The State Administration of Foreign Exchange
Circular of the State Administration of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination
and Approval of Foreign Exchange Administration of Some Capital Projects
HuiFa [2003] No.50
April 3, 2003
Branches and foreign exchange administration departments under the State Administration of Foreign Exchange in provinces, autonomous
regions and municipalities directly under the Central Government, and branch administrations of Shenzhen, Dalian, Qingdao, Xiamen,
Ningbo:
Decisions of the State Council on Canceling the First Batch of Administration Examination and Approval Projects (GuoFa [2002] No.24)
and the Decisions of the State Council on Canceling the Second Batch of Administration Examination and Approval Projects and Altering
the Administrative Methods for Some Administration Examination and Approval Projects (GuoFa [2003] No.5) have been promulgated. In
order to ensure the smooth linking of the administration of capital projects and avoid disjoint after cancellation of relevant administration
examination and approval projects, relevant policy and measures for the transitional period are hereby made as follows:
I.
Cancellation of examinations and approvals on the financing conditions of long-and-medium-term foreign debts of domestic Chinese-capital
organizations, on the financial conditions of financing and leasing of domestic Chinese-capital organizations, on the time selection
and financing conditions for issuing debts abroad, and on the financial conditions for project financing.
After cancellation of relevant examinations and approvals, in borrowing medium-long term foreign debts, issuing medium-long term bonds
denominated in foreign exchange, conducting aircraft financial leasing and project financing, Chinese-capital organizations shall
no longer be required to go through examination and approval formalities with administration of foreign exchange on terms of relevant
financing as they shall only be obliged to handle procedures on registration of foreign debts on a case by case basis after conclusion
of borrowing contracts.
During the course of the Chinese-capital organizations going through formalities of registration of foreign debts for above items
and during the course of enterprises with foreign investment going through formalities of registration of foreign debts for project
financing, capital raising and aircraft financial leasing, the branches and sub-branches of administration of foreign exchange shall
handle the registration in accordance with following procedures:
(I)
All branches and sub-branches of the administrations of foreign exchange shall verify borrowing qualifications of borrowers according
to operational procedures on borrowing qualifications concerning medium-long term international commercial loans, project financing,
aircraft financial leasing, issuance of bonds denominated in foreign exchange(see Attachment 1, Attachment 2, Attachment 3, Attachment
4). Qualification verifications for aircraft financial leasing, project financing and issuance of bonds denominated in foreign exchange
shall be conducted according to corresponding operational procedures for borrowing qualifications while checks on other forms of
medium-long term overseas borrowing (except for those made by enterprises with foreign investment) shall be conducted according to
operational procedures for borrowing qualifications concerning medium-long term international commercial loans.
(II)
Where the borrower meets the above verification requirements on borrowing qualifications, the branches and sub-branches of administration
of foreign exchange shall handle procedures of registration of conclusion of foreign debt contracts and of payment withdrawal, establishment
of special foreign debt account and settlement of foreign exchange and repayment of principals and interests and shall not require
the debtor to present prior approval documents issued by administrations of foreign exchanges.
(III)
Where the borrower does not meet the verification requirements on borrowing qualifications or where registration procedures does not
conform with requirements or where relevant articles in overseas borrowing arrangements do not conform with prevailing provisions
on administration of foreign exchange (such as account arrangement, guarantee arrangement, value preserving clause, etc.), the borrower
shall obtain written approval from the State Administration of Foreign Exchange in advance. The branches and sub-branches of administrations
of foreign exchange shall not handle registration procedures for the borrower without the written approval from the State Administration
of Foreign Exchange.
(IV)
Debtors shall handle withdrawal of payment after they have obtained certificates of registration of foreign debt issued by administration
of foreign exchange.
(V)
The branches and sub-branches shall handle registration of foreign debts of medium-long term overseas borrowings by Chinese-capital
organizations within the following time limits from the date on which all materials required by administration of foreign exchange
are presented by enterprises: 1. The branches and sub-branches shall grant the registration within 10 working days if no report to
and approval from the State Administration of Foreign Exchange is required. 2. The branches and sub-branches shall grant the registration
within 30 working days if no report to and approval from The State Administration of Foreign Exchange is required (which shall include
10 working days for The State Administration of Foreign Exchange to handle procedures).
