Administrative Regulations of the People's Republic of China on Foreign Exchange (Revised in 2008)

Order of the State Council No.532

August 5, 2008

(Issued by Order No. 193 of the State Council on January 29, 1996, revised in accordance with the Decision of the State Council to Revise the Administrative Regulations of the People's Republic of China on Foreign Exchange made on January 14, 1997, and adopted after being revised at the 20th executive meeting of the State Council on August 1, 2008)

Chapter I General Provisions

Article 1 These Regulations are formulated to strengthen the administration of foreign exchange, maintain the balance of international payments, and promote the healthy development of the national economy.

Article 2 The State Council foreign exchange administrative department and its branches (hereinafter referred to as the foreign exchange administrative authorities) shall be responsible for the administration of foreign exchange in accordance with the law and implementing these Regulations.

Article 3 The term "foreign exchange" as used in these Regulations refers to the following payment instruments and assets that can be used for international settlements and are expressed in a foreign currency:
1. Cash in any foreign currency, including notes and coins;
2. Foreign currency payment orders and payment instruments, including bills, bank deposits, bank cards, etc.;
3. Foreign currency negotiable securities, including bonds, stocks, etc.;
4. Special drawing rights; and
5. Other foreign currency assets.


Article 4 These Regulations shall apply to foreign exchange receipts and disbursements and to the foreign exchange business activities of domestic organizations and individuals, foreign organizations, and foreign individuals.

Article 5 The state will not impose any restrictions on international payments or transfers on current account.


Article 6 The state shall implement a system for the compilation of statistics and reports on international payments.
The State Council foreign exchange administrative department shall carry out statistical and monitoring activities with respect to international receipts and payments and periodically publish international income and payment information.

Article 7 Financial institutions engaged in foreign exchange business shall open client foreign exchange accounts in accordance with State Council foreign exchange administrative department provisions and handle foreign exchange business through such foreign exchange accounts.
Financial institutions engaged in foreign exchange business shall, in accordance with the law, report all client foreign exchange receipts and payments and all client account changes to the relevant foreign exchange administrative authority.


Article 8 Unless otherwise provided for by the state, no foreign currency shall be circulated within the territory of China and no foreign currency shall be used for price calculation or settlement purposes.

Article 9 The foreign exchange income of domestic organizations and individuals may be remitted back to China or deposited outside China. The State Council foreign exchange administrative department shall, according to the circumstances of international receipts and payments and foreign exchange administrative requirements, make provisions relating to the requirements, periods and other aspects of such remittances and deposits.

Article 10 The State Council foreign exchange administrative department shall, in accordance with the law, hold, manage and operate the foreign exchange reserves of the state and shall adhere to the principles of security, liquidity and increase in value.

Article 11 Where any material imbalance in international receipts and payments occurs or may occur, or any serious economic crisis occurs or may occur in China, the state may implement the necessary safeguards, controls and other measures with respect to international receipts and payments.

Chapter II Administration of Foreign Exchange on Current Account

Article 12 International receipts and payments on current account shall be based on genuine and lawful transactions. Financial institutions engaged in foreign exchange settlement and sales business shall, in accordance with State Council foreign exchange administrative department provisions, examine in a reasonable manner the genuineness of documents involved in a transaction and the consistency of such documents with the relevant international receipts and payments.
The foreign exchange administrative authorities shall have the power to supervise and inspect the matters specified in the preceding paragraph.


Article 13 Current account foreign exchange income may, in accordance with relevant provisions of the state, be retained or sold to any financial institution engaged in foreign exchange settlement and sales business.

Article 14 Foreign exchange payments from current account shall, in accordance with State Council foreign exchange administrative department provisions relating to foreign exchange payments and purchases, be made out of own foreign exchange funds on the strength of valid documents or be made with foreign exchange purchased from any financial institution engaged in foreign exchange settlement and sales business.

Article 15 The State Council foreign exchange administrative department shall make provisions relating to limits for foreign currency cash to be carried and reported for exit or entry purposes.

Chapter III Administration of Foreign Exchange on Capital Account

Article 16 Any foreign organization or individual that seeks to make a direct investment in China shall, after obtaining approval from the relevant competent department, make the appropriate registrations with the relevant foreign exchange administrative authority.
Any foreign organization or individual that seeks to engage in the issuance or trading of negotiable securities or derivatives shall comply with state provisions relating to market access and shall make the appropriate registrations in accordance with State Council foreign exchange administrative department provisions.

