House of Representatives

MEASURES OF THE PEOPLE’S REPUBLIC OF CHINA FOR THE ADMINISTRATION OF THE EXPORT REGISTRATION OF SENSITIVE ITEMS AND TECHNOLOGIES

The Ministry of Foreign Trade and Economic Cooperation

Order of the Ministry of Foreign Trade and Economic Cooperation

No.35

The Measures of the People’s Republic of China for the Administration of the Export Registration of Sensitive Items and Technologies
have been formulated on the basis of the Regulation of the People’s Republic of China on Controlling the Export of Dual-purpose Nuclear
Products and Affiliated Technologies, the Regulation of the People’s Republic of China on Controlling the Export of Guided Missiles
and Affiliated Items and Technologies, the Regulation of the People’s Republic of China on Controlling the Export of Dual-purpose
Biological Products and Affiliated Equipments and Technologies, and the Measures for Controlling the Export of Relevant Chemical
Products and Affiliated Technologies, and have been adopted at the 11th executive meeting of the MOFTEC. They are hereby promulgated
for effect as of November 12, 2002.

Shi Guangsheng, Minister of the MOFTEC

November 12, 2002

Measures of the People’s Republic of China for the Administration of the Export Registration of Sensitive Items and Technologies

Article 1

With a view to regulating the management order of the export of sensitive items and technologies, and enhancing the administration
of the export management of sensitive items and technologies, the present Measures have been formulated on the basis of the Regulation
of the People’s Republic of China on Controlling the Export of Dual-purpose Nuclear Products and Affiliated Technologies, the Regulation
of the People’s Republic of China on Controlling the Export of Guided Missiles and Affiliated Items and Technologies, the Regulation
of the People’s Republic of China on Controlling the Export of Dual-purpose Biological Products and Affiliated Equipments and Technologies,
and the Measures for Controlling the Export of Relevant Chemical Products and Affiliated Technologies.

Article 2

The term “sensitive items and technologies” as mentioned in the present Measures shall refer to any of the items and technologies
as described in the name lists attached to the Regulation of the People’s Republic of China on Controlling the Export of Dual-purpose
Nuclear Products and Affiliated Technologies, the Regulation of the People’s Republic of China on Controlling the Export of Guided
Missiles and Affiliated Items and Technologies, the Regulation of the People’s Republic of China on Controlling the Export of Dual-purpose
Biological Products and Affiliated Equipments and Technologies, and the Measures for Controlling the Export of Relevant Chemical
Products and Affiliated Technologies.

Article 3

Any business operator that engages in the export of sensitive items and technologies (hereafter “business operator”) shall apply for
registration with the Ministry of Foreign Trade and Economic Cooperation (hereafter “MOFTEC”) according to the provisions of the
present Measures. No entity or individual may, without being registered, engage in the export of any sensitive item or technology.

Article 4

Any business operator that meet the following conditions may apply to the Department of Scientific and Technologic Development and
the Import and Export of Technologies under the MOFTEC (hereafter “the Technology Department”) for registration.

(1)

Having obtained a certificate of enterprise qualification for import and export or an approval certificate of foreign-funded enterprise
upon the approval of the MOFTEC, and having obtained a business license issued by the administrative department of industry and commerce;

(2)

Having passed the annual inspections of the administrative department of industry and commerce and the administrative department of
foreign trade and economic cooperation;

(3)

Having no record of criminal sanctions imposed by the state or administrative punishment imposed by relevant departments for engagement
in illegal business operations within the recent three years;

(4)

Having knowledge of the performance, indices and major uses of the items and technologies that it applies for management;

(5)

Having a department or institution that takes charge of the export and after-sales follow-up services.

Article 5

To apply for registration, a business operator shall truthfully fill in and submit the following materials:

(1)

Application Form of the People’s Republic of China for the Export Registration of Sensitive Items and Technologies (see Attachment
I);

(2)

Business License of Legal Person Enterprise (in photocopy);

(3)

Qualifications Certificate of an Import & Export Enterprise (in photocopy) or Approval Certificate of a Foreign-funded Enterprise
(in photocopy).d.

