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NOTICE OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON RELEVANT ISSUES CONCERNING THE ADMINISTRATION ON COMMISSION SALE OF FOREIGN CURRENCY TRAVELERS CHECK

State Administration of Foreign Exchange

Notice of the State Administration of Foreign Exchange on Relevant Issues concerning the Administration on Commission Sale of Foreign
Currency Travelers Check

HuiFa [2004] No.15

March 1st, 2004

The branches and departments of foreign exchange administration of the State Administration of Foreign Exchange of all provinces,
autonomous regions, and municipalities directly under the Central Government, the branches of Shenzhen, Dalian, Qingdao, Xiamen,
and Ningbo, and all the Chinese-funded designated foreign exchange banks:

With a view to strengthening supervision over the flowing of foreign currency, and regulating the administration on foreign currency
travelers check, and in accordance with the “Provisions on the Management of Settlement, Sales and Payment of Foreign Exchange” (HuiFa
[1996] No.210), the Interim Measures for the Administration on Carrying Foreign Currency Cash to Enter and Exit the Territory (HuiFa
[2003] No.102), and the relevant provisions, we hereby make the following notice on the relevant issues concerning the commission
sale of foreign currency travelers check.

I.

The term “foreign currency travelers check” as mentioned in this Notice refers to the note, which is sold on commission basis by domestic
commercial banks (hereinafter referred to as the “banks”), and printed by overseas banks or special financial institutions, with
the issuing institution as the final payer and with the convertible currency as the price calculation and settlement currency as
well as with fixed denomination.

II.

The objects to whom the foreign currency travelers check is commissioned to sell, may be the domestic institutions, foreign institutions
within the territory of China, or domestic resident individuals or non-resident individuals.

III.

The term “non-resident individuals” as mentioned in this Notice shall refer to foreign natural persons (including person without nationality),
Hong Kong, Macao, and Taiwan compatriots, and Chinese natural persons who hold the passport of the People’s Republic of China but
have obtained the right of permanent residence overseas.

IV.

The foreign currency travelers check sold by the banks on commission basis is limited in principle to overseas traveling, going on
a pilgrimage to sacred places, visiting or meeting relatives, overseas hospitalization, studying abroad and other foreign payment
under the non-trade item, and shall not be used for foreign payment under trade item or capital item.

V.

When handling the business of commission sale of foreign currency travelers check, the banks shall make examination strictly in accordance
with the “Provisions on the Management of Settlement, Sales and Payment of Foreign Exchange” and the “Detailed Rules for the Implementation
of the Administration on Purchase of Foreign Exchange by Domestic Residents” (HuiFa [2002] No.68) and the Notice on Relevant Issues
concerning Regulation of Foreign Exchange Management on Non-resident Individuals (HuiFa [2004] No. 6) and the pertinent provisions,
and handle purchasing formalities for those meeting the requirements. No bank shall handle purchase formalities for those not meeting
the requirements.

VI.

A domestic institution or a foreign institution within the territory of China, applying for purchasing foreign currency travelers
check, shall buy it with the capital under the current foreign exchange account, foreign exchange capital account, and in other foreign
exchange accounts specifying that the money may be used for outlays under current account, or with the foreign exchange purchased
by using the capital of the Renminbi account. No foreign currency travelers check shall be purchased by using foreign currency cash
or Renminbi cash.

VII.

A domestic institution or a foreign institution within the territory of China shall, when purchasing foreign currency travelers check,
submit the following certification documents:

1.

Application for purchase;

2.

Official documents of approval for task of going abroad or passport with effective visa;

3.

Budget form for fees for going abroad; and

4.

Other certification documents.

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchase
of foreign currency travelers check for those meeting the requirements.

VIII.

The domestic resident individuals may purchase foreign currency travelers check with the capital in their foreign exchange deposit
accounts or with foreign currency cash, or with the capital in their Renminbi accounts or with the foreign exchange purchased by
using Renminbi cash.

IX.

Non-resident individuals may purchase foreign currency travelers check with the capital in their foreign exchange deposit accounts
or with foreign currency cash.

The legal Renminbi income of the non-resident individuals within the territory of China may be used for purchasing foreign currency
travelers check after being converted into foreign exchange in accordance with the pertinent provisions.

X.

Where a resident individual or non-resident individual purchases foreign currency travelers check with the capital in his foreign
exchange cash accounts, he shall handle it according to the provisions as follows:

1.

Where the foreign currency travelers check purchased at one time is equivalent to 10 thousand dollars or less, he shall file an application
to the bank with the certification documents as follows:

(1)

Application for purchase;

(2)

Effective identification certificate of the person himself;

(3)

Passport with effective entry visa of the country or region, which has been properly handled, or the pass to Hong Kong and Macao regions
(including the pass for coming-and-going to Hong Kong and Macao regions).

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchasing
foreign currency travelers check for those in conformity with the provisions.

2.

Where the foreign currency travelers check purchased at one time is equivalent to over 10 thousand dollars up to 50 thousand dollars,
he shall file an application to the bank with the following certification documents:

(1)

Application for purchase;

(2)

Effective identification certificate of the person himself;

(3)

Passport with effective entry visa of the country or region, which has been properly handled, or the pass to Hong Kong and Macao regions
(including the pass for coming-and-going to Hong Kong and Macao regions); and

(4)

Relevant documents, which can prove the truthfulness of the purpose of the use of the foreign currency travelers check.

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchasing
foreign currency travelers check for those in conformity with the provisions.

