with relevant provisions of the state, be used to buy foreign exchange from financial institutions engaged in the settlement and sale of foreign exchange and remitted abroad.
Article 23 The foreign exchange under capital accounts and the foreign exchange settlement funds shall be used according to the purposes approved by relevant competent departments and foreign exchange control agencies. Foreign exchange control agencies are entitled to monitor and inspect the use of the foreign exchange under capital accounts and foreign exchange settlements funds as well as the changes of accounts.
Chapter 4 Administration of the Foreign Exchange Business of Financial Institutions
Article 24 Where financial institutions operate or terminate the business of foreign exchange settlement and sale, they shall be approved by foreign exchange control agencies. Where financial institutions operate or terminate other foreign exchange businesses, they shall be approved by foreign exchange control agencies or financial regulatory organs according to their functions.
Article 25 Foreign exchange agencies implement the general position administration on the foreign exchange business of financial institutions. The specific measures shall be formulated by the administration of foreign exchange under the State Council.
Article 26 Where financial institutions need conversions between Renminbi and foreign currencies for their principals and profits or due to mismatch of home currency assets and foreign currency assets, they shall be approved by foreign exchange control agencies.
Chapter 5 Administration of Renminbi Exchange Rate and Foreign Exchange Market
Article 27 The managed floating exchange rate system based on market supply and demand is adopted for Renminbi exchange rate.
Article 28 Financial institutions engaged in foreign exchange settlement and sale businesses and other organs that meet requirements of the administration of foreign exchange under the State Council may conduct foreign exchange transactions in the interbank foreign exchange market in accordance with provisions of the administration of foreign exchange under the State Council.
Article 29 Transactions in foreign exchange market shall follow the principles of openness, fairness, impartiality and honesty.
Article 30 The currencies and transaction forms in the foreign exchange market shall subject to provisions of the administration of foreign exchange under the State Council.
Article 31 The administration of foreign exchange under the State Council shall supervise and administrate foreign exchange markets across the country according to law.
Article 32 The administration of foreign exchange under the State Council may regulate the foreign exchange market according to the changes of foreign exchange market and the requires of monetary policies.
Chapter 6 Supervision and Administration
Article 33 Foreign exchange control agencies shall fulfill their responsibilities according to law and are entitled to take measures as follows:
(1) Conducting onsite inspections over financial institutions engaged in foreign exchange businesses;
(2) Entering places where there are suspected illegal acts regarding foreign exchange for inspection and collection of evidences;
(3) Inquiring organs and individuals involved in activities including foreign exchange receipt and payment or foreign exchange transaction and requiring them to make explanations of items directly related to illegal issues regarding foreign exchange under inspection;
(4) Consulting and Copying materials including transaction documents that are directly related to illegal issues regarding foreign exchange;
(5) Consulting and copying financial accounting materials and relevant documents of parties concerned in and of entities and individuals directly related to illegal issues regarding foreign exchange under inspection; sealing up documents and materials that may be transferred, hidden or damaged for keeping;
(6) Inquiring accounts of parties concerned in and of entities and individuals directly related to illegal issues regarding foreign exchange under inspection with approvals of the person-in-charge of the administration of foreign exchange under the State Council or foreign exchange control agencies at provincial level, except personal deposit accounts;
(7) Applying the people¡¯s courts to freeze or sequester involved assets including illegal funds which, according to evidences, have been or may be transferred or hidden, and main evidences, according to evidences, may be hidden, counterfeited or damaged.
Entities and individuals involved shall support the supervision and inspection of foreign exchange control agencies, tell the truth and provide relevant documents and materials. They shall not refuse or hinder supervisions and inspections by aforesaid agencies or disguise facts.
Article 34 Foreign exchange control agencies make supervision or inspection according to law. Persons carrying out supervision or inspection shall not be less than two and shall present their identification cards. Entities and individuals are entitle to refuse supervisions and inspections if the persons carrying out supervision or inspection are less than two or do not present their identification cards.
Article 35 Domestic organs engaged in foreign exchange businesses shall submit their materials including financial accounting reports and numerical statements in accordance with provisions of the administration of foreign exchange under the State Council.
