The People’s Bank of China Circular of the People’s Bank of China on Issuing the Regulation on Administration of Domestic Foreign Exchange Account YinFa [1997] No.416 October 7, 1997 Branch of the People’s Bank of China (hereinafter “PBC”) in each province, autonomous region, municipality directly under the Central In order to standardize the opening and use of domestic foreign exchange account and strengthen administration on foreign exchange Regulation on Administration of Domestic Foreign Exchange Account Chapter I General Provisions Article 1 In accordance with the Regulation of Foreign Exchange Administration of People’s Republic of China and the Regulation on the Administration Article 2 The State Administration of Foreign Exchange and its branches and sub-branches (hereinafter as “SAFE” in brief) shall exercise supervision Article 3 Domestic entities, foreign establishments, individuals and foreign nationals in China shall abide by this regulation in opening, use Article 4 The terms referred to in this regulation are interpreted below: 1. Financial institutions of deposit refers to banks and non-bank financial institutions having a foreign exchange business license. 2. Foreign exchange account refers to the account of domestic entities, foreign establishments, individuals and foreign nationals Article 5 Domestic entities and foreign establishments shall not open foreign currency cash account in general case. Individuals and foreign Chapter II Foreign Exchange Account for Current Account Transaction and its Opening and Use Article 6 Foreign exchange for current account transactions listed below may be held in a foreign exchange account: (1) Come-and-go foreign exchange occurred during project construction by domestic entities in operation of oversea contract construction (2) Foreign exchange paid and received by domestic entities involved in agent businesses or oversea businesses on behalf of others; (3) Foreign exchange received by domestic entities to be paid or settled in a short time, including bid security remitted from oversea, (4) Come-and-go foreign exchange of ocean shipping companies in international ocean transportation business approved by Ministry of Transportation, (5) Foreign exchange insurance fees received by insurance institutions to be reinsured overseas or not yet settled; (6) Foreign exchange to be paid overseas for donation, assistance or aid as required by agreement; (7) Foreign exchange proceeds of duty-free companies from duty-free goods business; (8) Project funds of enterprises with export-import license in business of export of jumbo electronic equipment with total project funds (9) Foreign exchange within a holding ratio verified by SAFE that is received by international travel agencies and prepaid by foreign (10) Current account foreign exchange of enterprises with foreign investment within a balance ceiling verified by SAFE; (11) Foreign exchange used by domestic entities for repayment of principal and payment of interest of domestic or external foreign exchange (12) Foreign exchange expenses of foreign establishments remitted from abroad; (13) Foreign exchange proceeds of individuals and foreign nationals in China from current account transactions; (14) Other foreign exchange of domestic entities under current account as approved by SAFE. Article 7 Foreign exchange accounts of domestic entities, opened according to the Article 6 (1)-(10) and (14) of this regulation, shall be used Article 8 Foreign exchange accounts of foreign establishments, opened according to the Article 6 (12) of this regulation, shall be used for Article 9 Individuals and foreign nationals in China shall open an foreign exchange account or a foreign currency note deposit account according Article 10 Domestic entities shall apply to SAFE for opening a foreign exchange account for current account transactions. Article 11 Domestic entities (enterprises with foreign investment are excluded) shall submit the following materials when apply to SAFE for opening (1) an application report for opening a foreign exchange account; (2) business license issued by industrial and commercial administrative department or association registration certificate issued by (3) approval documents on businesses issued by State Council’s authorized agencies; (4) a contract, an agreement or other relevant materials required by SAFE. Chinese-funded financial institutions shall make a clear indication of the account number, currency and date of opening and put a Article 12 Enterprises with foreign investment shall apply to SAFE for opening a current account foreign exchange account with an application Article 13 When domestic entities apply for opening a foreign exchange account, SAFE shall specify the receipts and payments scope, operating Article 14 Foreign establishments shall apply for a foreign exchange account record form of foreign establishments (attachment 3) with approval Article 15 Individuals and foreign nationals in China have freedom in deposit and withdrawal of foreign currency. In case of deposit and withdrawal Article 16 Domestic entities and foreign establishments, which maintain a foreign exchange account for current account transaction, shall make Article 17 Enterprises with foreign investment shall enter its foreign exchange proceeds from current account transactions into its foreign exchange Deposit financial institution shall advice enterprise with foreign investment in 5 working days to surrender or sell foreign exchange SAFE shall adjust the principle for rectification of balance ceiling of foreign exchange current account according to enterprises Article 18 Other domestic entities shall surrender foreign exchange in the foreign exchange account in a manner specified in the foreign exchange Article 19 Deposit financial institutions shall formulate a unified rule for management of foreign exchange L/C deposit account, submit it to Foreign exchange L/C deposit account shall not be used for any other purpose. Chapter III Foreign Exchange Account for Capital Account Transactions and its Opening and Use Article 20 Foreign exchange from capital account transactions listed below may be kept in a foreign exchange account: (1) External debt and indirect external debt borrowed by domestic entities and foreign exchange loans of domestic Chinese-funded financial (2) Foreign exchange of domestic entities for repayment of principal of domestic and external foreign exchange liabilities; (3) Foreign exchange of domestic entities from stock issuance; (4) Capital paid in foreign exchange by Chinese investors of enterprises with foreign