3.

Where the foreign currency travelers check purchased at one time is equivalent to over 50 thousand dollars, he shall, on the strength
of the certification documents as prescribed in paragraph 2 of the present Article, file an application to the foreign exchange administration
at the place where it is located, who shall then examine and verify the truthfulness thereof. And the banks shall handle formalities
for purchasing foreign currency travelers check for him according to the approval documents issued by the local foreign exchange
administration.

XI.

Where a domestic resident individual or non-resident individual purchases foreign currency travelers check with the capital in their
foreign currency cash deposit accounts or with foreign currency cash, he shall handle it according to the provisions as follows:

1.

Where the foreign currency travelers check purchased at one time is equivalent to 10 thousand dollars or less, he shall file an application
to the bank with the certification documents as follows:

(1)

Application for purchase;

(2)

Effective identification certificate of the person himself;

(3)

Passport with effective entry visa of the country or region, which has been properly handled, or the pass to Hong Kong and Macao regions
(including the pass for coming-and-going to Hong Kong and Macao regions); and

(4)

A domestic resident individual shall also provide the bank withdrawal certificate and other certification documents that can prove
his legal foreign exchange resources. A non-resident individual shall also provide the customs declaration form for the amount of
foreign currency cash declared by him when he enters China, and other certification documents that can prove his legal foreign exchange
resources.

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchasing
foreign currency travelers check for those in conformity with the provisions.

2.

Where the foreign currency travelers check purchased at one time is equivalent to over 10 thousand dollars up to 20 thousand dollars,
he shall file an application to the bank with the certification documents as follows:

(1)

Application for purchase;

(2)

Effective identification certificate of the person himself;

(3)

Passport with effective entry visa to the country or region, which has been properly handled, or the pass to Hong Kong and Macao regions
(including the pass for coming-and-going to Hong Kong and Macao regions); and

(4)

A domestic resident individual shall also provide the bank withdrawal certificate and other certification documents that can prove
his legal foreign exchange resources. A non-resident individual shall also provide the customs declaration form for the amount of
foreign currency cash declared by him when he enters China, and other certification documents that can prove his legal foreign exchange
resources; and

(5)

Relevant documents that can prove the truthfulness of its purpose.

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchasing
foreign currency travelers check for those in conformity with the provisions.

3.

Where the foreign currency travelers check purchased at one time is equivalent to over 20 thousand dollars, he shall, on the strength
of the certification documents as prescribed in paragraph 2 of the present Article, file an application to the foreign exchange administration
at the place where it is located, who shall then examine and verify the truthfulness thereof. And the banks shall handle formalities
for purchasing foreign currency travelers check for him according to the approval documents issued by the local foreign exchange
administration.

XII.

Where a domestic resident individual purchases foreign currency travelers check with the foreign exchange purchased in Renminbi, the
bank shall handle the formalities for purchase of foreign exchange with Renminbi in accordance with the pertinent provisions of the
“Detailed Rules for the Implementation of the Administration on Purchase of Foreign Exchange by Domestic Resident Individuals”. The
domestic resident individuals may decide by themselves the amount of foreign currency travelers check they will purchase within the
quota of the approved foreign exchange purchase.

XIII.

When purchasing foreign currency travelers check, in case the purchaser can not obtain the effective visa beforehand because of special
circumstances, he shall file an application to the banks or foreign exchange administrations respectively according to the limits
as follows:

1.

Where the equivalence is 10 thousand dollars or below, the purchaser shall file an application to the bank with the pertinent certification
documents, and the bank shall handle the formalities for him by referring to the aforesaid provisions after making examination on
the truthfulness thereof; and

2.

Where the equivalence is over 10 thousand dollars, the purchaser shall file an application to the local foreign exchange administration
with the pertinent certification documents. After the local foreign exchange administration has made examination on it, the bank
shall handle formalities for the purchase of foreign currency travelers check upon the strength of the approval documents issued
by the local foreign exchange administration.

XIV.

When handling formalities for purchasing foreign currency travelers check, the banks shall handle formalities for declaration of the
statistics on balance of international payment as prescribed.

XV.

Where a purchaser purchases foreign currency travelers check at one time by using the capital in his foreign currency cash account
or using foreign currency cash, and the amount of the foreign currency travelers check exceeds the equivalence of 10 thousand dollars,
the bank shall have them itemized, and handle formalities for report on large and doubtful payment transaction in accordance with
the “Provisions on Anti-money- laundering through Financial Institutions” (HuiFa [2003] No.1) and the “Measures for the Administration
of Reporting Large and Doubtful Payment Transactions”(HuiFa [2003] No. 3) and the relevant provisions.

XVI.

The banks shall make statistics separately on the number and amount of the business of commission sale for foreign currency travelers
check and the business of foreign currency exchange, and have them kept for future reference.

XVII.

This Notice shall enter into force as of April 1st, 2004.

All the branches shall, after receiving this Notice, transmit it to their subordinated sub-branches, foreign-funded banks and relevant
entities as soon as possible. And all the Chinese-funded designated foreign exchange banks shall transmit it to the branches or sub-branches
subject to them as soon as possible. In case any problem arises in the implementation, please feedback it to the State Administration
of Foreign Exchange in good time.



