Laws of the People's Republic of China

Circular of the State Administration of Foreign Exchange Concerning Relevant Issues on Making up the Registration of Foreign Debts and Foreign Sureties

HuiZiHan [1999] No.77 September 7, 1999

All branch of State Administration of Foreign Exchange,foreign exchange department of Beijing and Chongqing, sub-branch of Dalian, Qingdao, Ningbo, Xiamen, Shenzhen:

Since 1999 when the national working conference on the administration of foreign exchange for capital projects was held, we have received in succession requests of the branches for instructions on making up the registration of foreign debts and foreign sureties. For the purpose of standardizing the registration of foreign debts and foreign sureties, the auditing of repayments of principal and interests and the administration of transferring funds, the following advice for the makeup registration of foreign debts and foreign sureties are hereby issued to you for implementation.

I.

Scope of makeup registration

The makeup registration to be made by the branches shall be limited to the loan of the borrower that has been approved by the competent foreign exchange administration or that need not to be approved, but failed to be registered according to relevant provisions after the loan agreement has been concluded.

The makeup registration of foreign sureties to be made by the branches shall be limited to those that sureties which have been approved by the competent foreign exchange administration or that need not to be approved, but failed to be registered after the surety agreement has been concluded.

II.

Principles for makeup registration

1.

The principle of territory shall be applicable to the makeup registration of foreign debts and foreign sureties. The foreign exchange administration with jurisdiction shall, after giving punishment to the borrower or warrantor in accordance with the seriousness of the violation, make up the registration, and the amount subject to makeup registration shall be limited to the balance of the debts or sureties that have been verified.

2.

For the makeup registration of middle- and long-term foreign debts arising from the margin between the total investment and the registered capital of the foreign-funded enterprises, the enterprise shall first go through the procedures of increasing its registered capital within a certain time limit, otherwise, only the portion that is conformity with the relevant provisions shall be registered, while makeup registration shall not be applicable to other portions, and the repayment of principal and interests shall not be verified.

3.

Where the registered capital of any enterprise with foreign investment is not fully paid in accordance with the contractual provisions and the foreign business person applies for makeup registration of foreign debts, it shall be demanded to make up the registered capital first, otherwise, the foreign exchange administration may refuse to make up the registration and refuse to verify the repayment of principal and interests.

4.

The foreign exchange administrations shall give serious punishments to those enterprises that have a number of violation records and demand them to make rectifications within a certain time limit.

III.

All the branches shall report to the SAFE each month each makeup registration of foreign debts and foreign sureties (the format and content for putting on records shall be filled in according to tables 8 and 9 of the series of tables on the statistical supervision of foreign exchange in capital items).

IV.

If a loan shall be subject to the approval of the competent foreign exchange administration and the borrower fails to obtain the approval before the conclusion of the agreement and fails further to make up the registration in accordance with the relevant provisions after the conclusion of the agreement, or if a surety of the warrantor shall be subject to the approval of the competent foreign exchange administration before concluding the agreement and still fails to make up the registration after the conclusion of the agreement, the makeup registration thereof shall be reported to the SAFE for instructions.