24 Nov 2003

Article 1. This set of Measures, formulated in accordance with the Law of the People's Bank of China of the People's Republic of China, Administrative Rules of Foreign Exchange of the People's Republic of China, Administrative Rules of Foreign Exchange Settlement, Sales and Payment, Provisional Measures Governing the Handling of Foreign Exchange Settlement and Sales by Designated Foreign Exchange Banks, and other related provisions, aims to standardise the activities of foreign exchange agencies and uphold the market order.

Article 2. Foreign exchange agencies mentioned in this set of Measures refer to domestic corporate juridical persons (hereinafter referred to as foreign exchange agencies) having signed contracts with commercial banks and their branches inside China (hereinafter referred to as banks) with qualifications to undertake foreign exchange business (or foreign exchange settlement and sales), and being authorised by the banks to handle foreign exchange operations.

Article 3. Types of foreign exchanges handled by the foreign exchange agencies are limited to freely convertible foreign exchange cash and travellers' cheques.

Foreign exchange operations of foreign exchange agencies are limited to buying foreign exchange and foreign exchange travellers' cheques from domestic individual residents and non-resident individuals with RMB.

In cases where non-resident individuals want to change RMB exchanged with foreign exchange agencies into foreign exchange, they need to go to the banks that have authorised the foreign exchange operations to the foreign exchanges agencies with which they have exchanged their foreign exchanges. The amount of exchange should be no higher than the original foreign exchange and the business should be performed within six months after the last foreign exchange transaction.

An individual resident is not allowed to change RMB back into foreign exchange.

Article 4. The State Administration of Foreign Exchange and its branches are responsible for the supervision and administration over foreign exchange operations of foreign exchange agencies authorised by banks.

Article 5. Headquarters of banks need to formulate unified management system and risk control systems for handling foreign exchange operations by contract within their systems.

Authorising banks shall, in line with the management system and risk control system of their headquarters, formulate administrative regulations and working procedures, including administration of the list price of foreign exchange of foreign exchange agencies, management of settlement of foreign exchange operations, obtaining, use, nullification, and verification of bill for foreign exchange operations, management of risk control and division of liabilities of losses, and dispute settlement incurred from exchanges, management of RMB and foreign exchange inventory quota, and management of persons involved in foreign exchange operations.

Article 6. When authorising foreign exchange agencies to carry out foreign exchange operations, banks shall sign written contracts with the foreign exchange agencies specifying the authorisation, the rights and obligations of parties to the contract, and principles of dispute settlement. The contracts shall be submitted to the local branches of SAFE. Written contracts shall include items specified in article 5 of this set of Measures, including administrative rules and working procedures. Foreign exchange agencies are not allowed to handle foreign exchange operations before the contracts signed have been put for record and confirmed.

Article 7. Authorising banks shall submit the following documents when handling the formalities related to record-filing:

1. unified management system and risk control system for handling foreign exchange operations by contract within the system formulated by the headquarters;

2. application for authorising foreign exchange agencies to handle foreign exchange operations;

3. basic information of the foreign exchange agencies to be authorised;

4. administrative rules governing authorisation to handle foreign exchange operations;

5. signed written contracts of authorisation of foreign exchange operations;

6. foreign exchange settlement bill and sample of official business seals of foreign exchange agencies.

Local branches of SAFE shall issue a letter of confirmation or rejection within 30 days upon receipt of the above-mentioned materials. Those rejected will be given reasons behind rejection. Authorising banks shall not file an application for record-filing of the same content within 6 months starting from the day of receiving the rejection letter from the local branches of SAFE.

Article 8. Business sites of foreign exchange agencies shall be located in principle around ports, airports, stations, tourist sites, border ports, major business centres, hotels and restaurants open to foreigners and densely populated places.

Article 9. Foreign exchange agencies shall meet the following terms and conditions in order to handle foreign exchange operations:

1. having domestic juridical person qualifications;

2. having fixed business sites;

3. having at least 2 working staff specialised in foreign exchange operations and who have passed training organised by authorising banks;

4. having equipment or corresponding facilities capable of receiving foreign exchange list prices from authorising banks accurately and without delay;

5. other terms and conditions specified by authorizing banks.

Article 10. A foreign exchange agency shall normally sign a contract of authorisation of foreign exchange operations with one bank within a city, and not enter into contracts with more than one bank or banks authorising foreign exchange operations located not within the city where it is located. 

A foreign exchange agency may specify with the contracting bank that more than one business site of foreign exchange may be opened.

