CIRCULAR ON AMENDING RELEVANT PROVISIONS CONCERNING SETTLEMENT ACCOUNTS OF ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Foreign Exchange

Circular on Amending Relevant Provisions Concerning Settlement Accounts of Enterprises with Foreign Investment

Huifa [1999] No.269

August 23, 1999

To further improve the environment for enterprises with foreign investment and make sure the sound and efficient use of their foreign
exchange funds, Category 2 of Paragraph 1 in Article 4 of document (Huifa [1999] No.10), “Circular on Relevant Issues Concerning
Improving Foreign Exchange Administration of Capital Account”, is amended as follows.

1.

Funds in settlement accounts of enterprises with foreign investment can be converted to time deposits, but transfer between different
banks is not permitted.

2.

Time deposits are subject to the restriction on balance ceiling of settlement accounts and shall not invade regulations on foreign
exchange payment under Capital Account.

3.

To transfer funds in settlement accounts to banks other than the opening banks for RMB loans with foreign exchange in pledge, the
opening banks of settlement accounts should subtract the balance ceiling of the settlement accounts by an amount equivalent to the
pledged foreign exchange and should not restore the balance ceiling of the former settlement accounts until the pledged foreign exchange
is transferred back.

This Circular enters into force as of its promulgation. Category 2 of Paragraph 1 in Article 4 of Document (Huifa [1999] No.10) is
nullified simultaneously.