Notice on Optimizing Foreign Exchange Administration and Supporting Foreign Business Development

For the purposes of further optimizing the administration of foreign exchange business, improving foreign exchange services, and enhancing the level of facilitation of cross-border trade and investment, the State Administration of Foreign Exchange (“SAFE”) issued the Notice on Optimizing Foreign Exchange Administration and Supporting Foreign Business Development on April 14, 2020 (Hui Fa No. 8 [2020]). If the previous regulations are inconsistent with this notice, this notice shall prevail.

1.       Optimizing the Administration of Foreign Exchange Business

(1)	Promote the facilitation reform on receipts and payments under capital account nationwide. Eligible enterprises are allowed to use capital accounts receipts sourced from capital funds, foreign debts and overseas listings for domestic payment without providing banks with authenticity certification materials on a transaction-by-transaction basis in advance, on the premise of ensuring that the use of funds is in compliance with the current regulations on the use of capital account receipts.
(2)	Cancel the business registration for special return of foreign exchange remittance. An enterprise under Category A in the directory of enterprises with foreign exchange receipts and payments in goods trading may directly return foreign exchange of one single transaction in sum of no more than 50,000 US dollars or its equivalent with a financial institution without undergoing registration formalities with the foreign exchange authority in advance, provided that the interval between the date of refund and the date of original receipt or payment is more than 180 days or foreign exchange cannot be returned through the original route due to special circumstances.
(3)	Simplify the businesses registration management on part of capital accounts. Delegate the cancellation registration of eligible domestic guarantees for foreign loans and overseas loans to the bank for processing. When the non-financial enterprise's onshore guarantee foreign loan liability has been discharged and no onshore guarantee foreign loan performance has occurred, it can go to the bank under the jurisdiction of its branch (Foreign Exchange Management Department) to directly go through the cancellation registration of the onshore guarantee foreign loan. When the time limit for overseas loans by non-financial enterprises expires and the principal and interest of overseas loans are normally recovered, they can go to the bank under the jurisdiction of their branch (Foreign Exchange Management Department) to directly apply for the cancellation of overseas loan registration.
(4)	Relax domestic foreign exchange loans with export background to purchase foreign exchange repayment. Where domestic foreign exchange loans such as export bills enter the current account foreign exchange settlement account and handle foreign exchange settlement in accordance with regulations, the enterprise shall, in principle, repay it with its own foreign exchange or export proceeds from trade in goods. When the export of the enterprise is indeed unable to collect foreign exchange on schedule and there is no other foreign exchange fund available to repay the above-mentioned domestic foreign exchange loan, the lending bank may follow the principle of prudent development to handle the repayment of foreign exchange purchases for the enterprise and report to the local foreign exchange bureau within 5 working days at the beginning of each month report relevant information.

2.      Improving Foreign Exchange Business Services

(1)	Facilitate the use of electronic documents for foreign exchange business. Where a bank handles foreign exchange receipts and payments for trade in goods by reviewing electronic documents in accordance with regulations, the conditions for Class A enterprises and two years of establishment shall be cancelled. Where a bank deals with foreign exchange receipts and payments for enterprises with service trade, primary income, and secondary income in accordance with regulations by reviewing electronic documents, the enterprises may not print electronic transaction documents. When the bank handles the personal foreign exchange settlement and sale business, it is not necessary to print the Foreign Exchange Settlement/Purchase Notice.
(2)	Optimize the bank's cross-border e-commerce foreign exchange settlement. Support more banks to provide cross-border e-commerce market entities with foreign exchange settlement and sales and related fund receipt and payment services based on transaction electronic information, in accordance with relevant regulations, under conditions of transaction information collection and authenticity review.
(3)	Relax business review and endorsement procedures. When reviewing foreign exchange receipts and payments under current accounts in accordance with regulations, financial institutions can independently decide whether to endorse the amount and date of receipts and payments of foreign exchange and affix business seals on the original documents based on internal control requirements and actual business needs, and in accordance with the principle of substantial compliance, but need to keep the audit materials for future reference in accordance with current regulations.
(4)	Support banks to innovate financial services. Encourage banks to scientifically evaluate corporate credit status through multiple methods, differentiate and classify companies that have difficulties in foreign-related receipts and payments due to objective and uncontrollable factors, and extend loans and simplify procedures for foreign exchange loans for small, medium, and micro foreign companies with good development prospects. Support banks to use the information such as corporate credit, receipt and payment exchange rates and other information open on the digital foreign management platform to carry out compliance