Article 36 Financial institutions engaged in foreign exchange businesses shall report to foreign exchange control agencies in a timely manner when they find any illegal acts regarding foreign exchange committed by their clients.
Article 37 The administration of foreign exchange under the State Council may acquire necessary information from relevant departments and organs under the State Council for the purpose of fulfilling its responsibility of foreign exchange control, and relevant departments and agencies under the State Council shall give supports.
The administration of foreign exchange under the State Council shall notify the relevant departments and organs under the State Council about the administration of foreign exchange.
Article 38 Any entity or individual is entitled to report illegal acts regarding foreign exchange.
Foreign exchange control agencies shall keep secrets for informers and reward informers or entities and individuals that make contributions to the inspection over illegal acts regarding foreign exchange.
Chapter 7 Legal Responsibilities
Article 39 Where any entity or individual has any acts involving the evasion of foreign exchange including transfer of domestic foreign exchange abroad, or transfer of domestic funds abroad in a deceitful manner in violation of provisions, foreign exchange control agencies shall order it/him to repatriate the foreign exchange within a time limit and impose a fine of less than 30% of the evaded foreign exchange; under any serious circumstances, a fine of more than 30% up to the same amount of the evaded foreign exchange shall be imposed. Where any crime is constituted, criminal responsibilities shall be investigated according to law.
Article 40 Where any entity or individual has any illegal acts of arbitrage of exchange including receiving funds receivable in Renminbi in foreign currencies, or buying foreign exchange from financial institutions engaged in foreign settlement and sale businesses against false or invalid transaction documents in violation of provisions, foreign exchange control agencies shall order it/him to re-exchange the illegally exchanged funds and impose a fine of less than 30% of the illegally exchanged funds; under any serious circumstances, a fine of more than 30% up to the same amount of the illegally exchanged funds shall be imposed. Where any crime is constituted, criminal responsibilities shall be investigated according to law.
Article 41 Where any entity or individual sends foreign exchange into the territory of China in violation of provisions, foreign exchange control agencies shall order it/him to make corrections and impose a fine of less than 30% of the illegal funds; under any serious circumstances, a fine of more than 30% up to the same amount of the illegal funds shall be imposed.
Where any entity or individual conduct any illegal settlement of foreign exchange, foreign exchange control agencies shall order it/him to re-exchange the illegally settled funds and impose a fine of less than 30% of the illegal funds.
Article 42 Where any entity or individual carries out foreign exchange in and out of the territory of China in violation of provisions, foreign exchange control agencies shall give a warning and may impose a fine of less than 20% of the illegal funds. Where provisions of laws and regulations provide that the penalty shall be given by customs, said provisions shall prevail.
Article 43 Where any entity or individual has acts including borrowing of foreign loans, issuance of bonds or providence of external guarantees without approval in violation of provisions on foreign loan control, foreign exchange control agencies shall give a warning and impose a fine of less than 30% of the illegal funds.
Article 44 Where any entity or individual violates provisions to change the purposes of foreign exchange or foreign exchange settlement funds without approval, foreign exchange agencies shall order it/him to make corrections, confiscate illegal proceeds and impose a fine of less than 30% of the illegal funds. Under any serious circumstances, a fine of more than 30% up to the same amount of the illegal funds shall be imposed.
Where any entity or individual has any acts of illegal use of foreign exchange including use of a foreign currency for valuation and settlement or transfer of foreign exchange in the territory of China in violation of provisions, foreign exchange control agencies shall order it/him to make corrections and give a warning, and may impose a fine of less than 30% of the illegal funds.
Article 45 Where any entity or individual makes unapproved, disguised or speculative transactions of foreign exchange, or illegally introduces others to make foreign exchange transactions where the amount of foreign exchange is large, foreign exchange control agencies shall give a warning, confiscate illegal proceeds and impose a fine of less than 30% of the illegal funds. Under any serious circumstances, a fine of more than 30% up to the same amount of the illegal funds shall be imposed. Where any crime is constituted, criminal responsibilities shall be investigated.