Article 6

The Technology Department under the MOFTEC shall, within 10 workdays after receiving the application for registration, decide whether
registration is to be granted. Where registration is to be granted, a Registration Certificate of the People’s Republic of China
for the Export of Sensitive Items and Technologies (hereafter “Registration Certificate”, see Attachment II) shall be issued, and
to which the Special Seal of the People’s Republic of China for Export Control” shall be affixed. In case the materials submitted
by the business operator is incomplete and need to be supplemented, the time limit for registration shall be counted as of the day
when complete materials are received.

Article 7

No business operator may, in the process of applying for registration, deliberately conceal any true facts, provide any false information
or obtain a Registration Certificate by any unlawful means.

Article 8

The Registration Certificate shall be valid to the registered business operator only, and may not be forged, altered, lent, leased
or transferred.

Article 9

In case the name of the enterprise is changed or the enterprise is merged, split or rescinded, the business operator shall inform
the Department of Technology under the MOFTEC and return the original Registration Certificate in good time. In case it need to continue
engaging in the export of sensitive items and technologies, it shall go through registration procedures anew and obtain a new Registration
Certificate.

Article 10

A Registration Certificate shall be valid for a term of three years. In case the business operator concerned needs to continue engaging
in the export of sensitive items and technologies, it shall accomplish the change of Registration Certificates one month prior to
the expiration of the valid term.

Article 11

In case any Registration Certificate is damaged or missing, the business operator concerned shall inform the Department of Technology
under the MOFTEC and submit a written explanation in good time. If it needs to continue engaging in the export of sensitive items
and technologies, it shall go through the procedures of registration anew, and obtain a new Registration Certificate.

Article 12

A business operator shall, when applying for approval certificates for the export of sensitive items and technologies, show its Registration
Certificate.

Article 13

All registered business operators shall, when engaging in the export of sensitive items and technologies, rigidly comply to the laws,
regulations and ministerial rules of the state concerning export control, and shall voluntarily accept the administration of the
MOFTEC.

Article 14

Any business operator who unlawfully engages in the export of any sensitive item or technology without being registered shall be dealt
with according to relevant statutory provisions including the Regulation of the People’s Republic of China on Controlling the Export
of Dual-purpose Nuclear Products and Affiliated Technologies, the Regulation of the People’s Republic of China on Controlling the
Export of Guided Missiles and Affiliated Items and Technologies, the Regulation of the People’s Republic of China on Controlling
the Export of Dual-purpose Biological Products and Affiliated Equipments and Technologies, and the Measures for Controlling the Export
of Relevant Chemical Products and Affiliated Technologies, etc.

Article 15

Any business operator that violates the provisions of either Article 7 or 8 or 9 of the present Measures may, apart from being given
a warning by the MOFTEC, be punished by having its Registration Certificate canceled according to relevant provisions.

Article 16

In case any registered business operator commits any act of violating any of the laws, regulations or ministerial rules of the state
concerning export control in the process of managing the export of sensitive items or technologies, the MOFTEC may, apart from meting
out punishments thereto according to relevant statutory provisions, cancel the Registration Certificate thereof according to relevant
provisions. The business operator shall, after the Registration Certificate thereof being canceled, go through registration procedures
anew before engaging in the export of sensitive items and technologies.

Article 17

The term “photocopy” as mentioned in the present Measures shall refer to one that bears the seal of the certificate issuing organ.

Article 18

The power to interpret the present Measures shall remain with the MOFTEC.

Article 19

The present Measures shall enter into force as of November 12, 2002. The Measures of the People’s Republic of China for the (Interim)
Administration of the Export Registration of Guided Missiles and Affiliated Items and Technologies shall be repealed concurrently.

Attachment:

1.Application Form of the People’s Republic of China for the Export Registration of Sensitive Items and Technologies(ommitted)

2.Certificate of the People’s Republic of China for the Export Registration of Sensitive Items and Technologies(ommitted)



 
The Ministry of Foreign Trade and Economic Cooperation
2002-11-12

 







INTERIM MEASURES FOR THE ADMINISTRATION OF THE OPERATIONS OF FOREIGN EXCHANGE PURCHASE AND SALE CONDUCTED BY DESIGNATED FOREIGN EXCHANGE BANKS

The People’s Bank of China

Decree of the People’s Bank of China (PBC)

No.4

Interim Measures for the Administration of the Operations of Foreign Exchange Purchase and Sale Conducted by Designated Foreign Exchange
Banks was approved on the 39th official meeting held by the PBC on October 8, 2002. It is hereby announced to be effective as from
December 1, 2002.

