Laws of the People's Republic of China

State Administration of Foreign Exchange

Circular of State Administration of Foreign Exchange on Relevant Procedure Issues related to Implementation of Administrative License of Foreign Exchange Control

Hui Fa [2004] No. 68

July 5, 2004

In accordance with the stipulations in the Administrative License Law, aiming to perform well the administration work on foreign exchanges control and administrate licensing by the law, relevant issues are hereby notified as follows.

I.

Publicity

All the branches and sub-branches (hereinafter referred to as the Foreign Exchange Bureau)under the State Administration of Foreign Exchanges (the SAFE)Foreign Exchange Bureau shall make all the current licensing items under its jurisdiction public, including titles, necessary application materials, the handling procedures, the time limit to handle. The publicity shall be put noticeably at the offices for an easy access to the applicants.

II.

Handling

The Foreign Exchange Bureau shall check carefully and handle, according to the law, the application for administrative licensing presented by the applicants. If it is under the bureau's jurisdiction, conforms to the required form, and complete materials are provided, the application shall be handled, and the Circular on Handling the Application for the Administrative Licensing by the SAFE ¡Á¡Á Branch (sub-branch) shall be presented (See Attachment 1). And for the application that a license decision can be made and issued on the spot, the notice of acceptance of application for administrative license can be omitted; but if the applicants require it, the Foreign Exchange Bureau shall issue the notice. For the application whose application materials are not complete or fail to conform to the required form, if possible, all the needed materials to be supplemented or corrected shall be noticed to the applicants on the spot; if not, the Foreign Exchange Bureau shall inform the applicant of the whole contents that shall be supplemented or corrected once for all within five days.If the Foreign Exchange Bureau rejects the application for administrative licensing, the Circular of the Foreign Exchange Bureau¡Á¡Á Branch (sub-branch) on Rejecting the Application for the Administrative Licensing shall be presented (See Attachment 2).

III.

Examination and Decision

1.

The Foreign Exchange Bureau shall, after accepting the application for administrative licensing, examine application materials. The administrative licensing shall be made on the spot if the application material is complete and verifiable and conforms to the required form, and the Foreign Exchange Bureau can make the decision on the spot. If the Bureau can not make a decision on the spot, the administrative licensing shall be made within the term stipulated in the Article 4 of this Circular.

2.

The decision to approve the application for administrative licensing or not to approve shall be made in written form. For such administrative license items as the import units' handling the verification and writing-off of paying the foreign exchanges and the registration and archival-filing of their paying foreign exchanges, as the export units' drawing the verification and writing-off instrument of the export proceeds in foreign exchanges, handling the registration on verification and writing-off of the export proceeds in foreign exchanges and on the long-term export proceeds in foreign exchanges, making up the special page of verification and writing-off of the export proceeds in foreign exchanges and the tax refund special page of verification and writing-off instrument of the export proceeds in foreign exchanges, and making up refund and compensation in foreign exchange under export, as the forex registration, alteration and cancellation of registration gone through by the organizations in the special economic regions, as well as foreign exchange registration of overseas investment, the Foreign Exchange Bureau shall, after awarding the applicant the corresponding business license or affixing their seals of the Foreign Exchange Bureau on the corresponding business license. not release decisions in written form alone.

If the Foreign Exchange Bureau reject the application for administrative licensing, reasons shall be given in decisions of written form, and the Foreign Exchange Bureau shall inform the applicant that he enjoy the right to apply administrative reconsideration to the Foreign Exchange Bureau at a next higher level

3.

The written form of the administrative licensing decision made by the Foreign Exchange Bureau shall conform to the rules on important vouchers specified in the Circular of the Foreign Exchange Bureau on Printing and Distributing the Guidelines on Regulating the Important Vouchers, Examination and Approval and Verification, and Archival-filing Administration in Foreign Exchanges Business (Hui Fa [2004] No.1 ). Where the Circular fails to stipulate the formula and contents or the stipulated formula and contents have been altered by the Foreign Exchange Bureau, the written form of such decision shall conform to the formula specified by the Foreign Exchange Bureau.

