State Administration of Foreign Exchange, Circular on Issues Relevant to Relaxation on the Retaining of Foreign Exchange Revenue from Current Account Items of Domestic Organizations

Issued: August 2 2005
Effective: as of date of issue
Applicability: In the case of a conflict between previous provisions and this Circular, this Circular shall prevail (Item Seven).

Main contents: The ratio of foreign exchange (other than notes) to be retained in the foreign exchange account for current account items of domestic organizations whose ratio of foreign exchange expenditure on current account items to foreign exchange revenue from current account items is less than 80% in the previous year shall be adjusted to 50% (previously 30%) of the foreign exchange revenue from current account items of the previous year (Item One). The ratio of foreign exchange (other than notes) to be retained in the foreign exchange account for current account items of domestic organizations whose ratio of foreign exchange expenditure on current account items to foreign exchange revenue from current account items is 80% or more in the previous year shall be adjusted to 80% (previously 50%) of the foreign exchange revenue from current account items of the previous year (Item Two). In the case of newly opened foreign exchange accounts for current account items, if a domestic organization has no foreign exchange revenue from current account items in the previous year, the initial limit on the account shall be adjusted to not exceeding the equivalent of US$200,000 (previously US$100,000) (Item Three). The limit on the foreign exchange account for current account items for import and export enterprises and production-type enterprises with actual business needs may be verified at 100% of their foreign exchange revenue, subject to the verification of the respective branches of the State Administration of Foreign Exchange (Item Five).
Related legislation: Circular on Issues Relevant to Further Adjusting the Policies on Foreign Exchange Accounts for Current Account Items, Sep 9 2002, CLP 2002 No.9 p.7; Circular on Issues Relevant to Adjusting the Administrative Policies on Foreign Exchange Accounts for Current Account Items for Such Activities as International Contracting Projects, Aug 5 2003, CLP 2003 No.7 p.6 and Circular on Administrative Measures Concerning Adjustment to the Limits of Foreign Exchange Accounts for Current Account Items, Feb 4 2005, CLP 2005 No.2 p.9
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