Rules on Foreign Exchange Administration in Bonded Areas Ⅰ

SAFE branches in all provinces , autonomous regions and municipalities directly under the Central Government, exchange administration offices, and SAFE branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:

　　To meet the new situation of exchange administration in bonded areas, the SAFE has revised the Rules on Foreign Exchange Administration in Bonded Areas promulgated on December 18, 1995 and put into force on January 1, 1996. The revised Rules on Foreign Exchange Administration in Bonded Areas is hereby promulgated for implementation.

　　1. According to Rules on Foreign Exchange Administration in Bonded Areas, an inside-area enterprise, whether Chinese or foreign-funded, shall go through formalities of foreign exchange registration and apply for Foreign Exchange Registration Certificate in Bonded Areas. Therefore, as from the day when Rules on Foreign Exchange Administration in Bonded Areas is officially implemented, branches and sub-branches of the State Administration of Foreign Exchange （hereinafter referred to as SAFE offices） shall no longer issue Foreign Exchange Registration Certificate of enterprise with foreign investment to an inside-area enterprise with foreign investment any longer. Instead, they shall only issue Foreign Exchange Registration Certificate in Bonded Areas to such enterprise.

　　2. As of promulgation of this circular, SAFE branches and exchange administration offices are required to reissue Foreign Exchange Registration Certificate in Bonded Areas to inside-area enterprises, and collect from them the old Foreign Exchange Registration Certificate in Bonded Areas and Foreign Exchange Registration Certificate of Enterprise with Foreign Investment. The changeover shall be finished before January 1, 2003.

　　3. During the changeover period, both old and new Foreign Exchange Registration Certificates in Bonded Areas are valid. If an inside-area enterprise cannot acquire the new Foreign Exchange Registration Certificates in Bonded Areas in time to make foreign exchange payment or collection due to reasons on the SAFE office''s side, according to Rules on Foreign Exchange Administration in Bonded Areas, its'' foreign exchange payment or collection may be made by a bank upon SAFE office''s approval on a temporary basis. As of January 1, 2003, the old Foreign Exchange Registration Certificate in Bonded Areas and Foreign Exchange Registration Certificate of enterprise with foreign investment shall become invalid without exception.

　　On receiving this circular, SAFE branches and exchange administration offices shall transmit it promptly to sub-branches and banks under their jurisdiction, administrative organs of bonded areas, and inside-area enterprises, give publicity to the Rules and make preparations to ensure timely issuance of the new Foreign Exchange Registration Certificate in Bonded Areas to the inside-area enterprises. Any problem encountered during implementation shall be reported to the General Affairs Department of the State Administration of Foreign Exchange in good time.

　　Attachment: Rules on Foreign Exchange Administration in Bonded Areas

　　Chapter I General Provisions

　　Article 1 Pursuant to Regulations on the Exchange System of the People''s Republic of China and relevant laws and regulations, this Rules is formulated with a view to improving foreign exchange administration in bonded areas and facilitating sound economic development.

　　Article 2 Bonded areas in this Rules refers to the special areas inside the People''s Republic of China （hereinafter referred to as inside China） under closed supervision of the customs established with the approval of the State Council.

　　Article 3 Outside areas in this Rules refers to the areas inside China other than the bonded areas.

　　Article 4 Inside-area entities in this Rules referred to the administrative organs, enterprises, institutions, and other economic organizations inside the bonded areas.

　　Inside-area Enterprises in the precious paragraph refer to both Chinese-funded and foreign-funded enterprises registered in the bonded areas.

　　Article 5 The organ responsible for foreign exchange administration in the bonded areas is the State Administration of Foreign Exchange （SAFE）, its branches and sub-branches （hereinafter referred to as SAFE offices）.

　　Article 6 Foreign exchange operational activities related to the bonded areas shall be conducted according to this Rules.

　　Article 7 Overseas economic transactions of the bonded areas shall be priced and settled in foreign exchange instead of in renminbi.

　　Bonded goods flowing between the bonded areas and outside areas shall be priced and settled in foreign exchange instead of in renminbi. Goods other than bonded ones flowing between the bonded areas and outside areas may be priced and settled either in renminbi or in foreign exchange. Non-trade transactions such as services shall be priced and settled in renminbi.

　　Transactions between inside-area enterprises in the same bonded area or between different bonded areas may be priced and settled either in renminbi or in foreign exchange. Fees of administrative organs inside the bonded areas shall be priced and settled in renminbi. Economic transactions between the bonded areas and other special areas under closed supervision of the customs, such as the processing areas for export and the Shanghai Diamond Exchange are regarded as transactions between bonded areas.

　　Article 8 Banks shall abide by this Rules and other relevant foreign exchange administration regulations when opening or closing a foreign exchange accounts for, purchasing foreign exchange from or selling foreign exchange to, and making payment or collection in foreign exchange for inside-area enterprises. They shall verify and keep related certificates and vouchers and submit statistic statements and other information to SAFE offices as required.

　　Article 9 All foreign exchange revenues earned by inside-area entities shall be repatriated in time and shall not be deposited overseas without approval of SAFE offices.

　　Article 10 For economic transactions with overseas enterprises, inside-area entities shall go through formalities of balance of payment statistical reporting as required. For economic transactions between inside-area and outside-area entities balance of payment statistical reporting is not required of the entities concerned.

