State Administration of Foreign Exchange, Foreign Exchange Administrative Issues Relevant to Individual Foreign Trade Business Circular

Promulgated: August 10 2004
Effective: 30 days after date of promulgation
Applicability: "Foreign trade operators" refers to individuals engaging in foreign trade business activities who have obtained the right to engage in foreign trade, subsequent to carrying out the procedures for industry and commerce registration or other business procedures in accordance with the law, obtaining individual business licences for industry and commerce or other business certificates, and carrying out registration for the record (except where registration for the record is not required according to law) in accordance with the stipulations of the State Council department in charge of commerce (Item One).

Main contents: Individual foreign trade operators may, according to the actual business needs, open individual foreign trade settlement accounts, for foreign exchange receipts and payments for import and export trade in goods, with the approval of the State Administration of Foreign Exchange (Items Four and Five). The limit on individual foreign trade settlement accounts is determined by individual foreign trade operators' entire amount of actual foreign exchange income from trade in goods (Item Five). An individual foreign trade settlement account is a foreign exchange account, where deposit or withdrawal of foreign currency notes is not allowed. Transfer of foreign exchange funds can be made between the foreign trade settlement account and foreign currency savings exchange account for the same individual. However, transfer from the individual savings exchange account to the individual foreign trade settlement account is limited to payment to a foreign party on the date of transfer and shall not be used for settlement. Funds may be transferred from individual foreign trade settlement accounts to individual foreign currency notes savings accounts, but transfer of funds from the latter to the former is not allowed (Item Six). Individual foreign trade operators engaging in business activities of foreign trade in goods may directly handle procedures for purchasing foreign exchange for payment to a foreign party and settlement with the banks, or handle the procedures via individual foreign trade settlement accounts. However, procedures for payment of foreign exchange shall not be directly handled via individual foreign currency savings accounts. Such accounts shall not be concurrently used with any other foreign currency savings accounts of the same person, nor shall the two accounts be combined to use (Item Seven).
Related legislation: State Administration of Foreign Exchange, Regulation on the Settlement of Foreign Exchange Control Issues by Individual Residents Circular, 2004; People's Bank of China, Declaration of Balance of Payments Statistics Procedures, Sep 14 1995, CLP 1995 No.10 p8 and PRC Foreign Exchange Control Regulations (2nd Revision), Aug 5 2008, CLP 2008 No.8 p77