(Approved by the People's Bank of China on August 1, 1991 Promul-gated by the State Administration of Exchange Control on September 26,1991)
(Approved by the People's Bank of China on August 1, 1991 Promul-gated by the State Administration of Exchange Control on September 26,1991)
Whole Doc.
Chapter 1 General Provisions
Article 1
With a view to strengthening the administration of international
commercial loans, these Procedures are formulated in accordance with the
Provisional Regulations for Exchange Control of the People's Republic of
China and the relevant regulations of the State Council.
Article 2
The international commercial loans refer to the loans raised by those
institutions resident in China, and with a contracting duty of repayment
in foreign currency, from the banks as well as other financial
institutions, enterprises and individuals abroad, from foreign banks,
Sino-foreign joint venture banks, and other foreign or Sino-foreign joint
venture financial institutions resident in China. These include ordinary
foreign exchange commercial loans, buyer's credit, foreign exchange loans
under the categories of processing with supplied materials, drawings and
samples, assembling with supplied parts, and compensation trade; those
under the categories of international financial leasing, and foreign
exchange loans in other forms.
The domestic institutions who may gain access to the international
commercial loans are limited only to:
(1) the financial institutions engaging in the borrowing business
abroad with the approval by the State Administration of Exchange Control.
(2) the approved industrial and trade enterprises or conglomerates.
Article 3
The People's Bank of China is the institution in charge of the
examination and approval of the international commercial loans. The
People's Bank of China authorizes the State Administration of Exchange
Control and its local branch offices to be specifically responsible for
the examination, approval, supervision and administration of the
international commercial loans.
Chapter 2 Medium and Long-term International Commercial Loans
Article 4
The medium and long-term international commercial loans refer to
those lasting more than 1 year (1 year excluded).
Article 5
The medium and long-term international commercial loans which the
domestic institutions intend to borrow must be listed in the foreign fund
utilization plans of the State.
Article 6
The medium and long-term international commercial loans should be
used to introduce advanced technical equipment, to enhance the capability
of foreign exchange earnings, and should be in line with the foreign fund
utilization policies of the State.
Article 7
The domestic institutions must apply to the State Administration of
Exchange Control for the medium and long-term international commercial
loans. Without the approval, the signed agreement on foreign loans are not
effective, and the departments of exchange control will not handle the
registration of foreign debts. The banks are not allowed to open the
foreign exchange accounts for them. The principals and the interest of the
loans are not permitted to be remitted out of China.
Article 8
The borrowing of foreign loans by the national financial institutions
is subject to the examination and approval of the State Administration of
Exchange Control. The regional financial institutions' borrowing, as well
as that made by financial institutions of various provinces, autonomous
regions and municipalities directly under the Central Government is
subject to the verification of the local branch offices of exchange
control, and must be submitted to the State Administration of Exchange
Control for examination and approval. The branch offices of the national
and regional banks, however, can, in this order, apply to the State
Administration of Exchange Control for approval only after being
authorized by their head offices.
Article 9
The domestic institutions should apply to the departments of exchange
control for foreign loans, and should provide the complete or partial
certificates and documents as follows:
(1) certificates that the borrowing of foreign loans is listed in the
foreign funds utilization plans of the State;
(2) approved document on establishment of the borrowing project,
including the usage of the loans and the readiness of the supporting
Renminbi (RMB);
(3) letter of intent on conditions of loans, including the name of
the creditor, the amount of the loans, kind of currency, the interest rate
and other charges and fees, time of validity and grace period, the
intention of advanced repayment and other financial terms;
(4) sources and plans of repayment, and foreign exchange guarantees;
(5) the latest foreign exchange or Renminbi (RMB) assets, the
liabilities and other financial statements of the financial institutions
applying for foreign loans;
(6) the branch offices of the banks borrowing foreign loans have to
provide the re evant authorized documents of their head offices;
(7) for foreign exchange loans under the categories of processing
with supplied materials, drawings and samples, assembling with supplied
parts and compensation trade, the relevant approved documents of the
departments of foreign economic relations and trade are to be provided;
(8) other relevant documents that the departments of exchange control
deem necessary.
