(Promulgated by the State Administration of Exchange Control onNovember 10, 1989)

(Promulgated by the State Administration of Exchange Control onNovember 10, 1989) Whole document RULES FOR THE IMPLEMENTATION OF REGISTRATION OF EXTERNAL DEBTS (Promulgated by the State Administration of Exchange Control on November 10, 1989) Article 1 These Rules are formulated in order to implement the Interim Provisions for the Statistical Work and Supervision of External Debts (hereinafter referred to as the Provisions).

Article 2 External debts refer to any liabilities resulting from borrowing abroad for which contractual repayments in foreign currencies are required. They include: (1) Loans from international monetary institutions, namely, loans from the International Monetary Fund, the World Bank, the Asian Development Bank, the International Agriculture Development Fund and other international or regional monetary institutions; (2) Loans from foreign governments, namely, loans provided by foreign governments in the form of official development assistance to China; (3) Loans from foreign banks and non-bank financial institutions, namely, loans from banks, non-bank financial institutions and syndicates which operate outside China; (4) Buyer's credit, namely, loans provided by foreign banks offering export credit for Chinese importing departments or banks to buy equipment from exporting countries; (5) Foreign enterprise loans, namely, loans provided by foreign enterprises that are not financial institutions; (6) Issuance of foreign currency bonds, which refer to bonds with denomination values in foreign currencies issued by domestic institutions on money markets outside China; (7) International monetary leasing, namely, leases of a fund-raising nature provided by foreign leasing institutions for domestic institutions; (8) Delay payment, which refers to a preferential term offered by foreign exporters to domestic importing departments for the importers to pay for the goods with a delay of 3 months after the goods have arrived in China; (9) Liabilities arising in compensation trade to be repaid directly in cash, namely, liabilities to be repaid in cash as is stipulated in compensation trade contracts or liabilities for which repayment is altered to be in cash instead of in kind (goods) due to certain reason and with approval, including liabilities to be repaid with export earnings in foreign exchange.

(10) External debts in other forms, including: ¢Ù Foreign currency deposits in domestic monetary institutions by institutions or individuals abroad; ¢Ú Loans obtained by domestic enterprises (including foreign investment enterprises) from foreign or Chinese-foreign joint-venture banks which operate in China. Apart from all these, also regarded as external debts are the following: ¢Ù Liabilities transferred into China in various forms by externally registered institutions, which are to be repaid by domestic institutions; ¢Ú External liabilities of Chinese institutions based abroad without external registration; ¢Û Foreign loans borrowed by a foreign investment enterprise in the name of the foreign side of the enterprise to be used as input in funds or equipment outside the capital investment, which are to be repaid by the enterprise as is required by a contract signed between the foreign side and the enterprise or any other legal documents; ¢Ü Liabilities of a foreign debtor for whom a Chinese side has provided guarantee, and for which the repayment is to be actually made by the Chinese side; ¢Ý Liabilities owned by a wholly foreign-owned enterprise to its parent company.

Article 3 The State Administration of Exchange Control and its branch offices are the departments in charge of the registration and administration of external debts in the country (hereinafter referred to as the registering departments). The State Administration of Exchange Control takes charge of the registration of external debts incurred by the ministries and commissions under the State Council, corporations, banks and head offices of non-bank financial institutions, which are all based in Beijing, and its branch offices in localities take charge of the registration of external debts incurred by local governments, monetary institutions, as well as units of central departments and head offices of monetary institutions based in localities.

External debts incurred by a Chinese institution based abroad without external registration shall be registered by the administration of exchange control of the locality where the externally based Chinese institution's parent institution is situated.

Article 4 The registration of external debts is divided into case-by-case registration and regular registration.

Regular registration applies to external debts incurred by domestic banks and non-bank financial institutions, and loans offered by foreign governments and international monetary institutions which fall respectively under the administration of the Ministry of Foreign Economic Relations and Trade, the People's Bank of China, the Ministry of Agriculture and the Bank of China.

Case-by-case registration applies to external debts incurred by domestic departments other than those governed by regular registration, and by enterprises (including foreign investment enterprises).

External debts incurred by monetary institutions as entrusted by enterprises and other institutions are to be registered with the debtors stipulated in the borrowing contracts handling the procedures for registration.

Article 5 The procedures for regular registration are as follows: (1) A debtor unit shall, within 15 days after the first contract on borrowing is signed, go through registration procedures at the local administration of exchange control, and receive an External Debts Registration Certificate (herein-after referred to as the Registration Certificate) for regular registration.

(2) When new contracts on borrowing are signed or alterations such as drawing and repayment occur in the debt, a debtor unit shall fill in monthly a form of the Signing of Contract on External Debts and a Form of Feedback on the Alterations of External Debts (hereinafter referred to as the Form of Feedback) registering department within 5 days after the end of the month.

(3) When a debtor unit needs to open a foreign exchange cash account with a bank, the unit shall, by submitting the Registration Certificate and a document approving the opening of the account from the registering department, go through the necessary procedures for opening a special foreign exchange cash account relating to external debts (hereinafter referred to as a special account for external debts) as an appointed bank with which such an account is opened (hereinafter referred to as the account opening bank), and send the receipt by mail the following day to the registering department.