Article 17 Any domestic organization or individual that seeks to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas shall make the appropriate registrations in accordance with State Council foreign exchange administrative department provisions. Any such organization or individual that is required to obtain approval from or make a filing with the relevant competent authority in accordance with state provisions shall go through the approval or filing formalities before making said registrations.

Article 18 The State exercises scale management on administer foreign debts. Foreign currency borrowings shall be handled in accordance with relevant provisions of the state and registered as foreign debts with the relevant foreign exchange administrative authority.
The State Council foreign exchange administrative department shall be responsible for the compilation of statistics on and monitoring of China's foreign debts and shall periodically publish foreign debt information.

Article 19 Where any overseas guarantee is to be provided, an application shall be submitted to the relevant foreign exchange administrative authority which shall, in light of the assets, liabilities and other circumstances of the applicant, make a decision to approve or decline the application. Where state provisions require that the business scope of an applicant be approved by the relevant competent authority, the applicant shall go through the approval formalities before submitting an application to the relevant foreign exchange administrative authority. After entering into an overseas guarantee contract, an applicant shall make the appropriate registrations with the relevant foreign exchange administrative authority for the overseas guarantee contract.
The provisions of the preceding paragraph shall not apply to any overseas guarantee approved by the State Council which is provided for to allow a loan from a foreign government or international financial organization to be used for relending purposes.

Article 20 Any financial institution in the banking sector may, within its approved scope of business, directly provide overseas commercial loans. Any financial institution not in the banking sector that seeks to provide overseas commercial loans shall submit an application to the relevant foreign exchange administrative authority which shall, in light of the assets, liabilities and other circumstances of the applicant, make a decision to approve or decline the application. Where state provisions require that the business scope of an applicant be approved by the relevant competent authority, the applicant shall go through the approval formalities before submitting an application to the relevant foreign exchange administrative authority.
Where any overseas commercial loan is to be provided, the appropriate registrations shall be made in accordance with State Council foreign exchange administrative department provisions.

Article 21 Where any foreign exchange income on capital account is to be retained or sold to a financial institution engaged in foreign exchange settlement and sales business, an approval shall be obtained from the relevant foreign exchange administrative authority, other than where no approval is required under state provisions.

Article 22 Any foreign exchange payment from capital account shall, in accordance with State Council foreign exchange administrative department provisions relating to foreign exchange payments and purchases, be made out of own foreign exchange funds on the strength of valid documents or be made with foreign exchange purchased from any financial institution engaged in foreign exchange settlement and sales business. Where an approval from the relevant foreign exchange administrative authority is required in accordance with state provisions, the relevant approval formalities shall be handled before the foreign exchange payment is made.
For foreign-funded enterprises wound up in accordance with the law, the amount of Renminbi that belongs to the relevant foreign investor(s) after liquidation and payment of tax pursuant to relevant state provisions may be used to purchase foreign exchange from any financial institution engaged in foreign exchange settlement and sales business in order to remit it outside China.

Article 23 Foreign exchange on capital account and funds held for the purpose of foreign exchange settlement shall be utilized in accordance with the purposes approved by the relevant competent authority and the relevant foreign exchange administrative authority. The foreign exchange administrative authorities shall have the power to supervise and inspect the utilization of foreign exchange held on capital account and foreign exchange settlement funds, in addition to any changes in capital accounts.

Chapter IV Administration of the Foreign Exchange Business of Financial Institutions

Article 24 Any financial institution that seeks to engage in or cease engaging in foreign exchange settlement and sales business shall obtain an approval from the relevant foreign exchange administrative authority. Any financial institution that seeks to engage in or cease engaging in any other foreign exchange business shall obtain an approval from the relevant foreign exchange administrative authority or the relevant banking regulatory authority, as the case may be, according to their respective duties and functions.

Article 25 The foreign exchange administrative authorities shall administer the foreign exchange business of financial institutions on an overall position basis, the specific measures for which shall be formulated by the State Council foreign exchange administrative department.

Article 26 Where the capital funds or profits of a financial institution need be converted from Renminbi into any foreign currency or any such conversion is needed by reason of a mismatch between its assets denominated in Renminbi and those denominated in the relevant foreign currency, it shall obtain an approval from the relevant foreign exchange administrative authority.

