(Promulgated by the State Administration of Exchange Control on June 29, 1991)
in accordance with the Provisional Regulations for Exchange Control of the People's Republic of China, these Rules are formulated for the purpose of facilitating the development of the external-oriented economy in the bonded areas of the country.
All foreign exchange receipts and expenditures of the enterprises (Chinese and foreign production enterprises, foreign trade enterprises and storage enterprises - hereinafter referred to as enterprises), administrative organs and individuals in the bonded areas shall be subject to these rules of control.
Enterprises in the bonded areas whose business involves foreign exchange receipts and expenditures must present the documents of approval issued, by their superior administrative departments and the duplicates of other relevant documents to the branch offices of the State Administration of Exchange Control in their localities for the registration and record and accept their supervision and inspection
Enterprises in the bonded areas whose business activities involve foreign exchange receipts and expenditures shall send reports on their foreign exchange transactions to the local exchange control offices as required by the regulations.
Bonded goods under customs surveillance shall be by valued and settled in accounting in foreign currency upon their entering into or leaving the bonded areas.
Non-bonded goods are to be valued and settled in accounting in Renminbi (RMB) upon their entering into or leaving the bonded areas.
The buying and selling of bonded goods between enterprises in the bonded areas and the storage, safekeeping and ransporation of bonded goods shall be valued in foreign currency nd settled through the banks.
All other money payments in the bonded areas than those pecified in the above paragraph shall be valued and settled in Renminbi (RMB).
Enterprises in the bonded areas must promptly transfer back their foreign exchange earnings from their export of commodities and labor and other services to the bonded areas where they located, and deposit them in their foreign exchange accounts at the domestic banks. Their foreign exchange expenditures arising from normal business operations may be disbursed from such accounts.
Chinese-capital enterprises in the bonded areas are permitted to keep their foreign exchange income from business operations in foreign currency to be used as circulating funds. At the end of every year, their net foreign exchange income must be settled separately against trade and non-trade incomes and turn over that part of the revenue due to the state and retain the portion they are entitled to.
Banks and non-bank financial institutions and their branches in the bonded areas must first obtain the prior approval of the State Administration of Exchange Control or local exchange control branch offices before they can do foreign exchange business.
Financial institutions in bonded or non-bonded areas may issue foreign exchange loans to or undertake foreign exchange guarantees for enterprises in the bonded areas.
Enterprises outside the bonded areas may make investments in the bonded areas in foreign currency or Renminbi (RMB). Foreign exchange or Renmimbi (RMB) funds may be remitted into the bonded areas or remitted from the bonded areas back to non-bonded areas for purposes of normal business activity.
Foreign investors making investment in the bonded areas or starting foreign-funded enterprises there shall work in accordance with state regulations for exchange control relating to foreign funded enterprises.
When making investment abroad, enterprises in the bonded areas are subject to state regulations for foreign exchange control relating to making investment abroad.
The raising of foreign exchange funds by enterprises in the bonded areas from foreign-capital and Chinese foreign joint venture banks inside or outside the country are subject to regulations of the state control of foreign debts.
The buying and selling of foreign exchange by enterprises in the bonded areas at the foreign exchange swap centers inside or outside the bonded areas are subject to regulations governing foreign exchange adjustments.
Renminbi (RMB) currency, foreign exchange bills and certificates and precious metals and their products may be brought into the bonded areas from other areas of the country or out of the bonded areas into other areas of the country. Their bringing into or out of the country through the bonded areas is subject to state regulations governing their movement into or out of the country.
It is strictly prohibited to make use of the special treatments accorded by the state to the bonded areas to engage in any activities in violation of the regulations on foreign exchange control.
The State Administration of Exchange Control or its branch offices shall handle the cases of such illegal activities in accordance with the Implementing Rules on Imposing Penalties for Violations of Foreign Exchange Control.
These Rules shall be promulgated by the State Administration of Exchange Control which is responsible for their interpretation. The branch offices of this Administration in certain regions may work out detailed procedures for the implementation of these rules.
The detailed procedures worked out by the branch offices for implementation shall be reported to the head office for approval and then put them into practice.
These Rules shall come into force as of the date of promulgation.
This translation, together with any explanatory material, is provided courtesy of Lehman Tax & Accounting.