This English document is coming from the "LAWS AND REGULATIONS OF THE
This English document is coming from the "LAWS AND REGULATIONS OF THE
PEOPLE'S REPUBLIC OF CHINA GOVERNING FOREIGN-RELATED MATTERS" (1991.7)
which is compiled by the Brueau of Legislative Affairs of the State
Council of the People's Republic of China, and is published by the China
Legal System Publishing House.
In case of discrepancy, the original version in Chinese shall prevail.
Whole Document
IMPLEMENTING RULES ON PUNISHMENT OF VIOLATION OF FOREIGN EXCHANGE
CONTROL
(Approved by the State Council on March 5, 1985, promulgated by
the State Administration of Foreign Exchange Control on April 5, 1985)
Article 1
These Rules are formulated for the implementation of Articles 31 and 33 of
the Interim Regulations for Foreign Exchange Control of the People's
Republic of China.
Article 2
The following acts shall be regarded as unlawful procurement of foreign
exchange:
1) paying in Renminbi for imports or other items that ought to be paid in
foreign exchange, unless otherwise approved by the State Administration of
Foreign Exchange Control or its branch offices
(hereinafter referred to as foreign exchange control agencies), or
stipulated by the State;
2) paying in Renminbi by organizations within territory to defray the
expenses in China for organizations stationed abroad, foreign
organizations stationed in China, enterprises with overseas Chinese
capital, foreign-capital enterprises, Chinese-foreign equity joint
ventures, and individuals coming to China for a short stay, in return for
reimbursement in foreign exchange which is not sold to the State;
3) paying in Renminbi by organizations stationed abroad to defray expenses
with their own Renminbi in China for others in return for reimbursement in
foreign exchange;
4) paying in Renminbi by foreign organizations stationed in China,
enterprises with overseas Chinese capital, foreign-capital enterprises,
Chinese-foreign equity joint ventures and the personnel thereof to defray
expenses for others in return for reimbursement in foreign exchange or in
other forms of a similar nature;
5) making repayments without approval of foreign exchange control agencies
in Renminbi by delegations, working groups or members thereof sent abroad
or to Hong Kong, Macao and other regions, who put to other uses or spend
on purchase of goods the foreign exchange allocated for the mission or
that earned from their various kinds of business operations;
6) offsetting export proceeds or other foreign exchange earnings against
import costs or other expenditures by organizations within territory.
Article 3
Unlawful procurement of foreign exchange shall be penalized according to
different circumstances in the following ways:
1) If the foreign exchange unlawfully procured remains unused, the party
procuring the foreign exchange from others shall be ordered to repatriate
the foreign exchange within a prescribed time limit for a compulsory sale
to the State. If it has been used up, the party concerned must repay it
either by a compulsory sale to the State of an equal amount of foreign
exchange or by a deduction of the amount from the foreign exchange quota
allotted to the said party. In case the said party has no foreign exchange
to repay, the difference between the domestic and international market
prices of the goods purchased with the unlawfully procured exchange shall
be paid. In addition, a fine equivalent to 10-30% of the amount of the
foreign exchange unlawfully procured may be imposed.
2) The party procuring foreign exchange for others shall be fined a sum
equivalent to 10-30% of the amount of the foreign exchange illegally
procured in light of the seriousness of the case.
Article 4
The following acts shall be regarded as evasion of foreign exchange
control:
1) retaining, spending or depositing foreign exchange earnings abroad by
organizations within territory without prior approval of the exchange
control agencies; depositing foreign exchange earnings abroad in violation
of the Regulations for Foreign Exchange Control Relating to Enterprises
with Overseas Chinese Capital, Foreign-capital Enterprises and
Chinese-foreign Equity Joint Ventures;
2) retaining or depositing abroad without authorization the foreign
exchange which is concealed by organizations within territory, enterprises
with overseas Chinese capital, foreign-capital enterprises and Chinese-
foreign equity joint ventures and which is acquired through such means as
reporting less foreign exchange receipts by understating the export prices
or commissions, or reporting more foreign exchange expenditures by
overstating the import prices, expenses and commissions.