Chapter V Renminbi Exchange Rates and the Administration of the Foreign Exchange Market

Article 27 A well-managed floating exchange rate system based on market supply and demand shall be implemented for Renminbi exchange rates.


Article 28 Any financial institution engaged in foreign exchange settlement and sales business and any other institution that meets the requirements specified by the State Council foreign exchange administrative department may trade foreign exchange in the interbank foreign exchange market in accordance with State Council foreign exchange administrative department provisions.

Article 29 Foreign exchange market transactions shall be carried out in accordance with the principles of openness, fairness, impartiality and good faith.

Article 30 The currencies and forms of transactions in the foreign exchange market shall be prescribed by the State Council foreign exchange administrative department.

Article 31 The State Council foreign exchange administrative department shall supervise and administer the foreign exchange market throughout China.

Article 32 The State Council foreign exchange administrative department may, in light of changes in the foreign exchange market and monetary policy requirements, make adjustments to the foreign exchange market in accordance with the law.

Chapter VI Supervision and Administration

Article 33 Foreign exchange administrative authorities shall discharge their duties in accordance with the law and shall have the power to take the following action:
1. Conduct onsite inspections of financial institutions engaged in foreign exchange business;
2. Enter premises in which it is suspected an illegality involving foreign exchange has been committed to carry out an appropriate investigation and gather relevant evidence;
3. Question any institution or individual that has received or made foreign exchange income or payments or engaged in foreign exchange activities and require the institution or individual to make a statement as to matters directly related to any illegality discovered involving foreign exchange;
4. Consult and copy transactional documents and other information directly related to any illegality discovered involving foreign exchange;
5. Consult and reproduce financial information and relevant documents of any party involved in any illegality discovered involving foreign exchange or to any entity or individual directly related thereto, and seize any documents or information that may be removed, concealed or destroyed;
6. After obtaining approval from the State Council foreign exchange administrative department or the individual responsible at the relevant provincial level foreign exchange administrative authority, inquire about the accounts of any party involved in any illegality discovered involving foreign exchange or of any entity or individual directly related thereto, other than any personal savings deposit account; and
7. Where there is evidence that property involved in the relevant case such as illegal funds has been or may be transferred or concealed or that any material evidence has been or may be concealed, forged or destroyed, a request may be made to the relevant people's court to freeze up or seize such property or evidence.
Relevant entities and individuals shall cooperate with the foreign exchange administrative authorities in their supervisory and inspection activities, give true statements on any relevant matter and provide relevant documents and information, and shall not refuse to cooperate with, obstruct such activities conducted by, or conceal any document or information from, the foreign exchange administrative authorities.

Article 34 The foreign exchange administrative authorities shall carry out their supervisory and inspection activities or investigations in accordance with the law. In carrying out such activities or investigations, no less than two persons shall be involved and shall produce their identification documents. Failure to do so shall give the entity or individual in respect of which such activities or investigations are being carried out the right to refuse to cooperate.

Article 35 Any domestic organization engaged in foreign exchange business activities shall, in accordance with State Council foreign exchange administrative department provisions, submit its financial reports, statistical statements and other information.

Article 36 Any financial institution engaged in foreign exchange business that discovers any illegality committed by a client involving foreign exchange shall promptly report the matter to the relevant foreign exchange administrative authority.

Article 37 For the purpose of discharging its foreign exchange administrative duties, the State Council foreign exchange administrative department may obtain the necessary information from any relevant department or agency of the State Council and such department or agency shall provide the relevant information.
The State Council foreign exchange administrative department shall circulate reports on its foreign exchange administrative work to the relevant departments and agencies of the State Council.

Article 38 Any entity or individual shall be entitled to report any illegality involving foreign exchange.
The foreign exchange administrative authorities shall not disclose the identity of any whistleblower and shall, in accordance with relevant provisions, reward the whistleblower and any entity or individual that assists in the investigation of any illegality involving foreign exchange.