investment; (5) Foreign exchange remitted by oversea legal entities or individuals for establishing an enterprises with foreign investment; (6) Foreign exchange of domestic entities from realization of asset stock; (7) Foreign exchange of oversea legal entities or individuals from buying or selling B-share stock; (8) Foreign exchange from other capital account transactions approved by SAFE. Article 21 Special accounts for loans opened, according to Article 20 (1) of this regulation, shall be credited with funds under external debt, Article 22 Special accounts for serving loans, opened according to Article 6 (11) and Article 20 (2), shall be credited with foreign exchange Article 23 Special foreign exchange stock accounts, opened according to Article 20 (3) of this regulation, shall be credited with foreign exchange Article 24 Foreign exchange capital account of enterprises with foreign investment, opened according to Article 20 (4) of this regulation, shall Article 25 Special transient account opened according to Article 20 (5) of this regulation, shall be credited with foreign exchange remitted Article 26 Foreign exchange accounts, opened according to Article 20 (6) of this regulation, shall be credited with foreign exchange proceeds Article 27 Foreign exchange accounts, opened according to Article 20 (7), shall be credited of foreign exchange proceeds of oversea legal entities Article 28 Entities shall apply to SAFE for opening a foreign exchange account for capital account transactions with an application report on (1) With respect to domestic entities opening a special account for loans and a special account for loans repayment, a reserved copy (2) With respect to domestic entities apply for opening a special stock account, documents such as prospectus approved by security administrative (3) With respect to enterprises with foreign investment applying for opening a capital account, a foreign exchange registration certificate (4) With respect to oversea legal entities or individuals applying for opening a transient account, a remittance advice and an investment (5) With respect to domestic entities applying for opening a foreign exchange account according to Article 20 (6) of this regulation, Article 29 With respect to opening a B-share account, oversea legal entities or individuals shall open account a security company upon presentation Article 30 When domestic entities apply for opening a foreign exchange account for capital account transactions, SAFE shall verify the receipts Article 31 After opening a foreign exchange account for capital account transactions for an enterprise with foreign investment, deposit financial Article 32 Domestic entities may use the funds in a special loans account for expenditures specified in loans agreement without SAFE’s approval.The Article 33 Domestic entities shall apply for principal repayments and payments of interest and other charges from the special foreign exchange Article 34 Domestic entities shall present a foreign exchange (indirect) loans registration certificate, an advice of principal repayment and Article 35 Domestic entities converting funds in foreign exchange account for capital account transactions are subject to SAFE’s approval; the Chapter IV Supervision of Foreign Exchange Account Article 36 Domestic entities and foreign establishments in China shall apply to the local SAFE where its is registered for opening an account. (1) Enterprises with foreign investment shall apply to the local SAFE where it is registered, and submit a record file to the local SAFE (2) Other domestic entities opening a foreign exchange account for current account transactions according to this regulation, shall apply (3) Other domestic entities opening a foreign exchange account for capital account transactions according to this regulation shall submit (4) Foreign establishments shall apply to both the local SAFE where it is registered and the local SAFE where account is opened for a Article 37 In case of making a change in contents related to a foreign exchange account in a foreign exchange account utilization certificate, Article 38 In demand of close of a foreign exchange account, domestic entities and foreign establishments shall submit to SAFE a proof document Article 39 SAFE shall exercise annual inspection on foreign exchange account of domestic entities and foreign establishments. Article 40 Deposit financial institutions shall report statistics on changes in foreign exchange account to the local SAFE as required. Article 41 With respect to a foreign exchange account to be withdrawn, SAFE shall send an advice of withdrawal of the foreign exchange account Article 42 Domestic entities and foreign establishments shall apply for and make account opening according to this regulation, and shall use Article 43 Deposit financial institutions shall open, close or make receipts and payments through a foreign exchange account for domestic entities, Article 44 In case of domestic entities, foreign establishments, individuals and foreign nationals in China in violation of the following regulations (1) Open a foreign exchange account in the territory of China without authorization; (2) Lend, cross-use or transfer a foreign exchange account; (3) Change the utilization scope of a foreign exchange account without authorization; (4) Use a foreign exchange account beyond the balance ceiling and operating period rectified by SAFE; (5) Violate other regulations on foreign exchange account administration. Article 45 In case a deposit financial institutions opens a foreign exchange account for domestic entities, foreign establishments, individuals Chapter V Supplementary Provisions Article 46 Noncorporator economic organizations with foreign investment, having a business license in China, shall abide by regulations on enterprises Article 47 Cases under the following circumstances are not subject to this regulation: (1) Vostro foreign exchange accounts of financial institutions; (2) Foreign exchange accounts of foreign embassies, consulate, and resident representative offices of international organizations maintained Article 48 The SAFE is responsible for the interpretation of this regulation. Article 49 This regulation shall come into force as of October 15, 1997. The Provisional Rule of Foreign Exchange Account Administration promulgated Attachment 1:Approval Note of SAFE on Opening Foreign Exchange Account(omitted) Attachment 2:Foreign Exchange Account Utilization Certificate(omitted) Attachment 3:Foreign Exchange Account Record Form of Foreign Establishments(omitted) |
The People’s Bank of China
1997-10-07