Laws of the People's Republic of China

PROVISIONAL REGULATIONS FOR FOREIGN EXCHANGE
CONTROL OF THE PEOPLE'S REPUBLIC OF CHINA

(Adopted at the Executive Meeting of the State
Council on December 5, 1980 and Issued by the
State Council on December 18, 1980)

 

SUBJECT: FOREIGN EXCHANGE

ISSUING-DEPT: STATE COUNCIL OF CHINA

ISSUE-DATE: 12/18/1980

IMPLEMENT-DATE: 03/01/1981

LENGTH: 2725 words

TEXT:

CHAPTER I GENERAL PROVISIONS

[Article 1] These Regulations are formulated for the purpose of strengthening foreign exchange control, increasing the country's foreign exchange receipts and economizing on foreign exchange expenditures in order to promote the development of the national economy and safeguard the rights and interests of the country.

All foreign exchange receipts and expenditures, the issuance and circulation of all kinds of foreign exchange instruments, and the bringing into or taking out of the People's Republic of China of foreign exchange, precious metals and foreign exchange instruments shall be governed by the provisions of these Regulations.

[Article 2] References to foreign exchange in these Regulations mean:

(1) Foreign currencies: including banknotes and coins;

(2) Securities in foreign currency: including government bonds, treasury bills, corporate bonds and debentures,shares of stock and interest coupons;

(3) Foreign currency payment instruments: including all kinds of negotiable instruments, bank deposit certificates, and postal savings certificates; and

(4) Other foreign exchange funds.

[Article 3] The People's Republic of China pursues the policy of centralized control and unified management by the State of foreign exchange.

The agency that implements foreign exchange control in the People's Republic of China is the State General Administration of Exchange Control (SGAEC) and its branch offices.

The specialized bank that engages in foreign exchange business in the People's Republic of China is the Bank of China.  No other banking institution may engage in foreign exchange business unless approved by the SGAEC.

[Article 4] Unless otherwise stipulated in the provisions of laws and decrees or in these Regulations, all Chinese and foreign institutions and individuals in the People's Republic of China must sell their foreign exchange receipts to the Bank of China, and any foreign exchange required is to be sold to them by the Bank of China in accordance with the plans approved by the State or with pertinent provisions.

In the People's Republic of China it is prohibited to circulate, use or pledge foreign currency, it is prohibited to buy or sell foreign exchange without authorization, and it is prohibited to use whatever means to engage in illegal procurement of foreign exchange or to evade exchange controls.

CHAPTER II FOREIGN EXCHANGE CONTROLS RELATING TO STATE UNITS AND COLLECTIVE ECONOMIC ORGANIZATIONS

[Article 5] The foreign exchange receipts and expenditures of government agencies, the armed forces, people's organizations, schools, state enterprises, institutions and urban and rural collective economic organizations in China (hereafter referred to as "domestic institutions") are subject to control according to plan.

The State permits domestic institutions to retain a portion of their foreign exchange receipts in accordance with pertinent provisions.

[Article 6] Unless approved by the SGAEC or its branch offices, domestic institutions may not possess foreign exchange without authorization, may not deposit foreign exchange abroad, may not set off foreign exchange receipts against foreign exchange expenditures, and may not borrow or acquire foreign exchange belonging to state agencies functioning abroad or state enterprises and institutions established in foreign countries or in Hongkong, Macao or other regions.

[Article 7] Unless approved by the State Council, domestic institutions may not, inside or outside the country, issue securities that have foreign exchange value.

[Article 8] If domestic institutions are to accept loans from banks or enterprises in foreign countries or in Hongkong, Macao or other regions, annual overall plans shall be compiled by the departments of the State Council in charge and the people's governments of the provinces, municipalities and autonomous regions concerned.  After examination by the SGAEC and the Foreign Investment Commission, these borrowing plans shall be submitted to the State Council for approval.

The procedures for examining and approving borrowings shall be separately prescribed.

[Article 9] The portion of foreign exchange retained by domestic institutions, foreign exchange relating to non-trade and compensation trade matters that is received in advance for later payment, funds borrowed in convertible foreign exchange and other foreign exchange held with the approval of the SGAEC or its branch offices must all be placed in foreign exchange deposit accounts or foreign exchange quota accounts to be opened with the Bank of China, and must be used within the prescribed scope and be subject to the supervision of the Bank of China.

[Article 10] When domestic institutions import or export goods, the banks handling the transactions shall examine their foreign exchange receipts and expenditures against the import or export licences as verified by Customs or against the Customs declaration for imports or exports.