 
State Administration of Foreign Exchange
2004-03-01

 






THE PROVISIONS ON THE ADMINISTRATION OF FOREIGN-FUNDED ADVERTISING ENTERPRISES

State Administration for Industry and Commerce, Ministry of Commerce

Order of the State Administration for Industry and Commerce and the Ministry of Commerce

No. 8

The Provisions on the Administration of Foreign-funded Advertising Enterprises, which were deliberated and adopted by the State Administration
for Industry and Commerce and the Ministry of Commerce, are hereby promulgated.

Wang Zhongfu, Director General of the State Administration for Industry and Commerce

Bo Xilai, Minister ofthe Ministry of Commerce

March 2nd, 2004

The Provisions on the Administration of Foreign-funded Advertising Enterprises

Article 1

With a view to strengthening the administration on the foreign-funded advertising enterprises, and promoting the sound development
of advertising industry, the present Provisions are formulated in accordance with the laws and administrative regulations governing
the management of foreign investments and advertisements.

Article 2

“Foreign-funded advertising enterprises” as mentioned in the present Provisions refers to the Sino-foreign equity joint enterprises
and Sino-foreign contractual joint ventures lawfully engaging in advertising operations (hereinafter referred to as Sino-foreign
equity joint or contractual advertising enterprises, the same below) and foreign-funded advertising enterprises.

Article 3

Establishing a foreign-funded advertising enterprise, one shall abide by the present Provisions as well as the Law of the People’s
Republic of China on Sino-foreign Equity Joint Enterprises, the Law of the People’s Republic of China on Sino-foreign Contractual
Joint Enterprises, the Law of the People’s Republic of China on Foreign-funded Enterprises, the Advertising Law of the People’s Republic
of China, Regulations on the Management of Advertisements, the Regulations on the Qualifications of Advertising Operators or Issuers
of Advertisements and the Phraseology for Determining the Business Scope of Advertising, and other relevant laws, regulations and
rules.

Article 4

The project proposal and the feasibility study report of a foreign-funded advertising enterprise shall be subject to the examination
and approval of the State Administration for Industry and Commerce (SAIC) and its authorized administration for industry and commerce
of provincial level. The contracts and articles of associations of a foreign-funded advertising enterprise shall be subject to the
examination and approval of the Ministry of Commerce and its authorized administrative department of the provincial level.

Article 5

A foreign-funded advertising enterprise that meets the prescribed conditions may engage in designing, making, issuing, or agency of
various advertisements businesses both home and abroad. The specific business scope shall be subject to the examination and approval
of the SAIC and its authorized administration for industry and commerce of provincial level in pursuance of the Regulations on the
Qualifications of Advertising Operators or Issuers of Advertisements and the Phraseology for Determining the Business Scope of Advertising.

Article 6

The establishment of a Sino-foreign equity joint and contractual advertising enterprise, one shall conduct according to the procedures
as follows:

(1)

The main Chinese partner shall submit the documents as listed in Article 12 to the local administration for industry and commerce
competent for examining and approving the registration of foreign-funded enterprises, who shall give an opinion on the preliminary
examination, then submit the aforesaid documents to the administration for industry and commerce of the provincial level authorized
by the SAIC for examination and approval, or submit them to the SAIC for examination and approval via the administration for industry
and commerce of a province, autonomous region, municipality directly under the Central Government or city directly under State planning
upon examination and approval.

The SAIC and its authorized administration for industry and commerce of the provincial level shall make a decision on approval or
disapproval within 20 days as of the day when they received the complete set of documents.

(2)

After obtaining the Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC or
its authorized administration for industry and commerce of the provincial level, the main Chinese partner shall submit the documents
as listed in Article 13 to the administrative department of commerce of the provincial level where the to-be-established enterprise
is located. After it is approved by the administrative department of commerce of the provincial level upon examination, a Foreign-funded
Enterprise Approval Certificate shall be issued. If it is disapproved, written explanations shall be given.

(3)

The main Chinese partner shall, pursuant to the relevant regulations on enterprise registration, handle the enterprise registration
formalities in the SAIC or in its authorized administration for industry and commerce competent for examining and approving the registration
of foreign-funded enterprise on the strength of the Opinion on the Examination and Approval of the Foreign-funded Advertising Enterprise
Project issued by the SAIC and its authorized administration for industry and commerce, the Foreign-funded Enterprise Approval Certificate
issued by the administrative department of commerce of the provincial level and other documents as required by the laws and regulations.

Article 7

The establishment of a foreign-funded advertising enterprise, one shall conduct according to the procedures as follows:

(1)

The foreign investor shall submit to the SAIC the documents as listed in Article 14 .

The SAIC shall make a decision on approval or disapproval within 20 days as of the day it receives the complete set of documents.

(2)

After obtaining the Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC, the
foreign investor shall submit the documents listed in Article 15 to the administration for industry and commerce of the provincial
level where the to-be-established enterprise is located. The administration for industry and commerce of the provincial level shall
give a preliminary examination opinion and submit the aforesaid documents to the Ministry of Commerce for examination and approval
within 20 days.

The Ministry of Commerce shall make a decision on approval or disapproval within 20 days as of the day it receives the documents.
After examination and approval, a Foreign-funded Enterprise Approval Certificate shall be issued.

(3)

The foreign investor shall, according to the relevant regulations on the enterprise registration, go through the enterprise registration
formalities in the SAIC on the strength of the Opinion on the Examination and Approval of the Foreign-funded Advertising Enterprise
Project issued by the SAIC, the Foreign-funded Enterprise Approval Certificate issued by the administrative department of commerce
of the provincial level and other documents as prescribed in the laws and regulations.