Article 11. In cases where a bank terminates the contract with a foreign exchange agency on authorisation of foreign exchange operations, it shall file a record with the local branches of SAFE within 10 days upon the termination of the contract.

Article 12. Foreign exchange agencies shall hang the nameplate of "Foreign Exchange Agency of xx Bank (name of authorising bank)" in a prominent place in the course of conducting foreign exchange operations and the pattern of nameplate will be standardised by the authorising bank.

Article 13. Foreign exchange agencies shall handle foreign exchange business in line with the administrative rules on list price of foreign exchange operations formulated by authorising banks and make known the foreign exchange listed price at prominent places of their business sites.

Article 14. Foreign exchange operations of foreign exchange agencies shall be calculated and entered into accounts separately.

Article 15. Foreign exchange agencies shall use a bill of foreign exchange when conducting foreign exchange operations and not use other bills instead. A bill of foreign exchange shall be provided and managed by the authorising banks.

The bill of foreign exchange shall specify the following content but not be limited to that, name of client, nationality of client, type and number of certificates, date of exchange, type of foreign currency, amount of foreign currency and RMB, listed price of foreign exchange.

The bill of foreign exchange kept by the foreign exchange agencies shall be signed by the client and stamped by persons handling the exchange. When using the bill of foreign exchange, the foreign exchange agencies shall have three copies of the bill together with three carbon copies and give one to the client, one to the authorising bank, and one to the foreign exchange agency for accounting. Authorizing banks and foreign exchange agencies shall keep the bill of foreign exchange for five years for future reference. 

When conducting foreign currency conversion into RMB for domestic residents, foreign exchange agencies shall record on the bill of foreign exchange the words "Not Allowed to Conduct Purchase Back".

Article 16. Foreign exchange agencies shall abide by the administrative systems of the authorising banks on the preservation, handing-in and inventory quota of foreign exchange.

Foreign exchange inventory quota of foreign exchange agencies are determined by the authorising banks and shall not in principle exceed the amount of US$10,000 or an equivalent amount upon the completion of a business day.

Article 17. Authorising banks are responsible for the business training of foreign exchange agencies' personnel.

Foreign exchange agencies' personnel shall meet the following terms and conditions:

1. ability to distinguish foreign currency cash and travellers' cheques ;

2. corresponding knowledge of laws and regulations on foreign exchange;

3. other ability required by the internal control system of authorising banks.

Article 18. Authorising banks shall, in line with the Method of Statistics and Declaration of International Balance of Payment and related regulations and related statistics reporting system of foreign exchange settlement and sales of banks, combine the information of foreign exchange operations conducted by authorised foreign exchange agencies with their foreign exchange operations and implement their obligations of declaration of statistics.

Article 19. Authorising banks shall supervise foreign exchange agencies' handling of foreign exchange operations in accordance with the business contracts signed, and rectify without undue delay such violations on the part of foreign exchange agencies as failing to use the bill of foreign exchange as requested, violating the administrative rules on listed price of foreign exchange, and other acts of violations, and report to the local branches of SAFE.

Article 20. In cases where any of the following acts have been found to occur in the operations of the authorising banks and foreign exchange agencies, the local branches of SAFE are responsible for imposing punishments:

1. in cases where foreign exchange agencies start to conduct foreign exchange operations before submitting the related information of the handling of foreign exchange operations to the local branches of SAFE for record-keeping, the local branches of SAFE should impose punishment on the authorising banks and foreign exchange agencies in line with the provisions of article 41 of the Administrative Rules of Foreign Exchange of the People's Republic of China;

2. in cases where the setting of the listed price of foreign exchange is in violation of the regulations on foreign exchange management, the local branches of SAFE shall impose punishment in line with the provisions of article 43 of the Administrative Rules of Foreign Exchange of the People's Republic of China;

3. in cases where the authorising banks fail to supervise foreign exchange agencies in their use of the bill of foreign exchange when conducting foreign exchange operations, the local branches of SAFE shall impose punishment on the authorising banks in line with the provisions of article 42 of the Administrative Rules of Foreign Exchange of the People's Republic of China and article 40 of the Provisional Measures Governing the Handling of Foreign Exchange Settlement and Sales by Designated Foreign Exchange Banks.

4. in the case of other violations on the part of authorising banks and foreign exchange agencies, the local branches of SAFE shall impose punishment in line with the related regulations.

Article 21. Foreign exchange agencies established before the implementation of this set of Measures shall have their authorising banks apply to the local branches of SAFE to make up for the record-keeping formalities in line with the provisions of this set of Measures within two months, starting from the day of implementation of this set of Measures.

Article 22. This set of Measures shall enter into force as of November 1, 2003.