4.

Where, during the checking of the application for the administrative licensing, the Foreign Exchange Bureau finds that the administrative licensing directly involves the major interest relationship between the applicant and others, the Foreign Exchange Bureau shall inform the applicant and the interested parties and solicit their opinions.

IV.

Time Limit

1.

Where a decision on the administrative license can not be made on spot, the foreign exchange bureau shall make a decision within 20 working days from the day when it accepts such an application. If it can not make a decision within 20 working days, it may extend for 10 working days upon the approval of the person in charge of this bureau, and shall give explanations about the extension to the applicant in written form before the expiration of 20 working days.

2.

For an administrative license that is subject to the examination of a lower foreign exchange bureau before it is reported and submitted to an upper foreign exchange bureau, the subordinate bureau shall complete the examination within 20 working days from the day when the application for administrative license is accepted. The upper bureau shall, within 20 working days from the day when the report is submitted by the lower bureau, complete the examination and make a decision on the administrative license. and

3.

If the time limit of administrative license is otherwise provided for in any law and regulation, such provisions shall prevail.

V.

Hearing

1.

For a hearing as provided for the implementation of administrative license in laws, regulations or rules on the foreign exchange control, or for any other licensing matters of great importance to the public interests that the foreign exchange bureau considers it necessary to hold a hearing, the foreign exchange bureau shall hold a hearing in the process of making a decision.

2.

When an administrative license of foreign exchange control is of direct significance to the interests of the applicant or others, before the foreign exchange bureau makes a decision about the administration, it shall inform the applicant or the interested party of the right to request for a hearing. Where the applicant or interested party applies for a hearing with 5 working days from the day when it is informed of such a right, the foreign exchange bureau shall organize a hearing within 20 working days. and

3.

As the applicant or interested party, a non-domestic natural person or organization shall take the interpreter by himself when attending a hearing organized by foreign exchange bureau.

VI.

Modification

Where an applicant applies for modifying the matters under administrative license, the foreign exchange bureau shall, in accordance with this Circular, handle the procedure again in the term of reapplying for administrative license.

VII.

Supervision and Check

The foreign exchange shall establish and perfect the supervision system, shall perform the supervisory duties by means of carrying on regular or irregular inspections on the administrative license made by this bureau or the subordinate bureau, of checking , whether on spot or not, on the reporting form, date and other relevant materials reflecting the information about the licensee's activities under the administrative license.

When conducting supervision and inspection over a licensee's activities under the administrative license, the foreign exchange shall note down the information about the supervision and inspection and the handling result, in order to satisfy the consultation from the public and inspection from the upper bureau.

VIII.

When implementing an administrative license, the foreign exchange bureau shall prove, explain and offer accurate information upon the applicant's requests on matters under administrative license, provisions, requirements on material, procedure, reasons for the decision etc.

IX.

When implementing an administrative license, offering a format for written application and organizing hearing, the foreign bureau shall not charge anything for that.

X.

Where the regulation on the administrative license of foreign exchange control is of ambiguity or not provided for here in this Circular, relevant provisions in Administrative License Law of People's Republic of China and Hui Fa [2004] No. 1 shall be applied to.

XI.

This Circular shall go into effect as of July 1, 2004. The Circular on acceptance and examination and verification of application and the Circular on non-acceptance and examination and verification of application, both provided for in Hui Fa [2004] No.1 , shall be invalidated automatically.

This Circular, when received by subordinate bureaus, shall be distributed timely to branch offices within their jurisdictions, and the relevant information shall be publicized in accordance with the provisions. Provisions in this Circular, after being studied conscientiously, shall be carried out by each branch office, which shall administer in accordance with the laws and regulations. Any problem arising in the implementation of this Circular shall be reported to the Department of Comprehensive Affairs of the SAFE in time.