Article 8

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall conduct according to the procedures
as follows:

(1)

It shall submit the documents as listed in Article 16 to the local administrative department of commerce and the administration for
industry and commerce of the provincial level separately;

(2)

The local administrative department of commerce of the provincial level shall make a decision on approval or disapproval after consulting
the administration for industry and commerce of the same level. Where it approves, it shall simultaneously send a copy of approval
document to the administrative department of commerce of the provincial level where the to-be-established branch is located and the
administration for industry and commerce of the provincial level; if it disapproves, it shall give written explanations; and

(3)

It shall handle the enterprise registration formalities in the administration for industry and commerce competent for examining and
approving the registration of foreign-funded enterprises where the to-be-established branch is located on the strength of the approval
documents on establishment of branches and other documents as prescribed by the laws and regulations.

Article 9

Establishing a Sino-foreign equity joint or contractual advertising enterprise, the applicant shall not only meet the conditions as
provided for in the relevant laws and regulations, but also meet the following requirements:

(1)

All partners shall be enterprises engaging in advertising business;

(2)

All partners shall have existed and have engaged in advertising business for not less than 2 years since establishment; and

(3)

Having advertising achievements.

Article 10

Establishing a foreign-funded advertising enterprise, the applicant shall not only meet the relevant conditions as provided for in
the laws and regulations, but also meet the following conditions:

(1)

The investor shall be an enterprise mainly engaging in advertising business; and

(2)

The investor has existed and has engaged in advertising business for not less than 3 years since establishment.

Article 11

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall meet the following basic conditions:

(1)

Having paid up the registered capital; and

(2)

Its annual business volume is not less than RMB 20 million Yuan.

Article 12

Applying for the establishment of a Sino-foreign equity joint or contractual advertising enterprise, the main Chinese partner shall
submit the following documents to the SAIC or its authorized administration for industry and commerce of the provincial level according
to the procedures as provided for in Article 6 :

(1)

The application for the establishment of Sino-foreign equity joint or contractual enterprise;

(2)

The Notice on the Pre-approval of Enterprise Name;

(3)

The resolutions made by the partners’ shareholders’ assembly (board of directors);

(4)

The project proposal for the establishment of Sino-joint equity joint or contractual enterprise and the feasibility research report
jointly formulated by all partners;

(5)

The registration certifications of all partners;

(6)

The credit-standing certifications of all partners;

(7)

The bylaws for advertising management; and

(8)

The preliminary examination opinions of the local administration for industry and commerce.

Article 13

Applying for the establishment of a Sino-foreign equity joint or contractual advertising enterprise, the applicant shall, in accordance
with Article 6 , submit the following documents to the administrative department of commerce of the provincial level:

(1)

The Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC or its authorized
administration for industry and commerce of the provincial level;

(2)

The contract for establishing a foreign-funded advertising enterprise and articles of association;

(3)

The project feasibility research report;

(4)

The registration certifications of all partners;

(5)

The credit-standing certifications of all partners;

(6)

The Notice on the Pre-approval of Enterprise Name;

(7)

The bylaws for advertising management; and

(8)

The preliminary examination opinions of the local administrative department of commerce.

Article 14

Applying for the establishment of a foreign-funded advertising enterprise, the investor shall submit the following documents to the
SAIC according to the procedures prescribed in Article 7 :

(1)

The application for the establishment of foreign-funded advertising enterprise;

(2)

Resolutions of the investor’s shareholder’s assembly (board of directors);

(3)

The project proposal formulated by an investor and the feasibility research report;

(4)

The registration certification of the investor;

(5)

The credit-standing certification of the investor; and

(6)

The Notice on the Pre-approval of Enterprise Name.

Article 15

Establishing a foreign-funded advertising enterprise, the foreign investor shall submit the following documents to the Ministry of
Commerce according to the procedures prescribed in Article 7 :

(1)

The application for establishing a foreign-funded advertising enterprise;

(2)

The Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project;

(3)

The project proposal and feasibility research report formulated by the investor;

(4)

The registration certification of the investor;

(5)

The credit-standing certification of the investor; and

(6)

The articles of association for the establishment of the foreign-funded advertising enterprise.

Article 16

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall submit the following documents
to the administrative department of commerce of the provincial level and the administration for industry and commerce of the same
level:

(1)

The application of a foreign-funded advertising enterprise for establishing a branch;

(2)

The resolution of the board of directors;

(3)

The annual audit report on advertising operations;

(4)

The Enterprise Business License;

(5)

The business place certification; and

(6)

The enterprise’ capital verification report.

Article 17

After establishing a foreign-funded advertising enterprise, it shall, if any of the following circumstances occurs, report for approval
separately and modify the registration of the enterprise according to the procedures as provided for in Articles 6 and 7:

(1)

Modifying a partner or transferring equity;

(2)

Modifying the scope for advertising business; or

(3)

Modifying the registered capital.

Article 18

while establishing an advertising enterprise, a foreign investor may entrust a qualified agency to handle the application formalities
for it.

Article 19

All the documents required to submit according to the present Provisions shall be expressed in Chinese.

Article 20

Where a foreign investor who invests in advertising industry by merging a domestic advertising enterprise, he shall handle the formalities
as provided for in the relevant regulations and the present Provisions on merge of domestic enterprises by foreign investors.

Article 21

Where investors from Hong Kong, Macao and Taiwan establish advertising enterprises in the Mainland of China, they shall handle the
formalities by referring to the present Provisions.

Article 22

Where a foreign-funded enterprise files an application for increasing advertising business, it shall handle the formalities by referring
to the present Provisions.

