Laws of the People's Republic of China

The State Administration of Foreign Exchange

Announcement of the State Administration of Foreign Exchange

[2003] No.1

April 15, 2003

According to the Decisions of the State Council on Canceling the First Batch of Administration Examination and Approval Projects (GuoFa [2002] No.24) and the Decisions of the State Council on Canceling the Second Batch of Administration Examination and Approval Projects and Altering the Administrative Methods for Some Administration Examination and Approval Projects (GuoFa [2003] No.5), the State Administration of Foreign Exchange has cancelled 26 items to be administratively approved. The relative issues after these items are cancelled for administrative approvals are hereby announced as follows:

I.

The "examination and approval of opening, altering and canceling accounts for foreign exchange loans in China" is canceled

The administration on the specific domestic accounts for foreign exchange loans shall be in accordance with Article 4 of the Circular of the State Administration of Foreign Exchange on Reforming the Methods of Administration of Foreign Exchange in Domestic Foreign Exchange Loans (HuiFa [2002] No.125) promulgated by the State Administration of Foreign Exchange on December 6, 2002.

II.

The "examination and approval of opening, altering and canceling accounts for B-share guarantee funds (hereinafter referred to as "B-share transaction settlement fund account") that opened at foreign-invested banks in China by securities companies" is canceled

When securities companies open or alter B-share transaction settlement fund accounts, Article 3 of Circular of the State Administration of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination and Approval of Foreign Exchange Administration of Some Capital Projects (HuiFa [2003] No.50) promulgated by the State Administration of Foreign Exchange on April 1, 2003 shall be implemented.

III.

Four items including "examination and approval of the conditions of Chinese organizations for long-and-medium-term loans in China", "examination and approval of the financial conditions of Chinese organizations for financing and leasing in China", "examination and approval of the time selection and financing conditions for issuing debts abroad" and "examination and approval of the financial conditions for project financing " are canceled

If Chinese organizations (including designated banks of foreign exchange) borrow long-and-medium-term loans, issue long-and-medium-term foreign currency bonds or perform financial leasing and financing, the provisions in Article 1 of the Circular of the State Administration of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination and Approval of Foreign Exchange Administration of Some Capital Projects (HuiFa [2003] No.50) promulgated by the State Administration of Foreign Exchange on April 1, 2003 shall be implemented.

IV.

The "examination and approval of large-amount financing for overseas branches of Sino-capital financial organizations" is canceled

When the overseas branches of Sino-capital financial organization in China raise large amount of funds, the provisions in Article 2 of the Circular of the State Administration of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination and Approval of Foreign Exchange Administration of Some Capital Projects (HuiFa [2003] No.50) promulgated by the State Administration of Foreign Exchange on April 1, 2003 shall be implemented.

V.

The "audit of the foreign exchange risks in overseas investments by domestic organizations" is canceled

According to the provisions in Article 4 of the Circular of the State Administration of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination and Approval of Foreign Exchange Administration of Some Capital Projects (HuiFa [2003] No.50) promulgated by the State Administration of Foreign Exchange on April 1, 2003, the overseas investment risks of domestic organizations shall not be audited and approved by the administrations of foreign exchange, and the auditing procedures on the fund resources of overseas investments will be further simplified. For specific procedures, refer to the Circular of the State Administration of Foreign Exchange on Simplifying the Examination of Foreign Exchange Capital Source of Investment Abroad (HuiFa [2003] No.43).

VI.

The "examination and approval of guarantee funds for transferring back the profits of overseas investments" is canceled

According to the provisions in the Circular of the State Administration of Foreign Exchange on Guarantee Funds for transferring back the profits of overseas investments (HuiFa [2002] No.110) promulgated by the State Administration of Foreign Exchange on November 12, 2002, the State Administration of Foreign Exchange will not collect the guarantee funds for transferring back the profits of overseas investments.

VII.

The "examination and approval of prepayment or incidental charges under boarder trades" is canceled

The prepayment or incidental charges under boarder trades shall be in accordance with the provisions in Article 1 of the Circular of the State Administration of Foreign Exchange on Canceling Administrative Examination and Approval on the Foreign Exchange in Current Accounts (HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April 1, 2003.

VIII.