Governor of the People’s Bank of China Dai Xianglong

November 16, 2002

Interim Measures for the Administration of the Operations of Foreign Exchange Purchase and Sale Conducted by Designated Foreign Exchange
Banks

Chapter I General Provisions

Article 1

In accordance with the Regulations on the Exchange System of the People’s Republic of China (hereinafter referred to as regulations
on the exchange system) and other related laws and regulations, the Measures is formulated with a view to regulating the operations
of foreign exchange purchase and sale conducted by the designated foreign exchange banks, clarifying the principles of the administration
of the self-satisfying foreign exchange purchase and sale, and ensuring the stable operation of the foreign exchange market.

Article 2

The PBC and its branches as well as the State Administration of Foreign Exchange (SAFE) and its branches are the administration agencies
responsible for supervising the operations of foreign exchange purchase and sale conducted by the designated foreign exchange banks.
The PBC, together with the SAFE, shall be in charge of granting and revoking the franchise of the operations of foreign exchange
purchase and sale. The SAFE shall be responsible for the daily supervision over the operations of foreign exchange purchase and sale,
prescription and adjustment of the positions of foreign exchange purchase and sale, and off-site inspection. The on-site inspection
shall be carried out by the SAFE together with the PBC. The SAFE is enpost_titled to reject the applications of financial institutions
for the operations of foreign exchange purchase and sale, suspend or revoke the franchise of the said operations of the designated
foreign exchange banks that have violated relevant regulations.

Article 3

The definitions of the terms in the Measures are as follows:

1.

Designated foreign exchange banks refer to the financial institutions approved by the PBC to undertake the operations of foreign exchange
purchase and sale, including both Chinese-capital financial institutions and foreign-capital financial institutions. The Chinese-capital
financial institutions refer to the policy banks, wholly state-owned commercial banks, joint stocks commercial banks and their branches,
city commercial banks, rural commercial banks, as well as other franchised financial institutions. The foreign-capital financial
institutions refer to the foreign banks, branches of foreign banks, equity joint-venture banks, and other franchised financial institutions
as stated in the Regulations on the Administration of Foreign-capital Financial Institutions of the People’s Republic of China.

2.

Operations of foreign exchange purchase and sale with clients” refer to the conversions between Renminbi and freely convertible currencies
conducted by the designated foreign exchange banks for their clients.

3.

Operations of self-satisfying foreign exchange purchase and sale refer to the conversions between Renminbi and freely convertible
currencies resulted from the demand of the designated foreign exchange banks.

4.

Positions of foreign exchange purchase and sale(hereafter referred to as positions) refer to funds prescribed by the SAFE, held by
the designated foreign exchange banks, and specially used for foreign exchange purchase and sale, including the specific amount and
stipulated floating range.

Article 4

For conducting the operations of foreign exchange purchase and sale, the financial institutions shall apply to the PBC and obtain
the franchise of designated foreign exchange bank. The financial institutions which are not the designated foreign exchange banks
are prohibited to undertake the operations if foreign exchange purchase and sale.

Article 5

When undertaking of the operations of self-satisfying foreign exchange purchase and sale and the operations of foreign exchange purchase
and sale with clients, the designated foreign exchange banks shall observe the provisions of the Measures and other relevant regulations
concerning the administration of the operations of foreign exchange purchase and sale, control and prepare statistics separately
for the two kinds of operations.

Article 6

The designated foreign exchange banks shall abide by the rules on the administration of the positions, sell the surplus positions
in time through the inter-bank market, and shall not, without the SAFE’s approval, use the positions to cover the self-satisfying
foreign exchange purchase and sale under capita and financial account.

Article 7

The designated foreign exchange banks shall establish separate accounting items for the operations of foreign exchange purchase and
sale, under which, operations of foreign exchange purchase and sale with clients, operations of self-satisfying foreign exchange
purchase and sale, redistribution of the positions with their own system, and “long” or “short” position settlement through the inter-bank
market shall be booked separately.

Article 8

The designated foreign exchange banks shall establish a system for keeping the vouchers and bills related to the operations of foreign
exchange purchase and sale, and keep for no less than 5 years related vouchers and bills separately for their operations of foreign
exchange purchase and sale with clients and operations of self-satisfying foreign exchange purchase and sale.