Article 23

Foreign investors are allowed to hold majority equity as of the promulgation date of the present Provisions, which shall be not more
than 70% of the total equity. Foreign investors are allowed to establish foreign-funded advertising enterprises as of December 10th,
2005.

Article 24

The responsibility to interpret the present Provisions shall remain with the SAIC and the Ministry of Commerce.

Article 25

The present Provisions shall come into effect as of the promulgation. Some Provisions on the Establishment of Foreign-funded Advertising
Enterprises ([1994] No. 304) printed and distributed by the State Administration for Industry and Commerce shall be repealed simultaneously,
and any other documents contradictory to the present Provisions shall be null and void simultaneously.

Attachment:

With a view to promoting the establishment of Hong Kong and Mainland and Macao and Mainland closer economic partnership, encouraging
Hong Kong service providers and Macao service providers to establish advertising enterprises in the Mainland, the following supplementary
provisions governing Hong Kong and Macao investors’ investments in advertising industry are formulated in accordance with the Mainland
and HK Closer Economic Partnership Arrangement and the Mainland and Macao Closer Economic Partnership Arrangement:

1. As of January 1st, 2004, Hong Kong service providers and Macao service providers are allowed to establish wholly-funded advertising
enterprises.

2. Hong Kong service providers or Macao service providers shall meet the definition of “the service providers” and other relevant
requirements in the Mainland and HK Closer Economic Partnership Arrangement or in the Mainland and Macao Closer Economic Partnership
Arrangement.

3. A Hong Kong service provider or Macao service provider shall be a legal person engaging in advertising operations (including the
circumstance that the advertising isn’t its major business).

4. Where any other provisions on investments in the Mainland advertising industry made by Hong Kong service providers and Macao service
providers contradictory to the present Provisions, the latter shall prevail.



 
State Administration for Industry and Commerce, Ministry of Commerce
2004-03-02

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON INTENSIFYING THE ADMINISTRATION OF COLLECTION OF INDIVIDUAL INCOME TAX OF FOREIGN EMPLOYEES

the State Administration of Taxation

Circular of the State Administration of Taxation on Intensifying the Administration of Collection of Individual Income Tax of Foreign
Employees

Guo Shui Fa No. 27 [2004]

March 5, 2004

aus of state taxation and those of local taxation of all provinces, autonomous regions, municipalities directly under the Central
Government and cities directly under state planning, and all the entities of the Administration,

With the economic globalization and the continuous advance of the opening to the outside world, more and more foreign employees work
in our country or engage in business activities. Due to the great mobility of foreign employees, the individual income tax policies
involved become more complicated, which has brought about some difficulties for foreign employees to make accurate judgment on their
tax paying obligations and for taxation authorities to supervise tax resources. And there frequently occurs the under-declaration
and underpayment of individual income tax. With a view to intensifying the administration on individual income tax of foreign employees
and on tax payment services, and further improving the quality and efficiency of the administration of tax collection, the relevant
issues are hereby notified as follows:

I.

Enhanrstanding and perfecting administration mechanismThe individual income tax of foreign employees is strongly policy-related, which
relates to not only the issues on the determination and division of the international taxation jurisdiction, but also the specific
policies and procedures for computing the taxable income and the tax payable and is the important content of international taxation
administration. Therefore, it has to do with not only the guarantee of the state revenue, but also the maintenance of tax sovereignty
of the state to intensify the administration of the collection of individual income tax of foreign employees and to make them to
properly perform their obligations of tax payment. All the localities shall sharpen the awareness of the importance of the administration
work for collecting individual income tax of foreign employees, set up and perfect the system of post and responsibility for the
international taxation administration, enrich professionals, and improve and regulate the procedures for administration, so as to
provide safeguards for the administration of individual income tax of foreign employees.

II.

Standardizing the law enforcement to ensure the fulfillment of the policiesThe policies applicable to the individual income tax of
foreign employees include the tax laws and regulations of China, tax agreements signed between the Chinese government and the foreign
governments. All the localities shall strengthen the self-capability training, improve the vocational skills of tax staff members
and accurately grasp the relevant policies. The law enforcement acts shall be further standardized to make strict the tax laws and
disciplines and rectify the procedures for the administration of tax collection so as to ensure the fulfillment of the policies concerning
the individual income tax of foreign employees and provide an open, fair and just taxation environments for foreign employees.

III.

Improving services to facilitate foreign employees to pay taxes according to law It is the function and duty of tax authorities to
intensify the administration of collection of individual income tax of foreign employees and to provide high-quality tax payment
services. All the localities shall take effective measures to earnestly solve difficulties and problems encountered by foreign employees
in their declaration of tax payment. Tax policies shall be propagated through internet, newspapers and periodicals, televisions,
broadcast and other media. Tutorships shall be made especially to foreign employees and their withholding agents, and smooth consultation
channels shall be provided for them, so as to help them understand the relevant tax laws and regulations of China, be familiar with
the procedures for the administration of tax collection and improve their observance of tax laws. The inter-department cooperation
shall be strengthened, and smooth information communication channels shall be established by strengthening the cooperation between
the departments of entry and exit administration, industry and commerce, customs, foreign trade and economy, education, culture,
physical education, science and technology and etc., as so to timely grasp the information on employment and flow of foreign employees
and to lay a good foundation for supervision of tax resources.

IV.

