Laws of the People's Republic of China

    Article 1  These Provisions are formulated to enable the precise and
complete collection of up-to-date information on the country's external debt
so as to control the size of external borrowing effectively, raise the
efficacy of using foreign funds and promote national economic development.

    Article 2  The State institutes the policy of managing external debts by
registration.

    The State Administration of Foreign Exchange Control is in charge of
establishing and perfecting the system of statistics on and supervision over
the external debts of the country and publishing figures of the external
debts.

    Article 3  External debts mentioned in these Provisions refer to all the
debts which are guaranteed by repayment contracts in foreign currency and are
borrowed from international financial institutions, foreign governments,
financial institutions, enterprises or other institutions located outside
the People's Republic of China by enterprises, organizations, government
establishments, financial institutions or other institutions (hereinafter
referred to as borrowing units) in the People's Republic of China. They
include the following:

    (1) International financial institutions loans.

    (2) Foreign government loans.

    (3) Foreign bank and financial institutions loans.

    (4) Buyer's credits.

    (5) Foreign enterprise loans.

    (6) Securities issued in foreign currency.

    (7) International financial leases.

    (8) Deferred payments.

    (9) Debts repaid directly in foreign cash in compensation trade.

    (10) External debts in other forms.

    Funds borrowed in foreign currency by borrowing units from banks with
foreign capital or Chinese and foreign joint banks which are registered in
China are regarded as external debts.

    Funds borrowed in foreign currency from abroad by banks with foreign
capital or Chinese and foreign joint banks which are registered in China
are not regarded as external debts.

    Article 4  The registration of external debts shall take two forms;
case-by-case registration and periodic registration.

    The Registration Certificate for External Debts shall be prepared and
issued by the State Administration of Foreign Exchange Control.

    Article 5  Chinese-foreign Equity joint ventures, Chinese-foreign
contractual joint ventures and foreign-capital enterprises are required,
while borrowing from abroad, to register at and obtain a case-by-case
Registration Certificate for External Debt from a local administrative department of foreign exchange control by submitting a duplicate of the
loan contract to the department within 15 days after formally concluding the
contract.

    With regard to international financial institution loans, foreign
government loans, external borrowing by the Bank of China or other authorized
banks and financial institutions, the borrowing units concerned are required
to register at and obtain a periodic Registration Certificate for External
Debt from a local administrative department of foreign exchange control.
Indirect lending shall not be included in the registration mentioned above
in this paragraph.

    Apart from the borrowing units mentioned above in this Article, other
borrowing units are required to register at and obtain a case-by-case
Registration Certificate for External Debts from a local administrative
department of foreign exchange control by submitting an approval certificate
for external borrowing and a duplicate of the loan contract to the department
within 15 days after the formal conclusion of the contract.

    Article 6  A borrowing unit is required, while transferring its external
loan from a foreign country, to open a special foreign exchange cash account
for external debt with the Bank of China or other banks authorized by the
State Administration of Foreign Exchange Control and (hereinafter referred
to as banks) against the Registration Certificate for External Debt.
Borrowing units with approval to keep their external loans abroad and others
whose loans do not have to be transferred into China are required to present
their Registration Certificate for External Debt while opening special
foreign exchange cash accounts for external debts to cover repayment and
servicing.

    Banks shall not open special foreign exchange cash accounts for external
debts or special foreign exchange accounts for external debt repayment and
servicing for borrowing units that have not obtained Registration Certificates
for External Debt in accordance with the provisions, and the principals and
interests of these units are not allowed to be remitted abroad.

    Article 7  When borrowing units making case-by-case registration repay
and service their external debts, banks shall, on the strength of the
Registration Certificate for External Debt and the approval certificate from
the relevant departments of foreign exchange control provided by the borrowing
units, conduct receipt and payment operations through the special foreign
exchange cash account for external debt or the special foreign exchange cash
account for external debt repayment and servicing. The borrowing units are
required to fill in, in accordance with the certificates of receipt and
payment issued by the banks, a Feedback Form on External Debt Changes with
items of receipt and payment and submit a duplicate of the Form to the
departments of foreign exchange control which issued the Registration
Certificate for External Debt.

    The borrowing units making periodic registration are required to submit
monthly information concerning conclusion of contracts, withdrawal, usage
and repayment and servicing of external debts to the departments of foreign
exchange control which issued the Registration Certificates for External Debt.

    Borrowing units with approval to keep their loans abroad are required
to submit periodically information covering changes in their deposits to the
departments of foreign exchange control that gave the approval.

    Article 8  Once borrowing units fully clear their external debts as
recorded in the Registration Certificate for External Debt, the banks
concerned shall cancel the special foreign exchange cash accounts for external
debt or the special foreign exchange cash accounts for external debt
repayment and servicing of such borrowing units. The units, in turn, are required to submit to the local departments of foreign exchange control the
Registration Certificates for External Debt for cancellation within 15 days.

    Article 9  The local departments of foreign exchange control may impose,
according to the circumstances, a fine not exceeding 3 percent of the external
debt involved on a unit that violates these Provisions in any of the
following ways:

    (1) purposely not registering or delaying registration for external debt;

    (2) refusing to submit, concealing, fraudulently submitting or, without
special reasons, repeatedly delaying to submit the Feedback Form on External
Debt Changes to the department of foreign exchange control concerned;

    (3) forging or altering the Registration Certificate for External Debt;

    (4) opening or keeping special foreign exchange accounts for external
debt or special foreign exchange cash accounts for external debt repayment
and servicing without approval.

    Where the party concerned disagrees with the penalty decision, it may
appeal to the department of foreign exchange control at the higher level.

    Article 10  The authority to interpret these Provisions resides in the
State Administration of Foreign Exchange Control.

    Article 11  These Provisions shall enter into force as of the date of
promulgation.

    For those borrowing units which have uncleared external debts at the time
of the promulgation of these Provisions, they are required to register at
local departments of foreign exchange control within 30 days of the
promulgation of these Provisions.