Article 9

The designated foreign exchange banks shall submit correctly and in a timely fashion to the SAFE the data of foreign exchange purchase
and sale, the positions as well as other relevant statistical tables and materials prescribed by the SAFE in accordance with laws
and regulations.

Article 10

A system of recording shall apply to the designated foreign exchange banks’ large amount transactions of foreign exchange purchase
and sale.

Article 11

The SAFE shall exercise a system of examination in the form of exams, questionnaires etc. to test the competence of personnel (department
managers or presidents in charge) in charge of the operations of foreign exchange purchase and sale of the designated foreign exchange
banks.

Chapter II Market Access and Exit of the Operations of Foreign Exchange Purchase and Sale

Article 12

A financial institution satisfying the following conditions may apply for the franchise of the operations of foreign exchange purchase
and sale:

1.

Established upon the approval of the PBC and having obtained the franchise of financial business;

2.

Having solid management structure and well defined internal control systems, in eluding: (1) Operating rules on the operations of
foreign exchange purchase and sale; (2) Statistical and reporting systems for the operations of foreign exchange purchase and sale;
(3) System for the management of the positions; (4) System for the management of vouchers and bills related to foreign exchange purchase
and sale; (5) Separate accounting items and approach for foreign exchange purchase and sale, and so on.

3.

Professionals having been trained by the SAFE and passed the relevant exams of the SAFE;

4.

Having a system for receiving and sending quotations of foreign exchange purchase and sale of foreign exchange;

5.

Having the electronic equipment and communication facilitates necessary for real time inquiry of the electronic ledger of the import
and export declaration forms, submission of the data of balance of payments statistical reporting and of foreign exchange purchase
and sale;

6.

Where a branch of a financial institution applies for the franchise of the said operations, the authorization from its head office
or the superior (the department in charge) is needed;

7.

Well managed existing operations of foreign exchange with sound internal control, being able to rectify and redress its previous acts
violating foreign exchange rules in accordance with the requirements of the PBC or SAFE;

8.

Other conditions as prescribed by the PBC or SAFE.

Article 13

When applying for the franchise of the operations of foreign exchange purchase and sale, a financial institution shall present to
the PBC the following documents, and sent the duplicates to the SAFE.

1.

An Application report for undertaking operations of foreign exchange purchase and sale;

2.

A feasibility study report on undertaking the operations of foreign exchange purchase and sale;

3.

The name list CVs, and exam-passed certificates issued by the SAFE of the professionals who will take on operations of foreign exchange
purchase and sale;

4.

A brief introduction to electronic and communication facilitates as well as premises necessary for the operations of foreign exchange
purchase and sale;

5.

The rules and internal control system for the operations of foreign exchange purchase and sale;

6.

Other documents as required by the PBC or SAFE.

In the event that a branch of a financial institution applies for the franchise of the operations of foreign exchange purchase and
sale, besides the documents mentioned above, the approval document from its head office or the superior (the department in charge)
shall be presented.

Article 14

The procedure for the examination and approval of application for undertaking the operations of foreign exchange purchase and sale
is as follows:

1.

The applications for launching the operations of foreign exchange purchase and sale by the head offices of policy banks, wholly state-owned
commercial banks, and commercial banks with joint stocks shall be examined and approved by the PBC together with the SAFE

2.

Applications for launching the operations of foreign exchange purchase and sale by the branches of the policy banks, wholly state-owned,
and commercial banks with joint stocks; city and rural commercial banks; other Chinese-capital financial institutions and foreign-capital
banks shall be examined and approved by the local branch or operation administration department of the PBC together with the local
branch or exchange administration offices of the SAFE; the branches and operation administration offices of the PBC may, according
to the supervising ability of the key sub-branches under their jurisdiction, authorize the key sub-branches to examine and approve,
jointly with the local sub-branches of the SAFE, the application for launching the said operations by the sub-branches of banks,
city commercial banks, rural commercial banks, other Chinese-capital financial institutions and foreign-capital banks under their
jurisdiction.

Article 15

In case the approval of an application for undertaking the operations of foreign exchange purchase and sale is made by the PBC consulting
with the SAFE, the SAFE shall issue its view to the PBC within 15 working days from the date of receiving the documents to be countersigned.

Article 16

The designated foreign exchange banks franchised to handle the operations of foreign exchange purchase and sale, before the official
start of the said operations, shall have their electronic equipment and communication facilities prescribed by paragraph 5, article
12 or this Measure inspected by the local SAFE office.