Chapter VII Legal Liability

Article 39 Where any organization or individual transfers foreign exchange outside China in violation of applicable provisions, transfers funds outside China by fraudulent means, or otherwise evades foreign exchange controls, the relevant foreign exchange administrative authority shall order the organization or individual concerned to remit the foreign exchange funds involved back to China within a specified period of time and impose a fine of up to 30 % of the foreign exchange amount for which foreign exchange controls have been evaded. Where the circumstances of the case are serious, a fine of between 30% and 100% of the foreign exchange for which foreign exchange controls have been evaded shall be imposed on the organization or individual concerned. Where the circumstances constitute a crime, the organization or individual concerned shall be pursued for criminal liability in accordance with the law.


Article 40 Where any organization or individual violates applicable provisions by receiving or making payments in foreign exchange which should have been made in Renminbi, purchases foreign exchange with false or invalid transactional documents or other documents from any financial institution engaged in foreign exchange settlement and sales business, or purchases foreign exchange through other illegal means, the relevant foreign exchange administrative authority shall order the organization or individual concerned to convert the funds used for the illegal purchase of foreign exchange back into the original currency and impose a fine of up to 30% of the amount of foreign exchange illegally purchased. Where the circumstances of the case are serious, a fine of between 30% and 100% of the amount of foreign exchange illegally purchased shall be imposed on the organization or individual concerned. Where the circumstances constitute a crime, the organization or individual concerned shall be pursued for criminal liability in accordance with the law.


Article 41 Any organization or individual that transfers foreign exchange into China in violation of applicable provisions shall be ordered to take appropriate remedial action by the relevant foreign exchange administrative authority and fined up to 30% of the illegal amount involved. Where the circumstances of the case are serious, a fine of between 30% and 100% of the illegal amount involved shall be imposed on the organization or individual concerned.
Any organization or individual that settles a foreign exchange transaction by illegal means shall be ordered to convert the funds used illegally back into the original currency by the relevant foreign exchange administrative authority and fined up to 30% of the illegal amount involved.


Article 42 Where any individual, in violation of applicable provisions, enters or leaves China carrying foreign exchange, the relevant foreign exchange administrative authority shall give him a warning and may impose a fine of up to 20% of the illegal amount involved. Where any law or administrative regulations provide(s) that a fine should be imposed by the customs authorities, such provisions shall be followed.

Article 43 Where any organization or individual, without the required approval, provides an overseas loan, issues bonds overseas, provides an overseas guarantee or otherwise violates foreign debt administrative provisions, the relevant foreign exchange administrative authority shall give the organization or individual concerned a warning and impose a fine of up to 30% of the illegal amount involved.


Article 44 Where any organization or individual, in violation of applicable provisions, changes the purpose for which foreign exchange or foreign exchange settlement funds are to be used without the required approval, the relevant foreign exchange administrative authority shall order the organization or individual concerned to take appropriate remedial action, confiscate any illegal income and impose a fine of up to 30% of the illegal amount involved. Where the circumstances of the case are serious, a fine of between 30% and 100% of the illegal amount involved shall be imposed on the organization or individual concerned.
Where any organization or individual uses any foreign currency for price calculation or settlement purposes or otherwise illegally transfers or uses foreign exchange, the relevant foreign exchange administrative authority shall order the organization or individual concerned to take appropriate remedial action and issue a warning, and may impose a fine of up to 30% of the illegal amount involved.


Article 45 Where any organization or individual, without permission, trades foreign exchange either directly or indirectly, resells foreign exchange at a profit or illegally acts as an intermediary for foreign exchange trading, and the amount of foreign exchange involved is large, the relevant foreign exchange administrative authority shall give the organization or individual concerned a warning, confiscate any illegal income and impose a fine of up to 30% of the illegal amount involved. Where the circumstances of the case are serious, a fine of between 30% and 100% of the illegal amount involved shall be imposed on the organization or individual concerned. Where the circumstances constitute a crime, the organization or individual concerned shall be pursued for criminal liability in accordance with the law.


Article 46 Where any organization or individual, without the required approval, engages in foreign exchange settlement or sales business, the relevant foreign exchange administrative authority shall order the organization or individual concerned to take appropriate remedial action and, where any illegal income has been received, confiscate such illegal income. Where the illegal income amounts to no less than CNY500,000, the relevant foreign exchange administrative authority shall impose a fine of between one and five times the amount of illegal income involved. Where no illegal income has been received or the illegal income involved is no more than CNY500,000, a fine of between CNY500,000 and CNY2,000,000 shall be imposed on the organization or individual concerned. Where the circumstances of the case are serious, the relevant competent authority shall order the organization or individual concerned to suspend its business for appropriate remedial action to be taken or revoke its business license. Where the circumstances constitute a crime, the organization or individual concerned shall be pursued for criminal liability in accordance with the law.
Where any organization or individual engages in any foreign exchange business other than foreign exchange settlement or sales business without the required approval, the relevant foreign exchange administrative authority or the relevant banking regulatory authority shall penalize the organization or individual concerned in accordance with the provisions of the preceding paragraph.