Intensifying the administration of tax collection and doing a good job for recovering the overdue taxesAll the localities shall carry
out a recovery of overdue taxes before the end of 2004, which is mainly designed to encourage taxpayers to make self-examination
and corrections. And the specific requirements are as follows:

1.

Where a foreign employee or a withholding agent declares the unpaid tax of the previous years on his/its own initiative before the
end of June 2004, he/it shall, in addition to making up the unpaid taxes according to law, pay a surcharge for overdue payment at
0.5 percent of the overdue tax for each day in arrears; but he/it may not be punished;

2.

Where a foreign employee still fails to make up the taxes on his/her own initiative within the above-mentioned time limit, if he/she
has disguised the relevant facts, or falsely report or failed to report the taxable income for a long time, he/she shall be ordered
to pay the overdue taxes and a surcharge for overdue payment according to the provisions of the Law of the People’s Republic of China
on the Administration of Tax Collection, and shall be imposed a fine as well.

V.

This Circular shall be referred to in the administration of collection of individual income tax of compatriots from Hong Kong, Macao,
Taiwan and oversea Chinese.



 
the State Administration of Taxation
2004-03-05

 






MEASURES FOR THE ADMINISTRATION ON CONSOLIDATED FINANCIAL STATEMENTS IN CONDUCTING SUPERVISION OVER FOREIGN-FUNDED BANKS

China Banking Regulatory Commission

Measures for the Administration on Consolidated Financial Statements in Conducting Supervision Over Foreign-funded Banks

YinJianFa [2004] No.10

March 8th, 2004

Chapter I General Provisions

Article 1

The present Measures are hereby formulated for the purpose of implementing the Banking Supervision Law of the People’s Republic of
China and the Regulations of the People’s Republic of China on the Administration of Foreign-funded Financial Institutions and other
laws and regulations, for the purpose of regulating the supervision over the consolidation of financial statements and implementing
effective risk supervision.

Article 2

China Banking Regulatory Commission (hereinafter referred to as CBRC) shall be responsible for the guidance over the administration
of the consolidation of financial statements in foreign-funded banks.

Article 3

CBRC shall conduct supervision over the solely foreign-owned banks or joint-stock banks that have established operative branch institutions
or affiliated institutions, and foreign banks that have established two or more operative branches in China through the consolidation
of financial statements.

Through the consolidation of financial statements, CBRC can fully supervise over the worldwide operation and risk status of foreign-funded
corporate institutions registered in China, the overall business and risk status of the foreign banks in China, and pay attention
to the business risk and market behaviors thereof worldwide.

Article 4

The leading reporting bank as mentioned hereinafter refers to the parent bank of the solely foreign-funded or joint-stock banks, and
institutions for reporting consolidated financial statements and comprehensive information, which are designated by the parent bank
of a foreign bank or the regional management departments it authorizes and are put on records at the agencies of CBRC. The “supervision
bureau of consolidated financial statements ” refers to the agency of CBRC at the place where the leading reporting bank of a foreign-funded
bank is located. And “the territorial supervision bureau” refers to the agency of CBRC at the place where other business branches
of a foreign-funded bank are located.

Article 5

The “year” as mentioned in the present Measures refers to the year of the Gregorian calendar from January 1 to December 31. The fiscal
year refers to the legal fiscal year of each country.

Chapter II The Determination of the Leading Reporting Banks and their Functions

Article 6

The foreign-funded banks that the conditions of consolidated financial statement in conducting supervision as prescribed in Article
3 of the present Measures shall determine a leading reporting bank.

Article 7

Those foreign-funded corporate institutions that meet the conditions for the supervision over the consolidation of financial statements
as a result of the establishment of additional branch institutions or mergers shall file for a record at an agency of the CBRC at
the place where the parent bank is located within one month after the conditions are met.

Where a foreign bank meets the conditions for the supervision over the consolidation of financial statements due to the establishment
of additional institutions, its parent bank or authorized regional management department shall assign a leading reporting bank within
one month after they have been approved officially by the CBRC. And the leading reporting bank shall then file for a record at the
agency of CBRC at the place where it is located, and send a copy to the relevant territorial supervision bureau.

Article 8

Where a foreign bank needs to change the leading reporting bank, its parent bank or authorized regional management department shall
change the leading reporting bank one month before the end of the fiscal year. The former leading reporting bank and newly appointed
one shall put this on records at the respective local agencies of the CBRC, and send a copy to the relevant territorial supervision
bureau.

The newly appointed leading reporting bank shall undertake the functions of the leading reporting bank from the next fiscal year.

Article 9

The leading reporting bank shall employ full-time or part-time eligible managers in the China Region in light of circumstances. The
examination on the qualifications for holding such a post shall apply the filing system for the senior management personnel of foreign-funded
financial institutions as prescribed in the Detailed Rules for the Implementation of the Regulations of the People’s Republic of
China on the Administration of the Foreign-funded Financial Institutions.

Article 10

The leading reporting bank is an institution for the collection of consolidated financial statements and the comprehensive information
of a foreign-funded bank. It performs the following functions:

1.

The leading reporting bank shall submit or put on record the supervision statements, statement and report of major matters concerned,
and other supervision materials to the supervisory bureaus of consolidated financial statements according to the requirements of
supervision, and shall be responsible for the truthfulness, accuracy and timeliness of the contents submitted and filed on record.

The leading reporting bank shall also be responsible for submitting the business applications concerning several branch banks within
China to the supervisory bureaus of consolidated financial statements uniformly, and send a copy thereof to the territorial supervisory
bureaus.

2.