Article 6 The procedures for case-by-case registration are as follows: (1) The debtor unit shall, within 15 days after a contract on borrowing is signed, go through the procedures for the registration of external debts by submitting a duplicate copy of the contract and the document of approval for the borrowing (such a document of approval is not necessary for foreign investment enterprises) at the registering department, and receive a Registration Certificate for case-by-case registration.

(2) When the borrowed funds are transferred into Chinese territories, the debtor unit shall, with the remittance instruction and the Registration Certificate, open a special account for external debts at the account-opening bank, and go through the procedures for entering the item into the account.

(3) When due repayment of principal and payment of interest are to be made, the debtor unit shall, by submitting the Registration Certificate and the instruction on repaying the principal and paying the interest, get a document approving the repayment of principal and payment of interest from the registering department in advance, and go through necessary procedures at the account-opening bank for the repayment of principal and payment of interest to be remitted out of the special account for external debts by submitting the document of approval and the Registration Certificate to the bank.

(4) After receipts and disbursements are handled and the procedures for opening an account are implemented, the debtor unit shall fill in the Form of Feedback in accordance with the instruments of receipts and disbursements issued by the account-opening bank, and file the following day the Form of Feedback and a duplicate copy of the certificate of deposit with the registering department.

(5) A unit incurring a debt in the form of not being transferred into China, from which no cash in foreign exchange is moved in but for which repayment of principal and payment of interest are to be remitted out of China, shall, after the debt has occurred, fill in a Form of Feedback, and send by mail the following day a duplicate copy of the Form of Feedback to registering department. When due repayment of principle and payment of interest are to be made, the debtor unit shall, with the documents of endorsement by the registration department, go the opening bank to open a Special Foreign Currency Account for Repayment of Principal and Payment of Interest Relating to External Debts (herein-after referred to as special account for the repayment of principal and payment of interest) with the account-opening bank, and go through necessary procedures for the remitting of the repayment of principal and payment of interest.

(6) A unit which deposits the borrowed money outside of Chinese territories with approval from the State Administration of Exchange Control or its branch offices shall, through the Form of Feedback, report to the original registering department on the alterations of the deposit in each month.

(7) No other accounts are required to be opened when domestic institutions borrow money from foreign or Chinese-foreign joint venture banks operating in China, but the domestic institutions shall go through the procedures for registration and submit the monthly Form of Feedback as is required by relevant regulations.

(8) When it is necessary for a debtor unit which has received a Registration Certificate in its own locality to go through the procedures for opening an account and making repayment of principal and payment of interest at a bank in another locality, the debtor unit shall, by submitting the Registration Certificate issued by the registering department in its own locality, go through the procedures for approving the repayment of principal and payment of interest as the registering department in the other locality shall, 3 days after the procedures are handled, file the duplicate copies of disbursements with the original registering department.

Article 7 After the last repayment of principal and payment of interest are made for the debt recorded in the Registration Certificate, the account-opening bank shall immediately cancel the Special Account for the Repayment of Principal and Payment of Interest related to the Registration Certificate.

The debtor unit shall return the Registration Certificate within 15 days to the registering department for cancellation.

Article 8 An account-opening bank shall meet the following requirements: (1) It must be a domestic bank which has been approved to deal in foreign exchange; (2) It can cooperate closely with the registering department in the supervision over external debts.

The State Administration of Exchange Control and its branch offices shall appoint account-opening banks in line with the requirements of business.

Article 9 An account-opening bank shall fulfil the following obligations: (1) Supervising the use of the accounts. The bank shall ensure that funds in foreign exchange remitted into the Special Account for External Debts and the Special Account for the Repayment of Principal and Payment of Interest are only the funds recorded in the Registration Certificate, and that funds in foreign exchange deposited in the accounts or transferred from other accounts can only be used to pay for the equipment and labour service of the project related to the debt, for the repayment of principal and payment of interest, or for other usage which has been approved by the registering department; (2) Handling the transferring in and repaying of the debts in line with the Registration Certificate and the document of approval, and filing the instruments of receipts and disbursements with the registering department the following day after the procedures are handled; (3) Supervising external debts under case-by-case registration to ensure that the transferring in of the loans and the repayment of principal and payment of interest all go through the Special Account for External Debts and Special Account for the Repayment of Principal and Payment of Interest.

Article 10 In the event of any one of the following acts of violating these Rules, the local administration of exchange control may impose a fine in RMB on the party concerned, with the amount equivalent to not more than 3 percent of the external debt involved: (1) Intentionally not to go through or to put off the handling of procedures for the registration of external debts; (2) Refusing to submit, or making false registration in, or at least twice delaying the submission of the Form of Feedback to the administration of exchange control; (3) Foreign or altering the Registration Certificate; (4) The fine shall be imposed on both the debtor and the account for External Debts or a Special Account for the Repayment of Principal and Payment of Interest is opened or retained without permission, or when the repayment of principal and payment of interest are not made out of the Special Account for the Repayment of Principal and Payment of Interest.

Article 11 The right to interpret these Rules resides in the State Administration of Exchange Control.

Article 12 These Rules shall go into effect on the day of their promulgation.