Article 47 Where any financial institution falls within any of the following circumstances, the relevant foreign exchange administrative authority shall order it to take appropriate remedial action within a specified period of time, confiscate any illegal income, and impose a fine of between CNY200,000 and CNY1,000,000; where the circumstances of the case are serious or no remedial action is taken within the period of time specified, the foreign exchange administrative authority shall order it to cease handling the relevant business:
1. Where, in handling receipts and payments of funds on current account, it fails to examine in a reasonable manner the truthfulness of transactional documents and the consistency of such documents with the relevant international receipts and payments;
2. Where it handles receipts and payments of funds on capital account in violation of applicable provisions;
3. Where it handles foreign exchange settlement or sales business in violation of applicable provisions;
4. Where it violates provisions relating to the administration of foreign exchange business on an overall position basis; or
5. Where it violates provisions relating to the administration of foreign exchange market transactions.


Article 48 Where any organization or individual falls within any of any of the following circumstances, the relevant foreign exchange administrative authority shall order the organization or individual concerned to take appropriate remedial action and issue a warning, and may fine an organization up to CNY300,000 or an individual up to CNY50,000:
1. Where it or he fails to produce statistical reports with respect to international receipts and payments in accordance with applicable provisions;
2. Where it or he fails to submit its or his financial reports, statistical statements or other information in accordance with applicable provisions;
3. Where it or he fails to submit valid documents in accordance with applicable provisions or submits inaccurate documents;
4. Where it or he violates provisions relating to the administration of foreign exchange accounts;
5. Where it or he violates provisions relating to the administration of foreign exchange registrations; or
6. Where it or he refuses to accept or obstructs any supervisory and inspection activities or investigation conducted by the foreign exchange administrative authorities in accordance with the law.


Article 49 Where any domestic organization violates provisions relating to foreign exchange administration, in addition to the penalties to be imposed in accordance herewith, the principal person directly responsible for the violation and any other person directly responsible shall be penalized. Directors, supervisors and officers directly responsible for financial institutions that violate such provisions and other persons directly responsible shall be given a warning and fined between CNY50,000 and CNY500,000. Where the circumstances of the case constitute a crime, the foregoing persons shall be pursued for criminal liability in accordance with the law.

Article 50 Where any staff member of a foreign exchange administrative authority misuses his position for personal gain, abuses his powers or neglects his duties and the circumstances of the case constitute a crime, he shall be pursued for criminal liability in accordance with the law. Where the circumstances of the case do not constitute a crime, he shall be penalized in accordance with the law.

Article 51 Any party that is dissatisfied with any specific administrative order made by the foreign exchange administrative authorities may apply for an administrative review in accordance with the law. Any party who is dissatisfied with a decision made at the administrative review stage may file an administrative action in a people's court in accordance with the law.

Chapter VIII Supplementary Provisions

Article 52 The following terms as used herein have the following meanings:
1. The term "domestic organizations" refers to state organs, enterprises, public institutions, social groups, military units and other organizations within the territory of the People's Republic of China with the exception of the consulate agencies of any foreign country stationed in China and the representative offices of any international organization situated in China.
2. The term "domestic individuals" refers to Chinese citizens and foreign individuals who have resided with the territory of the People's Republic of China for one full year with the exception of foreign diplomats in China and the representatives of any international organization in China.
3. The term "current account" refers to any transaction account for international receipts and payments involving goods, services, earnings and frequent transfers.
4. The term "capital account" refers to any transaction account for international receipts and payments that result in any change in external assets and liabilities, including, inter alia, capital transfers, direct investments, securities investments, derivatives and loans.


Article 53 Any non-financial institution that seeks to engage in foreign exchange settlement and sales business shall obtain an approval from the State Council foreign exchange administrative department. The specific measures for such approvals shall be formulated separately by the State Council foreign exchange administrative department.

Article 54 These Regulations shall come into effect as of the date of promulgation.