The leading reporting bank may attend the work meeting or proseminar convened by the CBRC on behalf of the foreign-funded bank it
is subordinated to, and propose opinions and suggestions in the name of the foreign-funded bank. The leading reporting bank, which
attends the meeting shall report in time the information of the meeting to the parent bank (general bank) or the regional management
departments and circulate a timely notice to other business branches within the territory.

The opinions and suggestions of foreign-funded banks on relevant Chinese supervision laws and regulations shall be submitted to the
supervisory bureaus of consolidated financial statements uniformly by the leading reporting bank after being collected by it, After
obtaining the feedback opinions, the leading reporting bank convey them to other business branches within China in time.

3.

The leading reporting bank shall report the relevant information in respect of economy and finance of the parent bank and home country
or region as supervision requires;

4.

The leading reporting bank shall be responsible for the information disclosure of the domestic business branches of a foreign-funded
bank.;

5.

Implementing other requirements of the supervision bureau;

The leading reporting bank shall attach electronic documents at the time of submitting written material.

Article 11

The person in charge of the leading reporting bank shall be responsible for the consolidation of financial statements undertaken by
the leading reporting bank.

Chapter III Non-On-The-Spot Supervision

Article 12

The CBRC shall be responsible for guiding and supervising over the work of its agencies in the non-on-the-spot supervision over the
consolidation of financial statements at foreign-funded banks.

Article 13

The supervisory bureaus of consolidated financial statements shall supervise over the quarterly reports on consolidated financial
statements from the institutions operating at home submitted by the leading reporting bank, of which, the financial statements from
the overseas branches and subordinate institutions of a solely foreign-funded bank or joint-stock bank and the consolidated financial
statements of a group company shall be reported with written documents by year.

Article 14

The supervisory bureaus of consolidated financial statements shall see to it that the leading reporting banks file for a timely record
of the following matters:

1.

The annual report already publicized and the information disclosure of the business branches operating at home for the fiscal year.

2.

The rating by external rating institutions.

3.

The major news released by the parent bank.

4.

The documents specifying the events under investigation.

5.

Appraisal of the supervision bureau of the home country or region and major supervision measures.

6.

The statement on major adjustment of policies in respect of finance and economy of the home country or region. And

7.

Other relevant documents as prescribed in the Detailed Rules for the Implementation of the Regulations of the People’s Republic of
China on the Administration of Foreign-funded Financial Institutions

Article 15

The consolidated financial statement supervision bureaus shall require the leading reporting bank to submit one copy of the Summary
Report of the Business Conditions of Foreign Funded Banks half a year, which shall include basic information (the number of operative
institutions, number of employees, alteration of the business scope, etc.), the specification on centralization of loan granting,
analysis on reserves for losses of loans, the transfer of large amount of assets, analysis on flowing in or out of capitals, connected
transaction, listing of overseas loans or investment, and the trends in operation of the business branches, and other contents. There
are also statements on alteration of the structure, business strategies, level of capital adequacy, financial status and market credit
standing of the parent banks.

Article 16

The consolidated financial statement supervision bureaus shall be responsible for monitoring the indicators for eligible supervision
over the examination through consolidated financial statement on a quarterly basis, and make analysis on the trend of risk supervision
indicators and overall business behaviors.

Article 17

The consolidated financial statement supervision bureaus shall collect the business management systems of foreign-funded banks, and
communicate with the leading reporting bank or senior management personnel of regional management departments on contents of risk
management of foreign-funded banks such as the pattern of management, management information system, risk and authorization management,
compliance management, credit management and financial management, etc..

Article 18

The consolidated financial statement supervision bureaus shall submit the following matters concerned to the CBRC according to relevant
provisions:

1.

The major events concerned and various management systems that have been put on records by foreign-funded banks.

2.

The errors in the reports of the data about consolidated financial statements.

3.

The regulation violation and abnormal alteration of the indexes for examination through consolidated financial statement. And

4.

Attitude toward supervision over consolidated financial statements.

Article 19

The consolidated financial statement supervision bureaus shall, on the basis of comprehensive analysis of various supervision information
and on-the-spot examination, complete the half-year and annual supervision reports on consolidated financial statements

Article 20

The CBRC shall be responsible for communicating with the supervision authorities of the home country or region of the foreign-funded
corporate institutions and the supervision authorities of the home country or region of a foreign bank on issues of supervision they
commonly concern, and carry out cooperation on supervision information exchange.

Article 21

The CBRC shall be responsible for promoting the exchange and share of the comprehensive supervision information within their organs,
and provide or disclose the business conditions of the foreign-funded banks within China.

Article 22

The CBRC shall be responsible for unifying the procedures and requirements for the supervision over the consolidation of financial
statements.

Chapter IV On-the-spot Examination

Article 23

The CBRC shall be responsible for organizing, guiding and coordinating the on-the-spot examination of consolidated financial statements
at foreign-funded banks.

Article 24

There shall be two ways for organizing on-the-spot examination through consolidated financial statements:

1.

Entrusting the consolidated financial statement supervision bureaus and the territorial supervision bureaus to assign examination
groups, and carrying out on-the-spot examination through consolidated financial statements respectively according to examination
plans. And

2.

The CBRC shall organize the supervisors of foreign-funded banks to form an examination group to carry out on-the-spot examination
through consolidated financial statement on the consolidated financial statement institutions.

Article 25

The CBRC shall, according to the conditions of risk supervision and periods of on-the-spot examination, determine plans of on-the-spot
examination of consolidated financial statement at foreign-funded banks, and put forward guiding requirements for the form, contents
and emphasis of the examination.