Article 10
The medium and long-term international commercial loans can not be
used as Renminbi (RMB) loans mortgaged by foreign exchange, nor can they
enter into the foreign exchange swap market. If the loans, in special
circumstances, need to enter into the foreign exchange swap market, the
approval by the State Administration of Exchange Control is needed.
Chapter 3 Short-term International Commercial Loans
Article 11
The short-term international commercial loans refer to those lasting
less than 1 year (1 year included).
Article 12
The departments of exchange control exercise the balance control of
the short-term international commercial loans.
Article 13
The national financial institutions' application for the quotas of
the balance control of the short-term international commercial loans is
subject to the ratification and the allocation by State Administration of
Exchange Control (short-term quota for short). The branch offices of the
banks may apply to their head offices for short-term quotas, and their
borrowing of short-term international commercial loans is to be submitted
by their head offices to the State Administration of Exchange Control for
approval. The local departments of exchange control in the region where
the branch offices of the banks are located are responsible for the
supervision and administration.
Article 14
The regional banks and non-banking financial institutions of various
provinces and cities may apply to the highest local branches of exchange
control for short-term quotas, and the highest provincial branches of the
State Administration of Exchange Control examine and approve the
application within the short-term quotas ratified and allotted by the
State Administration of Exchange Control.
Article 15
Of raising circulating fund of foreign exchange for export purpose,
the State-owned enterprises' and conglomerates' direct borrowing of
onetime short-term international commercial loans must be submitted to the
State Administration of Exchange Control for approval item by item before
they can negotiate and sign agreements on the loans. Without the approval,
they are not allowed to gain access to the foreign loans directly.
Article 16
The short-term quotas are subject to the annual readjustment of the
State Administration of Exchange Control. The financial institutions'
monthly average remaining sum of the short-term international commercial
loans should not exceed the ratified short- term quotas.
Article 17
The short-term international commercial loans can only be used as the
circulating fund for export purpose, and these loans are not allowed to be
used as the investment in the long-term projects, as the fixed assets
loans or for other improper purposes.
Chapter 4 Supplementary Provisions
Article 18
After the domestic institutions signed agreements on international
commercial loans, they must go through the formalities of foreign debt
registration with the departments of exchange control according to the
Provisional Regulations for Statistics and Supervision of External Debt.
Article 19
The international commercial loans borrowed by the domestic
institutions should be transferred into China, and are not allowed to be
deposited abroad, nor can the direct payment be made abroad, without the
approval by the departments of exchange control.
Article 20
The principle of "who borrows, who makes repayment" is adopted in the
repayment of international commercial loans. The following foreign
exchanges can be used to repay the principals and interest of the
international commercial loans:
(1) the newly increased foreign exchange earnings from exporting the
products by using the international commercial loans and from non-trade
foreign exchange earning projects.
(2) the foreign exchange earning from the newly development project
by using the international commercial loans.
(3) the retained foreign exchange and the foreign exchange of their
own.
(4) other foreign exchanges agreed by the departments of exchange
control.
Article 21
The domestic institutions using the international commercial loans
should, under the condition of not enlarging the amount of foreign debt,
take the initiative to actively guard against the foreign debt risks
according to the changes of the exchange and interest rates on the world
market.
Article 22
The domestic institutions using the international commercial loans
should provide the departments of exchange control with a report on the
economic efficiency of the loans used in the previous year by the end of
March each year.
Article 23
The departments of exchange control will impose, as the case may be,
the penalty of warning fining, or abolishing of the right of borrowing
foreign loans to those domestic institutions who violate the relevant
regulations, and punish them according to the Detailed Implementating
Rules for the Punishment on Violation of Exchange Control.
Article 24
These Procedures, except Article 18, do not apply to foreign-funded
enterprises' direct borrowing of international commercial loans.
Article 25
These Procedures shall be subject to the interpretation of the State
Administration of Exchange Control.
Article 26
These Procedures shall come into force on the date of promulgation.
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