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| Forex
funding Settlement for Businesses with Foreign Investment
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| Ⅰ.Definition
of Transaction & Materials for Examination |
Definition
of Transaction
Forex funding settlement means converting the funding directly invested by foreign businesses into RMB.
Materials to Be Examined:
1. Banks not authorized should proceed with the strength of "Approval Instrument of SAFE for Foreign Exchange Dealings under funding Account".
2. Authorized banks should review the following materials:
A. Application of Enterprise with Foreign Investment for Forex funding Settlement (registered funding account number, paid-up status, currency of settlement, amount, purposes, etc.)
B. Foreign exchange registration certificate (return the original copy after verification and keep the copy); payment certificates justifying the purposes of the RMB funding obtained from the forex settlement
C. Payment certificates justifying the purposes of the RMB funding obtained from the forex settlement (valid documents, such as purchase contract, property lease, land acquisition agreement, project contract, or invoices of the prescribed period of time, etc)
D. Written order of payment.
C & D are applicable when the amount of forex settlement exceeds USD200,000 (exclusive of USD200,000).
Ⅱ.Administrative Requirements
1. For large amounts above USD200,000 (exclusive), the RMB funding after the settlement in principle should not be reckoned into the RMB account, but directly wired into the designated payee's account by the institution implementing the settlement according to the order of payment.
2. For small amounts of USD200,000 or below, the RMB funding from the settlement can be reckoned into the RMB account. When applying for the next forex settlement, the enterprises should provide the detailed list for the uses of the funding from the previous settlement. The institution handling the transaction should check whether the payments listed tally with the actual payments and whether the RMB funding has been used up. When the verification proves everything right, it may execute the forex funding settlement.
3. The bank should strictly observe the range of income and upper limit of amount? as ratified by SAFE when performing funding account entry, and should provide the bank reconciliation statement for the funding account based on the forex settlement need of the enterprise; in case any irregularity is found out in account entry and forex settlement, the bank should report it timely to SAFE.
4. After the forex funding settlement, the bank as authorized by SAFE should, within 3 working days after the current month, submit to SAFE, via the platform for balance of international payments, the "Statistic Form of Forex funding Settlement under Foreign Investment Account" of the said previous month. |
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