Article 26

The CBRC shall adjust the contents of consolidated financial statement for on-the-spot examination in light of realities, and coordinate
the time and progress of the examination items. In case the examination group finds any major problem in the examination, it shall
report to the CBRC in time.

Article 27

The CBRC shall uniformly formulate plans of consolidated financial statement for on-the-spot examination organized by it. The examination
group shall carry out on-the-spot examination in light of the procedures and requirements as prescribed in the examination handbook
and plan, and complete the examination task within the prescribed time limit.

After ending the on-the-spot task, the examination group shall finish the “Examination Facts and Appraisal” and relevant ratings of
CAMELs/ROCA, and make a final confirmation on the facts concerned with the senior management of the examined institution. After the
end of the examination, the examination team shall transfer the “Examination Facts and Appraisal” and the result of the grading of
CAMELs/ROCA and the examination files to the agency of the CBRC at their locality.

Upon completion of all the examination plans, the examination group shall collect the report of consolidated financial statement for
on-the-spot examination, and report it to the CBRC together with the “Examination Facts and Appraisal” and the ratings of a single
institution.

Article 28

The supervision opinions on consolidated financial statement for on-the-spot examination shall be coordinated uniformly by the CSRC,
who shall then propose suggestions according to the “Examination Facts and Appraisal” and reflect to the corresponding agencies of
the CBRC.

Article 29

The agencies of the CBRC shall be responsible for following up and handling the consolidated financial statement for on-the-spot examination.

The agencies of the CBRC shall, according to the “Examination Facts and Appraisal” and the suggestions of the CBRC, issue opinions
on the consolidated financial statement for on-the-spot examination to the institutions at their locality, require them to rectify
and correct, and impose punishment on acts in violation of regulations according to relevant provisions.

The agencies of the CBRC shall, within 3 months after the on-the-spot examination through consolidated financial statement, follow
up the implementation of the measures for rectification, or make follow-up on-the-spot examination on the consolidated financial
statement institutions at their locality, and report the rectification and correction to CBRC in time.

Article 30

The CBRC shall be responsible for accepting the application of the supervision bureau of the home country or region of a foreign bank
for the transnational on-the-spot examination, and entrust the local agencies of the CBRC and the examination team to exchange opinions
on the supervision over the examined institution.

After the end of the contact, the agencies of the CBRC shall report the information they have acquired to the CBRC in time, and follow
up the issues referred to by the examination team.

Chapter V External Audit and Three Party Talks

Article 31

Where a foreign-funded bank conforms to the conditions for consolidated financial statement supervision, it shall engage the same
accountant office in principle to be responsible for auditing and consolidated financial statement auditing on domestic business
branches and affiliated institutions.

Article 32

The leading reporting bank shall, one month before the end of the fiscal year, put on records the external auditors and auditing group
they engage in the current fiscal year at the consolidated financial statement supervision bureau, and send a copy to the corresponding
territorial supervision bureau at the same time. In case of changing accountant office, the leading reporting bank shall also submit
statement in writing.

In case the agencies of the CBRC have negative opinions on auditing quality made by the external auditors, who are engaged by the
foreign-funded banks, they may make a suggestion to the foreign-funded banks and ask it to change the auditing team or accountant
office within 14 working days after receiving the letter of recording.

Article 33

The external auditors shall communicate with the consolidated financial statement supervision bureau on the auditing requirements
before conducting the consolidated financial statement auditing.

Article 34

The leading reporting banks shall, within 5 months after the end of the fiscal year, report the “Auditing Report for Consolidated
Financial Statement” and the “Letter of Suggestion on Management through Consolidated Financial Statement” to the consolidated financial
statement supervision bureaus.

Article 35

The territorial supervision bureaus shall, within 30 days after receiving the External Auditing Report and the Letter of Suggestion
on Management, reflect the opinions of appraisal on quality of external auditing to the consolidated financial statement supervision
bureau.

The consolidated financial statement supervision bureaus shall be responsible for making comprehensive appraisal on quality of external
auditing through combination of the feedback opinions of each territorial supervision bureau, and issues reflected in the Auditing
Report for Consolidated Financial Statement and the Letter of Suggestion on Management through Consolidated Financial Statement.

Article 36

The consolidated financial statement supervision bureaus shall, on the basis of comprehensive supervision of foreign-funded banks,
be responsible for proposing plans for three -party talks.

The three-party talks on consolidated financial statement shall be organized by the CBRC, and the participating parties shall include
the CBRC, the consolidated financial statement supervision bureau, the territorial supervision bureau, external auditors and the
leading reporting banks. After the end of the talks, the consolidated financial statement supervision bureaus shall complete the
summary of three parties meeting for the consolidated financial statement, and supervise over the leading reporting bank for its
timely feedback of the implementation of the opinions for rectification and correction.

Chapter VI Supplementary Provisions

Article 37

The present Measures shall be interpreted by the CBRC.

Article 38

The relevant opinions on consolidated financial statement in conducting supervision shall be considered as the basis for examination
of such applications as the establishment of additional institutions of a foreign-funded bank and business access, etc..

Article 39

The present Measures shall come into force as of April 1, 2004. Where other relevant provisions concerning the supervision over consolidated
financial statement at foreign-funded banks conflict with the present Measures, the former will be invalidated simultaneously.



 
China Banking Regulatory Commission
2004-03-08

 






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...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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