II.
Cancellation of examination and approval on large amount financing by overseas branches of domestic Chinese-capital financial institutions
After cancellation of examination and approval on large amount financing by overseas branches of domestic Chinese-capital financial
institutions, the institutions shall not be required to handle prior examination and approval procedures with administration of foreign
exchange provided that they shall report the financing to administration of foreign exchange for the record in advance, which means
where a overseas branch of a domestic Chinese-capital financial institution raises commercial loans in a sum of 50,000,000 United
States dollars (inclusive) equivalent in one time, it shall report to the State Administration of Foreign Exchange for the record
10 working days in advance by its head office.
III.
Cancellation of examination and approval on establishment, alteration and cancellation of B share’s margin account opened with domestic
foreign-capital banks by securities companies
After cancellation of the examination and approval, the ways of management of administration of foreign exchange on establishment,
alteration and cancellation of B share’s settlement account (now referred to as the “clients transaction settlement account”) by
securities companies shall be as follows:
(I)
A securities company authorized to conduct foreign exchange business shall open domestic investor’s B share’s settlement account and
foreign investor’s B share’s settlement account separately with banks at its locality by presenting valid License for Conducting
Foreign Exchange Business in Securities Transactions and evidencing documents granting authorizations to conduct relevant businesses
issued by the CSRC etc.
A business department of a securities company authorized to conduct foreign exchange business shall open domestic investor’s B share’s
settlement account and foreign investor’s B share’s settlement account with banks at its locality by presenting power of attorney
of its head office, duplicate of License for Conducting Foreign Exchange Business in Securities Transactions of the securities company,
duplicates of evidencing documents granting authorization to conduct relevant businesses issued by the CSRC etc.
(II)
Within 3 days of establishment, alteration or cancellation of domestic investors’ B share’s settlement account and foreign investors’
B share’s settlement account, the securities companies or their business departments shall report to administration of foreign exchange
for the record.
(III)
The scope of receipt of a domestic investor’s B share’s settlement account shall be the foreign exchange funds transferred from its
domestic foreign exchange non-cash savings account or cash savings account and foreign exchange proceeds from foreign exchange securities
transactions. Its scope of payment shall be the foreign exchange needed in its foreign exchange securities transactions and transfers
therefrom to foreign exchange cash accounts opened with domestic commercial banks. No payment shall be remitted abroad.
The scope of receipt of a foreign investor’s B share’s settlement account shall be foreign exchange funds remitted from aboard by
the foreign investor or transferred from its domestic foreign exchange non-cash savings account and foreign exchange proceeds from
its foreign exchange securities transactions. Its scope of payment shall be the foreign exchange needed in its foreign exchange securities
transactions, transfers therefrom to foreign exchange non-cash accounts opened with domestic commercial banks and foreign exchange
funds to be remitted abroad.
IV.
Cancellation of examination on foreign exchange risks in making investment abroad by domestic institutions
Administration of foreign exchange shall no longer conduct examination on foreign exchange risks in making investment abroad and shall
simultaneously simplify examination procedures on source of foreign exchange capital for making investment abroad. For detailed rules
of operation please refer to the Circular of the State Administration of Foreign Exchange on Simplifying the Examination of Foreign
Exchange Capital Source of Investment Abroad (HuiFa [2003] No.43)
All Branches of the administrations of foreign exchange shall promptly transmit this Circular to designated banks of foreign exchange
at their locality and shall handle relevant business strictly according to requirements of the Circular.
This is hereby the notification.
Attachments:
1. Examination on the Qualifications of Chinese-capital Organizations for Borrowing Medium-long Term International Commercial Loans
(omitted)
2. Examination on the Qualifications for Borrowing under Project Financing (omitted)
3. Examination on the Qualifications for Borrowing under Aircraft Financial Leasing (omitted)
4. Examination on the Qualifications for Borrowing under Issuing Bonds Overseas (omitted)
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