[Article 11] State institutions functioning abroad must use foreign exchange in accordance with a plan approved by the State.

The profits derived from business operations by enterprises and institutions established in foreign countries or in Hongkong, Macao or other regions, except for a portion that may be retained as local working funds in accordance with a plan approved by the State, must be repatriated on schedule and sold to the Bank of China.

No Chinese institution functioning abroad may keep foreign exchange for domestic institutions without authorization.

[Article 12] Delegations and work-groups sent temporarily to foreign countries or to Hongkong, Macao or other regions must use foreign exchange in accordance with their respective specific plans.  Upon their return after completion of their missions, they must promptly repatriate their remaining foreign exchange, which shall be checked and sold to the Bank of China.

The delegations and work-groups referred to in the preceding paragraph and their members must promptly repatriate foreign exchange earned in their various business or professional activities; it may not be kept abroad without the approval of the SGAEC or its branch offices.

CHAPTER III FOREIGN EXCHANGE CONTROLS RELATING TO INDIVIDUALS

[Article 13] Foreign exchange remitted from foreign countries or from Hongkong, Macao or other regions to Chinese, foreign nationals or stateless persons residing in China must be sold to the Bank of China, except for a portion to be retained as permitted by the State.

[Article 14] Chinese, foreign nationals and stateless persons residing in China are permitted to keep in their own possession the foreign exchange that they maintain in China.

The foreign exchange referred to in the preceding paragraph may not, without authorization, be taken abroad in person or sent abroad through others or by mail; if the owners need to sell the foreign exchange, they must sell it to the Bank of China, but are permitted to retain a portion of the foreign exchange in accordance with a percentage prescribed by the State.

[Article 15] When repatriating foreign exchange that has been kept in foreign countries or in Hongkong, Macao or other regions by Chinese residing in China prior to the founding of the People's Republic of China, by overseas Chinese prior to their returning to take up residence in the country and by Hongkong and Macao compatriots prior to their returning to take up residence in their native places, the owners are permitted to retain a portion of the foreign exchange in accordance with a percentage prescribed by the State.

[Article 16] When individuals sent to work or study in foreign countries or in Hongkong, Macao or other regions return home after completion of their missions, if they remit or bring back foreign exchange that belongs personally to them, they are permitted to retain the entire amount.

[Article 17] The percentages of foreign exchange that individuals are permitted to retain under Articles 13, 14 and 15 of these Regulations shall be separately prescribed.

Foreign exchange that individuals are permitted to retain under Articles 13, 14, 15 and 16 of these Regulations must be deposited in the Bank of China.  These foreign exchange deposits may be sold to the Bank of China, or may be remitted abroad through the Bank of China, or may be taken abroad by presenting a certificate issued by the Bank of China; but these deposit certificates may not, without authorization, be taken abroad in person or sent abroad through others or by mail.

[Article 18] Foreign exchange that is remitted or brought in from foreign countries or from Hongkong, Macao or other regions by foreigners visiting China, by overseas Chinese and Hongkong and Macao compatriots returning for a short stay, by foreign experts, technicians, staff and workers engaged to work in domestic institutions in China, and by foreign students and trainees, etc., may be kept in their own possession, may be sold to or deposited in the Bank of China, or may be remitted or taken abroad.

[Article 19] If Chinese, foreign nationals and stateless persons residing in China need to buy foreign exchange to remit or to take abroad, they may apply to the local branch office of the SGAEC, and, after approval, the required foreign exchange will be sold to them by the Bank of China.

When foreign experts, technicians, or staff and workers engaged to work in domestic institutions in China apply for foreign exchange to be remitted or taken abroad, the Bank of China shall deal with the matter in accordance with the stipulations in the contracts or agreements,

CHAPTER IV FOREIGN EXCHANGE CONTROLS RELATING TO FOREIGN INSTITUTIONS IN CHINA AND THEIR PERSONNEL

[Article 20] Foreign exchange remitted or brought in from foreign countries or from Hongkong, Macao or other regions by foreign diplomatic missions, consular missions and commercial missions in China, by offices of international organizations and non-governmental institutions in China, and by diplomats, consuls and permanent personnel attached to these institutions, may be kept in their own possession, or sold to or deposited in the Bank of China, or remitted or taken abroad.

[Article 21] If the foreign diplomatic missions and consular missions in China request that the visa fees and certification fees that they receive in Renminbi from Chinese citizens be converted into foreign exchange, they must obtain the approval of the SGAEC or its branch offices.