The "examination and approval of the current account foreign exchange brought or remitted into China by individuals, which one-time payment of foreign currency or changing for Renminbi equivalent of no less than $50,000" is canceled

If individuals need to draw foreign currencies or change them for Renminbi, the provisions in Article 2 of the Circular of the State Administration of Foreign Exchange on Canceling Administrative Examination and Approval on the Foreign Exchange in Current Accounts (HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April 1, 2003 shall be implemented.

IX.

The "examination and approval of foreign exchange used for tax-free commodities and selling the tax-free commodities bought by tax-free stores in RMB due to damages or overstock" is canceled

If the headquarter of the stores selling tax-free commodities in foreign exchange, or sell the commodities in RMB due to damages or overstock, which will be paid abroad, the provisions in Article 3 of the Circular of the State Administration of Foreign Exchange on Canceling Administrative Examination and Approval on the Foreign Exchange in Current Accounts (HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April 1, 2003 shall be implemented.

X.

The "verification of foreign exchange payments for the equipments under foreign-invested projects and foreign-funded equipments and articles" is canceled

According to the Circular of the State Administration of Foreign Exchange and the General Administration of Customs Concerning Sales/Purchases of Foreign Exchange and Verification by Presenting Custom Declaration Certificates for Imported Goods (HuiFa [2003] No.15), the designated banks of foreign exchange or administrations of foreign exchange shall verify the declarations of the import which goods were imported after May 1, 2002 as the "trades that may sell/purchase foreign exchange". After the authentications of the declarations are verified and put records in the Import Declaration Networking Verification System or are disposed for closing the cases, the sales/purchases of foreign exchange and the verification can be performed according to the Administrative Provisions on Settlement, Sale and Purchase of Foreign Exchange, the Interim Measures of Supervising the Verifications on Import Payments in Foreign Exchange and other related provisions.

XI.

Three items including "verification and filing of letters of credit of over 90 days under import items", "verification and filing of collections of over 90 days under import items" and "verification and filing of arrivals of over 90 days under import items (excluding prepayment over proportion or over amount) are canceled

If importers settle the payments in foreign exchange in a mode of "letter of credit of over 90 days, collection of over 90 days and arrival of over 90 days (excluding prepayment over proportion or over amount), it may directly go to the designated banks of foreign exchange for payments in foreign exchange according to the Circular of Further Regulating the Administrative Policies on Import and Export Verification (HuiFa [2002] No.65) promulgated by the State Administration of Foreign Exchange on July 10, 2002, and the designated banks of foreign exchange shall perform verifications according to the administrative provisions on sales/purchases in foreign exchange.

XII.

The "verification of opening, using and altering of foreign exchange accounts by insurance companies" is canceled

The insurance companies with approval for trading foreign exchange may, according to the Circular of the State Administration of Foreign Exchange and China Insurance Supervision and Administration Committee on Promulgation and Implementation of the Interim Provisions on Administration on Foreign Exchange for Insurance Operations (HuiFa [2002] No.95) promulgated by the State Administration of Foreign Exchange and China Insurance Supervision and Administration Committee, open foreign exchange accounts, and shall report it to the local administrations of foreign exchange for record within 10 working days after opening such accounts.

XIII.

The "audit of the counterfoils of verification forms provided by the exporters within 60 days after custom declaration" is canceled

Exporters shall, according to the Circular of Pilots for Networking Verification System for Export Proceeds Using Electronic Law Execution at Ports (HuiFa [2001] No.7) promulgated by the State Administration of Foreign Exchange and General Administration of Customs on January 22, 2001, submit the verification forms used for custom declaration to the local administrations of foreign exchange via the "China Port Electronic System for Export Proceeds in Foreign Exchange".

XIV.

The "verification of re-remittance (to the original remitter by individuals residing in China) of foreign exchange deposits remitted from abroad" is canceled

If individuals re-remit the foreign exchange deposits to the remitters who remit the foreign exchange to the individuals, provisions in Article 4 of the Circular of the State Administration of Foreign Exchange on Canceling Administrative Examination and Approval on the Foreign Exchange in Current Accounts (HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April 1, 2003 shall be implemented. And, the Official Reply Concerning Remittance Abroad of Foreign Exchange Deposits of Individuals residing in China and Alteration of Account Names of Foreign Exchange Accounts (HuiFu [2000] No.291) shall be repealed at the same time.

XV.

