Wednesday, September 9, 2015

Report from China: Making Further Efforts to Streamline Foreign Exchange Administration Regulations to Promote Trade and Investment Facilitation

(Source: China State Administration of Foreign Exchange Sept 1, 2015)  To further enhance the transparency of foreign exchange administration policies, the State Administration of Foreign Exchange (SAFE) has reinforced legislations in key areas and streamlined regulations since the beginning of 2015, involving cross-border foreign exchange payment business through payment institutions, direct investment, settlement of foreign exchange capital, overseas loans under domestic guarantees for non-bank institutions, foreign exchange administration for insurance business, overseas disposal of non-performing assets by financial asset management companies, franchise domestic and foreign currency exchange business for individuals and foreign currency exchange business. Meanwhile, the SAFE has rescinded and announced invalid some foreign exchange administrative regulations that do not adapt to the requirements of the reform. To facilitate public enquiry and application, the SAFE then upgraded the Catalogue of Major Existing Laws and Regulations in Effect on Foreign Exchange Administration (Catalogue) and released it at its official website. 

The upgraded Catalogue contains 231 policies, laws and regulations on foreign exchange administration released as of June 30, 2015, which fall into 8 categories including general foreign exchange administration, foreign exchange administration under the current account, foreign exchange administration under the capital account, regulation of the foreign exchange business of financial institutions, the RMB exchange rate and the foreign exchange market, balance-of-payments and foreign exchange statistics, foreign exchange inspections and application of the laws and regulations, and the scientific administration of foreign exchange, and several sub-categories by specific business type.

The SAFE will make further efforts to build and improve a long-term mechanism for sorting out laws and regulations, and streamline and upgrade the Catalogue regularly to enhance policy transparency, facilitate banks, companies, and individuals to understand and apply foreign exchange administrative regulations and promote law-based foreign exchange administration.

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