CHAPTER V FOREIGN EXCHANGE CONTROLS RELATING TO OVERSEAS CHINESE VENTURES, FOREIGN VENTURES AND CHINESE-FOREIGN JOINT VENTURES AND THEIR PERSONNEL

[Article 22] All foreign exchange receipts of overseas Chinese ventures, foreign ventures and Chinese-foreign joint ventures must be deposited in the Bank of China; all their foreign exchange expenditures must be paid from their foreign exchange deposit accounts.

The ventures referred to in the preceding paragraph must submit periodic reports on their foreign exchange operations to the SGAEC or its branch offices, which have the right to examine their activities and conditions regarding foreign exchange receipts and expenditures.

[Article 23] Except when approved by the SGAEC or its branch offices, Renminbi shall in all cases be used in settling accounts between overseas Chinese ventures, foreign ventures and Chinese-foreign joint ventures on the one hand, and enterprises or individuals in the People's Republic of China on the other.

[Article 24] The net profits after paying taxes in accordance with the law and the other legitimate earnings of overseas Chinese ventures, foreign ventures and foreign joint venturers in Chinese-foreign joint ventures may be remitted abroad from the foreign exchange deposit accounts of the ventures concerned, upon application to the Bank of China.

If the ventures or the foreign joint venturers referred to in the preceding paragraph need to transfer foreign exchange capital from China, they shall apply to the SGAEC or its branch offices, and the remittances shall be made from the foreign exchange deposit accounts of the ventures.

[Article 25] The foreign staff and workers and the Hongkong and Macao staff and workers of overseas Chinese ventures, foreign ventures and Chineseforeign joint ventures, after paying taxes in accordance with the law, may remit or take abroad an amount in foreign exchange not exceeding 50% of their legitimate net earnings from wages, etc.

[Article 26] Overseas Chinese ventures, foreign ventures and Chinese-foreign joint ventures that wind up business in accordance with the law shall be responsible for the timely settlement in full of their outstanding obligations and taxes due in China, under the joint supervision of the relevant departments in charge and the SGAEC or its branch offices.

CHAPTER VI CONTROLS RELATING TO CARRYING FOREIGN EXCHANGE, PRECIOUS METALS AND FOREIGN EXCHANGE INSTRUMENTS INTO AND OUT OF CHINA

[Article 27] No restriction as to amount shall be imposed when foreign exchange, precious metals and objects made from precious metals are brought into China, but a Customs declaration must be made at the place of entry.

When foreign exchange, including foreign exchange previously brought in, is taken abroad, Customs clearance shall be based upon certification by the Bank of China or the original declaration made at the time of entry.

When precious metals and objects made from precious metals, including those that were previously brought in, are taken abroad, Customs clearance shall be based upon consideration of the specific circumstances, in accordance with the legal provisions of the State or in accordance with the original declaration made at the time of entry.

[Article 28] When Renminbi traveller's checks and traveller's letters of credit and other Renminbi foreign exchange instruments are brought into the country, Customs clearance shall be based upon the declaration form; when they are taken abroad, Customs clearance shall be based upon certification by the Bank of China or the original declaration made at the time of entry.

[Article 29] Unless otherwise approved by the SGAEC or its branch offices, Chinese who reside in China may not take abroad in person or send abroad through others or by mail foreign bonds and debentures, shares of stock or real estate title deeds in their possession, as well as any kind of certificate or contract held by them that is related to the handling of creditors' rights, inheritances, real estate or other foreign exchange assets abroad.

[Article 30] Renminbi checks, drafts, passbooks, deposit certificates and other Renminbi instruments held by Chinese, foreign nationals or stateless persons residing in China may not be taken abroad in person or sent abroad through others or by mail.

CHAPTER VII SUPPLEMENTARY PROVISIONS

[Article 31] All units and individuals have the right to report any violation of these regulations.  Reward shall be given to such units or individuals according to the merit of the report.  Violators shall be penalized by the SGAEC, its branch offices or by the departments of public security, or by the departments of administation of industry and commerce, or by the Customs.  According to the seriousness of the offence, the penalties may take the form of compulsory exchange of the foreign currency for Renminbi, or fine or confiscation of the properties or both, or punishment by judicial authorities according to law.

[Article 32] The exchange control regulations for special economic zones, for trade in border areas, and for personal dealings between inhabitants across the border shall be formulated by the people's governments of the provinces, municipalities and autonomous regions concerned in the spirit of these regulations and in light of specific local conditions,and shall be enforced upon the approval of the State Council.

[Article 33] Detailed provisions for the enforcement of these regulations shall be formulated by the SGAEC.

[Article 34] These Regulations shall come into force on March 1, 1981.