　　Chapter II Foreign Exchange Registration and Annual Inspection

　　Article 11 Within 30 days after acquiring the industrial and commercial business license, the inside-area enterprise shall go through formalities of foreign exchange registration at a relevant SAFE office by presenting the industrial and commercial business license and its copy, the approved contract and its articles of association, and the certificate of organizational code （in the case of an enterprise with foreign investment, the approval document for its establishment is also required）, and fill out the Registration Form of Basic Information accurately.

　　After verifying the submitted documents, the SAFE office shall issue a Foreign Exchange Registration Certificate in Bonded Areas （hereinafter referred to as registration certificate） to the inside-area enterprise. The registration certificate shall be designed by the SAFE and printed by its branches. The registration certificate shall not be forged, altered, rented, lent, transferred, or sold to other entities.

　　Article 12 In case of change of name, address, business scope, stock equity transfer, increase of capital, merger and split after foreign exchange registration, the inside-area enterprise shall report to relevant SAFE office for record and go through formalities of altering foreign exchange registration upon relevant materials within 30 days after acquiring altered industrial and commercial business license.

　　Article 13 In the case of liquidation due to expiration of business term or casual termination of business, the inside-area enterprise shall hand in its registration certificate to the SAFE office and go through formalities of nullifying foreign exchange registration within 30 working days after liquidation is approved by the examining and approving body. Outward remittance of liquidated fund shall be made upon presentation of "approval for foreign exchange business under capital account" issued by the SAFE office. The inside-area enterprise shall hand in its registration certificate to the SAFE office and go through formalities of nullifying foreign exchange registration when it applies for such remittance.

　　Article 14 If the inside-area enterprise loses its registration certificate, it shall make a statement in the newspaper and report to the SAFE office within 5 days after the statement. The SAFE office shall re-issue a registration certificate upon the statement.

　　Article 15 The SAFE office shall inspect annually the inside-area enterprise''s foreign exchange income and expenditure as well as business operations in the first quarter of each year. After the annual inspection, the SAFE office shall record the result in the registration certificate.

　　Article 16 An inside-area enterprise''s income and expenditure in foreign exchange shall only be handled upon inspected and required valid registration certificate and prescribed valid certificates and commercial vouchers. The bank shall not immediately go through formalities of foreign exchange sale, purchase, payment and receipt for an enterprise that cannot present a valid registration certificate.

　　If an inside-area enterprise has not taken or passed the annual inspection, or fails to provide valid registration certificate, the SAFE office shall instruct it to rectify within a stated time. During the period of rectification, each of its receipt or payment in foreign exchange shall be handled by the bank upon the SAFE office''s approval.

　　Chapter III Open, Use, and Administration of Foreign Exchange Accounts

　　Article 17 An inside-area enterprise, before opening a foreign exchange account, shall apply at the SAFE office in the locality where the enterprise is registered by presenting its registration certificate and materials required by relevant regulations on foreign exchange account. Foreign exchange account for current account transactions shall be opened on the presentation of the "Account-opening Notice" issued by the SAFE office and the registration certificate. Special foreign exchange account for capital account transactions shall be opened on the presentation of the "approval for foreign exchange business under capital account" issued by the SAFE office and the registration certificate.

　　Foreign exchange account for current account transactions shall be opened at a bank in the locality where the enterprise is registered. And in principle, only one such account can be opened.

　　Special foreign exchange account for capital account transactions may be opened at a bank inside or outside the locality where the inside-area enterprise in registered. Before opening a special foreign exchange account for capital account transactions at a bank outside the locality of its registration, the inside-area enterprise shall apply to the SAFE office in the locality where the account is to be opened, and go through the formalities of account opening at a bank in the locality where the account is to be opened by presenting the "approval for foreign exchange business under capital account" issued by the SAFE office and the registration certificate.

　　Article 18 When approving an inside-area enterprise to open a foreign exchange account, the SAFE office shall check and ratify the receipt and payment scope and lifetime of the account according to the nature and purpose of the account in the "Account-opening Notice" or the "approval for foreign exchange business under capital account". But the SAFE office shall not set a balance ceiling for the foreign exchange account for current account transactions of the inside-area enterprise.

　　Article 19 The bank shall open foreign exchange account for an inside-area enterprise upon the "Account-opening Notice" or the "approval for foreign exchange business under capital account" issued by the SAFE office, indicate clearly in the relevant column of the enterprise''s registration certificate the bank''s name, account number, currency denomination and date of opening, and affix its seal to the certificate. The bank shall supervise the use by the inside-area enterprise of the foreign exchange account according to the scope of receipt and payment and lifetime of account.

　　Article 20 The inside-area enterprise shall use its foreign exchange account according to the scope of receipt and payment and lifetime ratified by the SAFE office.

　　Article 21 When an inside-area enterprise wants to close its foreign exchange account, it shall go through formalities of closing the account at the SAFE office presenting the registration certificate and the account-closed certificate issued by the account-opening financial institution within 10 working days after the account is cleared.

　　After the foreign exchange account of an inside-area enterprise is closed, the foreign exchange balance in it may be transferred into its new foreign exchange account opened upon approval of SAFE office. In the case of terminating business operation,Article 35 of this Rules shall be acted upon.