Article 46 Where any entity or individual engages in the settlement and sale businesses of foreign exchange without approval, foreign exchange control agencies shall order it/him to make corrections and confiscate illegal proceeds, if any. Where the illegal proceeds are over RMB500,000, a fine of 1-5 times of the illegal proceeds shall be imposed; where there is no illegal proceeds or the illegal proceeds are less than RMB500,000, a fine of RMB500,000 up to RMB2m shall be imposed; under any serious circumstances, relevant competent departments shall order it/him to stop the business for internal rectification or revoke its/his business license. Where any crime is constituted, criminal responsibilities shall be investigated.
Where any entity or individual engages in other foreign exchange businesses other than the settlement and sale of foreign exchange without approval, foreign exchange control agencies or financial regulatory organs shall punish it/him in accordance with provisions provided for in the previous paragraph.
Article 47 Where any financial institution is in any of the following circumstances, foreign exchange control agencies shall order it to make corrections within a time limit, confiscate its illegal proceeds and impose a fine of RMB200,000 up to RMB1m; where it is under any serious circumstances or does not make any correction within the time limit, foreign exchange control agencies shall order it to stop operating relevant businesses;
(1) Failing to conduct a proper inspection over the accuracy of transaction documents and the conformity of the receipt and payment of foreign exchange when handling receipt and payment businesses under current accounts;
(2) Handling receipt and payment businesses under capital accounts in violation of provisions;
(3) Handling foreign exchange settlement and sale businesses in violation of provisions;
(4) Violating the general position administration on the foreign exchange businesses; or
(5) Violating the administration on transactions in foreign exchange market.
Article 48 Where any entity or individual is in any of the following circumstances, foreign exchange control agencies shall order it/him to make corrections and give a warning, and may impose a fine of less than RMB300,000 on the entity, or a fine of less than RMB50,000 on the individual:
(1) Failing to make statistics and declaration of its/his international receipts and payments in accordance with provisions;
(2) Failing to submit materials including financial accounting reports and numerical statements in accordance with provisions;
(3) Failing to submit valid documents in accordance with provisions or the submitted documents are inaccurate;
(4) Violating provisions on the administration of foreign exchange accounts;
(5) Violating provisions on the administration of foreign exchange registration; or
(6) Refusing or hindering foreign exchange control agencies to carry out legitimate supervisions or inspections.
Article 49 Where any domestic organs violates provisions on foreign exchange control, except punishments according to provisions hereof, the directly liable person-in-charge or other directly liable persons shall be punished; directors, supervisors, senior managers who bear direct responsibility for the financial institution and other directly liable persons shall be given a warning and imposed a fine of RMB50,000 up to RMB500,000. Where any crime is constituted, criminal responsibilities shall be investigated.
Article 50 Where any staff member of foreign exchange control agencies pursues private benefits at the public cost, abuses his power or neglects his duties, if any crime is constituted, criminal responsibilities shall be investigated according to law; otherwise, administrative sanctions shall be given according to law.
Article 51 Any party concerned may appeal for administrative reconsideration according to law if he does not accept the specific administrative sanctions made by foreign exchange control agencies. He may appeal to the people¡¯s court if he does not accept the decision of administrative reconsideration.
Chapter 8 Supplementary Provisions
Article 52 Definitions of the terms in the provisions hereof are as follows:
(1) Domestic organ refers to state organs, enterprises, institutions, social organizations and armies etc in the territory of the People¡¯s Republic of China, except foreign diplomatic and consular organs and representative agencies of international organizations in China.
(2) Domestic individual refers to Chinese citizens and foreigners staying in China for more than one year consecutively, except foreign diplomatic agents and representatives of international organizations in China.
(3) Current account refers to goods, services, incomes and regularly transferred transactions etc. involved in balance of international payments.
(4) Capital account refers to transactions involved in balance of international payments which may cause changes to foreign assets and loan level, including capital transfer, direct investment, security investment, derivatives and loans etc.
Article 53 Where a non-financial institution engages in business of the settlement and sale of foreign exchange, it shall be approved by the administration of foreign exchange under the State Council. Specific administrative measures shall be formulated by the administration of foreign exchange under the State Council separately.
Article 54 The Regulations shall enter into force as of the date of promulgation.
Editor (Compiler): Shanghai International lawyers