Laws of the People's Republic of China

State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Adjusting Limitation Administrative Measures for Foreign Exchange Current Accounts

Hui Fa [2005] No. 7

February 4, 2005

The branches and the foreign exchange administration departments of the State Administration of Foreign Exchange in all provinces, autonomous regions and municipalities directly under the Central Government, and the branches of the State Administration of Foreign Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo:

For the purpose of further promoting trade facilitation, faithfully satisfying the demands of enterprises for foreign exchanges and lowing the costs of settlements and sales of foreign exchanges for enterprises, the State Administration of Foreign Exchange has decided to adjust limitation administrative measures for foreign exchange current accounts. The relevant matters are hereby notified as follows:

I.

The time limit of the settlement of foreign exchanges exceeding the prescribed amount shall be prolonged from the current 10 working days to 90 days. Where the balance of foreign exchange current accounts of a domestic institution exceeds the verified amount, the exceeding foreign exchange fund may be still deposited in the foreign exchange account for 90 days. In the case of failure to settle foreign exchanges or pay foreign exchanges to the outside within the said 90 days, the financial institution opening account shall handle procedures of settling foreign exchanges of the exceeding foreign exchange fund for the domestic institution within 5 working days after the expiry of the said 90 days, and notify the domestic institution of it.

II.

The scope of enterprises for which the limitations of foreign exchange current accounts are verified based on 100% of the actual foreign exchange incomes shall be enlarged. For those import and export enterprises and production-oriented enterprises that really demand the reserves of foreign exchange incomes in full amount because of the actual operational requirements, each branch may, according to the actual requirements, verify the limitations of those foreign exchange current accounts based on 100% of the actual foreign exchange incomes.

III.

After receiving this Circular, all branches shall seriously make arrangements for doing well this work in adjusting limitations for foreign exchange current accounts of domestic institutions. In case the current administrative policies for foreign exchange current accounts affect the payment of the enterprises to the outside, all branches may solve it according to the actual situations of the enterprises.

IV.

This Circular shall come into force since March 1, 2005. In case any discrepancy exists between any previous relevant provisions and this Circular, the latter shall be implemented.