State Administration of Foreign Exchange, Circular on Issues Relevant to Strengthening the Administration of Foreign Exchange Transactions

国家外汇管理局关于加强外汇业务管理有关问题的通知

December 14, 2010 | BY

clpstaff &clp articles &

Safe issues seven measures to block hot money inflow.

Clp Reference: 3800/10.11.09 Promulgated: 2010-11-09 Effective: 2010-11-09

Issued: November 9 2010
Effective: as of date of issuance

Main contents: To safeguard against financial risks from cross-border capital flows, the State Administration of Foreign Exchange sets forth the following measures:

(1) strengthen the administration of the overall foreign exchange position of banks in respect of the conversion and sale of foreign exchange, and impose a floor amount on the balance of positions calculated according to the cash-basis accounting principle on banks (Article 1);

(2) tighten the network verification of receipts and conversion of foreign exchange from exports, including rigorously carrying out the procedures for foreign exchange conversion and transfer of funds in accounts to be verified, and lowering the percentage of foreign exchange receipts from processing of supplied materials from 30% to 20% (Article 2);

(3) tighten the administration of short-term foreign debt indicators and the balance of security to third parties of financial institutions (Articles 3);

(4) strengthen the administration of capital contribution by overseas investors of foreign-invested enterprises (Article 4);

(5) strengthen the verification of the authenticity of foreign exchange conversion for the funds raised from overseas listings that are repatriated to China according to the system for payment and conversion of foreign exchange (Article 5);

(6) strengthen the administration of establishment of overseas special purpose vehicles by domestic organisations and individuals (Article 6); and

(7) stringently impose, in accordance with the law, penalties on banks that are in violation of provisions (Article 7).

clp reference:3800/10.11.09promulgated:2010-11-09effective:2010-11-09

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