People's Bank of China, Administration of Reporting of Large and Suspicious Foreign Exchange Transactions by Financial Institutions Measures

Promulgated: January 3 2003
Effective: March 1 2003
Applicability: For the purposes of these Measures, a foreign exchange transaction is "large" if it involves an amount beyond a specified threshold and "suspicious" if abnormality is found in terms of amount, frequency, source, direction and application (Article 2)

Main contents: Financial institutions shall report all large and suspicious foreign exchange transactions to the State Administration of Foreign Exchange through its local branches on a monthly basis (Articles 11, 14 and 16). Where money laundering is suspected, the report shall be made in paper and shall include related documents (Article 12). Financial institutions shall report to the local public security department and copy the local foreign exchange administration of any transaction in which criminal activities are found within three working days of such finding (Article 15). The Measures provide separate and detailed definitions of "large", "suspicious cash" and "suspicious non-cash" foreign exchange transactions. The threshold amount of a daily single or cumulative "large foreign exchange transaction(s)" is US$10,000 in the case of cash transaction, US$100,000 in the case of non-cash single or daily cumulative transaction(s) by an individual and US$500,000 in the case of non-cash single or daily cumulative transaction(s) by an enterprise (Article 8). An investment by a foreign-invested enterprise using foreign exchange cash would be a "suspicious cash" foreign exchange transaction (Article 9). Frequent (defined as three or more times daily, or occurring daily for a period of five or more days) movement of large amount of foreign exchange between the foreign exchange accounts of an enterprise that is incompatible with its business nature or scope, or remittance of foreign exchange capital contributions out of the country promptly after their receipt by a foreign-invested enterprise that is incompatible with the need for its production or operation expenses, would be "suspicious non-cash" transactions (Article 10). Financial institutions are required to maintain records of all such transactions for at least five years from the date of their occurrence (Article 6). Such information shall not be disclosed to any work unit or individual unless required by law (Article 7).
Related legislation: PRC People's Bank of China Law, Mar 18 1995, CLP 1995 No.5 p23 and PRC Foreign Exchange Control Regulations (2nd Revision), Aug 5 2008, CLP 2008 No.8 p77