The "verification of transfers of foreign exchange within China by insurance companies and their branches" is canceled

For the capital transactions between insurance companies and its branches and between their foreign exchange accounts within the same insurance companies, according to the provisions in the Circular of the State Administration of Foreign Exchange and China Insurance Supervision and Administration Committee on Promulgation and Implementation of the Interim Provisions on Administration on Foreign Exchange for Insurance Operations (HuiFa [2002] No.95) promulgated by the State Administration of Foreign Exchange and China Insurance Supervision and Administration Committee, such transfers may be made within the banks of deposits provided that such transfers shall be in accordance with the payment/proceed scope of the accounts.

XVI.

The "verification on the debtors repaying domestic foreign exchange loans to local banks using their own foreign exchange" is canceled

If debtors repay domestic foreign exchange loans to local banks using their own foreign exchange, the provisions in Article 4 of the Circular of the State Administration of Foreign Exchange on Reforming the Methods of Administration of Foreign Exchange in Domestic Foreign Exchange Loans (HuiFa [2002] No.125) promulgated by the State Administration of Foreign Exchange on December 6, 2002 shall be implemented.

XVII.

The "verification of capital settlements of enterprises with foreign investment" is canceled

The verifications on capital settlements of enterprises with foreign investment shall be in accordance with the Circular of Reforming the Administrative Method of Capital Settlement under Foreign-Investment Items (HuiFa [2002] No.59) promulgated by the State Administration of Foreign Exchange on June 17, 2002 and the Circular of the State Administration of Foreign Exchange on Improving the Administration of Foreign Exchange in Foreign Direct Investments (HuiFa [2003] No.30).

XVIII.

The "registration and verification of the domestic debtors for foreign exchange loans" is canceled

The Sino-capital financial organizations shall, when granting foreign exchange loans within China, implement the provisions of the Circular of the State Administration of Foreign Exchange on Reforming the Methods of Administration of Foreign Exchange in Domestic Foreign Exchange Loans (HuiFa [2002] No.125) promulgated by the State Administration of Foreign Exchange on December 6, 2002.

XIX.

The "verification of annual audits on the foreign exchange proceeds/payments of ocean fishing operations of ocean fisheries" is canceled

According to the Circular of the State Administration of Foreign Exchange on Canceling Administrative Examination and Approval on the Foreign Exchange in Current Accounts (HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April 1, 2003, the following provisions in the Interim Provisions on the Foreign Exchange Proceeds/Payments of Ocean Fishing Operations of Ocean Fisheries (HuiFa [2001] No. 49) promulgated by the State Administration of Foreign Exchange and the Ministry of Agriculture shall be repealed, including: Article 16 - "The administration of foreign exchange shall implement a system of annual audits on the foreign exchange proceeds/payments of ocean fishing operations of ocean fisheries; Article 17 - "All branches of the administrations of foreign exchange shall report the annual audit results as well as the information on sales/purchases of all local ocean fisheries to the State Administration of Foreign Exchange before May 30 each year and make copies for local fishery administrations"; Article 18 - "The State Administration of Foreign Exchange shall inform the Ministry of Agriculture of the national annual audit results as well as the utilization of foreign exchange by the ocean fisheries after the annual audits, and the Ministry of Agriculture shall publicize the annual audit results to all the ocean fishery enterprises to establish a inter-supervision and impeachment among the enterprises".

XX.

The "verification of the over costs paid in foreign exchange out from the accounts of travel agencies for entry tours " is canceled

According to the Circular Concerning Further Regulating the Administrative Policy on the Foreign Exchange Accounts under Current Accounts (HuiFa [2002] No. 87) promulgated by the State Administration of Foreign Exchange on September 9, 2002, the account of a travel agency for entry tours and for abroad tours shall be merged into one current account foreign exchange account. The travel agency may expend directly from the this current account foreign exchange account without need to apply to local administration of foreign exchange for approval.

XXI.

The "verification and approval of the administration of foreign exchange on the purchase of foreign exchange and by domestic foreign exchange debtor and repaying loans at other locations" is canceled

If the debtors repay foreign exchange loans within China, the provisions in Article 5 of the Circular of the State Administration of Foreign Exchange on Reforming the Methods of Administration of Foreign Exchange in Domestic Foreign Exchange Loans (HuiFa [2002] No.125) promulgated by the State Administration of Foreign Exchange on December 6, 2002 shall be implemented.

The specific procedures for the corresponding items after they are canceled for verification and approval have been specified in the laws and regulations promulgated by the State Administration of Foreign Exchange, which can be referred via the governmental website of the State Administration of Foreign Exchange or from the Announcements of the State Administration of Foreign Exchange.