Article 17

In application for terminating the operations of foreign exchange purchase and sale, the designated foreign exchange banks shall present
the PBC with the following documents:

1.

An application report for terminating the operations of foreign exchange purchase and sale (including the reason for termination,
measures and procedure for handling related assets and liabilities after termination);

2.

The approval document from its board of directors, head office or the superior (the department in charge);

3.

Other documents as required by the PBC and SAFE.

When examining and approving the applications for terminating the operations of foreign exchange purchase and sale of the designated
foreign exchange banks, the PBC shall send to the SAFE a duplicate of the approval.

Chapter III Administration of the Positions

Article 18

The designated foreign exchange bank shall apply to SAFE for the prescription of the positions within 30 working days from the date
of receiving the franchise of the operations of foreign exchange purchase and sale.

Article 19

The SAFE shall exercise limit control over the positions of the designated foreign exchange banks and check them on a daily basis.

Article 20

The jurisdictions of prescribing the positions are as follows:

1.

The positions limit for the head offices of the wholly state-owned commercial banks, commercial banks with joint stocks and policy
banks shall be prescribed by the SAFE;

2.

The positions limit for the city commercial banks, rural commercial banks, other Chinese-capital financial institutions, and foreign-capital
banks shall be prescribed by the local branch of the SAFE and reported to the SAFE for record;

Article 21

The SAFE offices shall prescribe the positions limit for the designated foreign exchange banks according to the principle of legal
person, and shall not prescribe separate limits for their branches and sub-branches.

The positions of the branches of the designated foreign exchange banks shall be allocated and collectively managed by their head offices
within the limits prescribed by the SAFE offices. The result of allocation shall be submitted to the local SAFE offices in the domiciles
of the branches for record. The local SAFE offices shall be in charge of the daily administration of the positions of the local designated
foreign exchange banks.

Article 22

The basis for the prescription and adjustment of the positions shall be is as follows:

1.

The scale of the paid-in capital or the operating funds of the designated foreign exchange bank;

2.

The number of the branches and sub-branches;

3.

The average of daily net foreign exchange purchase;

4.

The maximum amount of daily sale of foreign exchange;

5.

The maximum amount of single purchase or sale of foreign exchange;

6.

The quality of the submission of the data of daily positions;

7.

The national macro-economic conditions, such as the level of foreign exchange reserves and interest rates of the local and foreign
currencies, and so on;

8.

Other factors.

Article 23

Having been approved by SAFE, a designated foreign exchange bank may employ its Renminbi operating funds to buy foreign exchange through
inter-bank foreign exchange market as its positions.

Upon the receipt of the approval of the SAFE office concerned, a designated foreign exchange bank shall purchase foreign exchange
as its positions with its Renminbi operating funds through inter-bank foreign exchange market within 30 working days . If it fails
to do so within the time limit, the SAFE office’s approval shall automatically expire on its due date.

Article 24

Where the designated foreign exchange bank needs to adjust the positions limit due to dramatic changes in the volume of its foreign
exchange purchase and sale, it shall present to the concerned SAFE office a written application. Without the approval from the SAFE
office the designated foreign exchange bank shall not adjust the positions limit arbitrarily.

Article 25

After receiving the franchise of designated foreign exchange bank, the head office of a designated foreign exchange bank shall apply
to the China Foreign Exchange Trading Centre for the membership of inter-bank foreign exchange market; where a branch of a designated
foreign exchange bank applies for such membership, it shall obtain the authorisation from its superior (the department in charge).
After receiving the membership of inter-bank foreign exchange market, the branch and sub-branch of the designated foreign exchange
bank may long or short its positions either through the inter-bank foreign exchange market or within its own system. Without such
membership, the branch and sub-branch shall long and short its positions only within its own system.

Article 26

A designated foreign exchange bank shall manage its positions on a daily basis, keep its positions within the limit prescribed by
the SAFE office, and present a report on its daily positions to the SAFE office concerned on a daily basis.

Longs and shorts of the positions between the designated foreign exchange banks shall be undertaken only through the inter-bank foreign
exchange market.

Article 27

The designated foreign exchange bank’s positions for each business day shall be calculated in US dollar. The loss or gain resulted
from the conversion shall be recorded in other items of currency exchange, and shall not be incorporated into the positions.

