State Administration of Foreign Exchange, Measures for the Administration of Foreign Debt Registration

Main contents: The Circular simplifies the stages involved in the administration of foreign debt registration, cancels certain examination and approval matters relating to foreign debt control and, with the exception of foreign debt agreement registration, the opening of foreign debt accounts, conversion of funds and repayment of principal and interest may be directly reviewed and handled by designated foreign exchange banks.

The proceeds of a foreign debt taken out by a foreign-invested enterprise may be converted and used. Unless otherwise provided, the proceeds of a foreign debt taken out by a domestic financial institution or Chinese-invested enterprise may not be converted and used (Article 14).

The purpose of the proceeds of the foreign debt specified in the debtor's loan contract shall comply with exchange control provisions. In principle, a short-term foreign debt may only be used as working capital, and may not be used for medium and long-term purposes such as investment in fixed assets (Article 16).

A foreign-invested enterprise that carries out the procedures for a domestic loan and accepts foreign security may execute a security contract directly with the foreign guarantor and creditor. If performance of the foreign security arises, the amount thereof shall be incorporated into the foreign-invested enterprise's foreign debt size for administration purposes (Article 19).

Related legislation: Tentative Measures on Foreign Debt Administration, Jan 8 2003, CLP 2003 No.2 p.63

Repealed legislation: Circular on Issues Relevant to Taking out Foreign Loans Denominated in Renminbi; Circular on Prohibiting the Lending and Borrowing of Foreign Exchange Between Non-financial Enterprises; Circular on Relevant Principles for Treatment of the Payment of Foreign-Related Security Fees; Circular on Revising the Measures for Control of the Purchase of Foreign Exchange for the Prepayment of Loans; Circular on Issues Relevant to Exchange Control in Connection with the Use of Foreign Investment to Dispose of Non-performing Assets by Financial Asset Management Companies; Circular on Issues Relevant to Improving the Administration of Foreign Debts; Official Reply on Issues Relevant to the Conversion of Offshore Security Performance Moneys; and Circular on Issues Relevant to the Administration of Security Record Filing in Connection with the Transfer of Non-performing Assets to Foreign Entities by Financial Asset Management Companies

Issued: April 28 2013

Effective: May 13 2013

Interpreting authority: State Administration of Foreign Exchange

Main contents: The Circular simplifies the stages involved in the administration of foreign debt registration, cancels certain examination and approval matters relating to foreign debt control and, with the exception of foreign debt agreement registration, the opening of foreign debt accounts, conversion of funds and repayment of principal and interest may be directly reviewed and handled by designated foreign exchange banks.

The proceeds of a foreign debt taken out by a foreign-invested enterprise may be converted and used. Unless otherwise provided, the proceeds of a foreign debt taken out by a domestic financial institution or Chinese-invested enterprise may not be converted and used (Article 14).

The purpose of the proceeds of the foreign debt specified in the debtor's loan contract shall comply with exchange control provisions. In principle, a short-term foreign debt may only be used as working capital, and may not be used for medium and long-term purposes such as investment in fixed assets (Article 16).

A foreign-invested enterprise that carries out the procedures for a domestic loan and accepts foreign security may execute a security contract directly with the foreign guarantor and creditor. If performance of the foreign security arises, the amount thereof shall be incorporated into the foreign-invested enterprise's foreign debt size for administration purposes (Article 19).

Related legislation: Tentative Measures on Foreign Debt Administration, Jan 8 2003, CLP 2003 No.2 p.63

Repealed legislation: Circular on Issues Relevant to Taking out Foreign Loans Denominated in Renminbi; Circular on Prohibiting the Lending and Borrowing of Foreign Exchange Between Non-financial Enterprises; Circular on Relevant Principles for Treatment of the Payment of Foreign-Related Security Fees; Circular on Revising the Measures for Control of the Purchase of Foreign Exchange for the Prepayment of Loans; Circular on Issues Relevant to Exchange Control in Connection with the Use of Foreign Investment to Dispose of Non-performing Assets by Financial Asset Management Companies; Circular on Issues Relevant to Improving the Administration of Foreign Debts; Official Reply on Issues Relevant to the Conversion of Offshore Security Performance Moneys; and Circular on Issues Relevant to the Administration of Security Record Filing in Connection with the Transfer of Non-performing Assets to Foreign Entities by Financial Asset Management Companies