Article 28

Zero-position management shall be adopted by the designated foreign exchange bank whose positions limit has not been prescribed by
the SAFE office concerned. Its net purchase or sale of foreign exchange on every business day shall be settled through the interbank
foreign exchange market on the next business day.

Article 29

In the event that the designated foreign exchange bank applies for terminating its operations of foreign exchange purchase and sale
on its own initiative, or the PBC or SAFE revokes its franchise of the operations of foreign exchange purchase and sale due to its
operation violating regulations, the said bank shall apply to the SAFE office concerned within 30 working days from the termination.
After receiving the approval from the SAFE office, the designated foreign exchange bank shall clear its positions up to the liquidation.

Chapter IV Administration of the Operations of Self-satisfying Foreign Exchange Purchase and Sale

Article 30

Unless otherwise stipulated, after reporting to the SAFE office concerned for record, the designated foreign exchange bank shall sell
its net foreign exchange profits through inter-bank foreign exchange market within 3 months after the end of the current fiscal year,
or within 10 working days after the annual profit distribution arrangement is approved by the board of directors.

The net foreign exchange profits of a foreign-funded bank without the license of Renminbi business do not have to be sold.

Article 31

The Renminbi net gains of a foreign bank with the license of Renminbi business may be converted into foreign exchange and remitted
abroad. The conversion and remittance shall be reported to the local SAFE office for record.

Article 32

The self-satisfying commodity import of a designated foreign exchange bank shall, according to relevant provisions related to factorage
import, be conducted by the foreign trade company with the franchise of factorage foreign trade. The designated foreign exchange
bank shall not make outward payment directly.

Article 33

The payment to overseas for self-satisfying service by the designated foreign exchange bank may be made either directly from its foreign
exchange account, or purchased foreign exchange in accordance with relevant laws and regulations.

Article 34

The payment of a designated foreign exchange bank for its self-satisfying transaction under capital and financial account approved
by the SAFE office concerned shall be made with its own foreign exchange operating funds.

In the event that a bank has advanced foreign exchange for its client in the business of foreign exchange loan, international settlement,
foreign exchange credit card, and so on, and the client fails to pay back on time, the bank offset the loss with its own foreign
exchange paid-in capital or operating funds in accordance with relevant laws and regulations, and shall not purchase foreign exchange
without approval or use the foreign exchange sold by its clients for such purpose.

The shortfall of foreign exchange capital or operating funds of the head office of a designated foreign exchange bank, upon the approval
of the SAFE office concerned, may be made up by purchasing foreign exchange through the inter-bank foreign exchange market.

Chapter V Administration of the Operations of Foreign Exchange Purchase and Sale with Clients

Article 35

The designated foreign exchange bank shall carry out the operations of foreign exchange purchase, sale, and payment with clients verify
the prescribed valid proofs and business bills, sign and seal thereon and keep them for future check in accordance with relevant
rules on foreign exchange purchase, sale, and payment.

Article 36

A designated foreign exchange bank shall, on the basis of the renimibi base rates quoted by the PBC for the current day and the prescribed
floating range, quote the exchange rates of Renminbi against foreign currencies and undertake the operations of foreign exchange
purchase and sale of foreign exchange with clients

Article 37

Foreign exchange sale and purchase by a financial institution without the franchise of designated foreign exchange bank shall be handled
through the designated foreign exchange bank.

Article 38

The exchange house conducting the operations of exchange between Renminbi and foreign currencies for individuals shall get the authorization
from the designated foreign exchange bank. Its daily purchase and sale shall be incorporated into the authorizing bank’s statistics
of foreign exchange purchase and sale, Foreign exchange more or less than the limit of its revolving funds shall be sold/bought by
the authorizing bank via the interbank foreign exchange market.

Chapter VI Penalty Provisions

Article 39

In violation of the Measures or other relevant provisions related to foreign exchange purchase, sale and payment, the designated foreign
exchange bank shall be penalized in accordance with the Regulations on the Exchange System and other relevant regulations.

In the event that one of the following cases occurs to the designated foreign exchange bank, the PBC shall revoke its franchise of
the operations of foreign exchange purchase and sale:

1.

Been taken-over by the PBC due to statutory reasons;

2.

Dismissed or been declared to bankrupt according to law;

3.

The franchise of the operations of foreign exchange been revoked by the PBC according to law.

Article 40

In the event that one of the following cases occurs to the designated foreign exchange bank, SAFE shall suspend or revoke its franchise
of the operations of foreign exchange purchase and sale in addition to giving it penalties according to the Regulations on the Exchange
System:

1.

Handling foreign exchange purchase, sale or payment of foreign exchange for clients without prescribed valid proofs and business bills,
and the cumulative amount exceeding the equivalent of 1 million US dollar;

2.

Handling foreign exchange purchase, sale or payment for clients without full set of in the prescribed valid proofs and business bills
and the cumulative amount exceeding the equivalent of 5 million US dollar;

3.

Handling foreign exchange sale of foreign exchange for clients beyond the amount indicated by the valid proofs and business bills
and the cumulative amount exceeding the equivalent of 5 million US dollar;

4.

Handling self-satisfying foreign exchange purchase and sale that shall be reported to the SAFE office concerned for approval without
approval;

5.

The amount of purchase/sale of foreign exchange in violation of regulations accounts for more than 10 percent of its sum purchase/sale
of foreign exchange for the current year;

6.

The quantity of deals of purchase/sale of foreign exchange in violation of regulations accounts for more than 10 percent of its sum
deals of purchase/sale of foreign exchange for the current year;

7.

Other serious acts violating the regulations on purchase and sale of foreign exchange.

Article 41

In the event that a designated foreign exchange bank commits one of the following acts in violation of the regulations governing the
positions, the SAFE office concerned shall suspend or revoke its franchise of operations of foreign exchange purchase and sale, in
addition to giving it penalties in accordance with the Regulations on the Exchange System:

1.

fails to clear its long or short positions through the inter-bank foreign exchange market for no less than 5 working days consecutively;

2.

fails to clear its long or short positions through the inter-bank foreign exchange market for more than ten times cumulatively within
a quarter;

3.

for a consecutive three months, error occurs in the positions statistics for no less than four times per month;

4.

Other serious acts violating the regulations governing the positions.

Article 42

In the event that a designated foreign exchange bank violates the report system for foreign exchange purchase and sale by failing
to submit statistical tables and materials and have the abnormal circumstances recorded, the SAFE office concerned shall penalize
it in accordance with the Regulations on the Exchange System and other relevant regulations. In the event that a designated foreign
exchange bank fails for several times within one year to submit the statistical tables and materials as required, and have the large
amount purchase and sale of foreign exchange recorded in accordance with relevant regulations, the SAFE office concerned shall suspend
or revoke its franchise of the operations of foreign exchange purchase and sale.

Article 43

In the event that the designated foreign exchange bank and exchange houses violate the Measures and other regulations governing foreign
exchange purchase, sale and payment, the competent agencies shall penalize the person who is directly in charge or responsible in
accordance with the Provisions on the Administrative Sanctions to the Financial Institutions and Direct Responsible Persons Violating
Provisions on the Administration of Foreign Exchange Purchase and Sale, and the Interim Provisions on the Administrative or Disciplinary
Sanctions Given to the Crimes of Defrauding, Illegal Arbitrage, Evasion, Illegal Purchase and Sale of Foreign Exchange, and Other
Acts Violating the Regulations on Foreign Exchange Administration, and so on.

Chapter VII Supplementary Provisions

Article 44

The regulations governing forward foreign exchange purchase and sale and other derivatives involving the exchange between Renminbi
and foreign currencies shall be formulated separately by the PBC.

Article 45

The Measures shall be interpreted by the PBC.

Article 46

The Measures shall enter into force as of December 1, 2002. In case of any conflict with previous rules and regulations, the Measures
shall prevail. Article 4 of the Rules for the Implementation of the Foreign-capital Bank’s Operations of Foreign Exchange Purchase,
Sale and Payment promulgated on June 18, 1996 by the PBC, the Announcement of the PBC on Incorporating the Enterprises with Foreign
Investment into the System of Foreign Exchange Purchase and Sale through Banks promulgated on June 20, 1996, and the Official Reply
of the General Affairs Department of the SAFE on Issues Related to Franchising the Branches and Sub-branches of the Wholly State-owned
Commercial Banks to Undertake the Operations of Foreign Exchange Purchase and Sale ( HuiZongFu [2001] No.1) shall be nullified at
the same time.



 
The People’s Bank of China
2002-11-16

 







CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...