3) retaining for business operations abroad or putting to other uses the
profits that ought to be repatriated according to State provisions, by
organizations stationed abroad or by Chinese joint venturers in Chinese-
foreign equity joint ventures established abroad;
4) failing to use the foreign exchange allocated for the mission or earned
from various kinds of business operations according to plans and
depositing it abroad or putting it to other uses, without otherwise
approval of the foreign exchange control agencies, by delegations or
working groups and the members thereof sent abroad or to Hong Kong, Macao
and other regions.
Article 5
Evasion of foreign exchange control shall be penalized according to
different circumstances in the following ways:
1) if the foreign exchange acquired through evasion still remains unused,
the evader or the involved competent department shall be ordered to
repatriate it within a prescribed time limit for compulsory sale to the
State; or the full amount of foreign exchange or part thereof shall be
confiscated. In addition, a fine equivalent to 10-50% of the amount of the
foreign exchange evaded may be imposed;
2) if the foreign exchange acquired through evasion has been used up, the
evader shall be ordered to repay an equal amount of foreign exchange which
shall be sold to the State or confiscated. In addition, a fine equivalent
to 10-50% of the amount of the foreign exchange evaded may be imposed;
3) if the evader has no foreign exchange to repay, a fine equivalent to no
less than 30% of but no more than the full amount of the foreign exchange
acquired through evasion shall be imposed, or the illegal gains therefrom
shall be confiscated, or the fine and confiscation shall be imposed
concurrently.
Article 6
The following acts shall be regarded as disrupting financial stability:
1) engaging in foreign exchange business without prior approval of the
State Administration of Foreign Exchange Control or on a scale beyond the
approved business scope;
2) issuing securities denominated in foreign currencies in China or
abroad, or accepting loans offered by banks or enterprises in foreign
countries or in Hong Kong, Macao and other regions by organizations within
territory without prior approval of the State Council or the departments
authorized by the State Council;
3) using foreign currency by organizations within territory, without
otherwise approval of the foreign exchange control agencies, as the
monetary unit in settling accounts, borrowing or lending, making transfers
or obtaining mortgages, or as a medium of exchange in business
transactions;
4) buying and selling foreign exchange without authorization or in any
disguised form, or at rates above those set by the State Administration of
Foreign Exchange Control, or profiteering in buying and selling foreign
exchange.
Article 7
The following penalties shall be imposed on the offenders involved in the
cases listed in the preceding Article according to different
circumstances:
1) For cases' referred to in paragraph (1), the offenders shall be ordered
to cease their foreign exchange business or operations that exceed the
approved scope, or their unlawful earnings shall be confiscated or a fine
up to but no more than the full amount of the illegal operating fund shall
be imposed, or the fine and confiscation shall be imposed concurrently.
2) For cases referred to in paragraph (2), the offenders shall be ordered
not to issue new securities or not to accept new loans, and may also be
fined a sum up to but no more than 20% of the securities issued or loans
accepted.
3) For cases referred to in paragraphs (3) and (4), the offenders shall be
ordered to sell their unlawfully transacted foreign exchange to the State
and their illegal gains shall be confiscated, or a fine up to but no more
than the full amount of the foreign exchange illegally transacted shall be
imposed, or the fine and confiscation shall be imposed concurrently.
Article 8
For other acts in violation of foreign exchange control not specifically
listed in Articles 2, 4 and 6, penalties may be meted out according to the
seriousness of the case with reference to the most relevant provisions
provided in these Rules.
Article 9
In cases of minor offences, the offenders who voluntarily confess to their
unlawful activities before the foreign exchange control agencies, show
sincere repentance and demonstrate meritorious conduct by informing
against other offenders shall be dealt with leniently or exempt from
punishment. Offenders who refuse to confess, try to cover up their
offences or refuse to mend their ways despite repeated admonition shall be
punished severely in accordance with Articles 3, 5 and 7 of these Rules.
Article 10
Serious cases of unlawful procurement of foreign exchange, evasion of
foreign exchange control or disrupting financial stability shall be
transferred to judicial organs for handling according to law.
Article 11
To prevent violators from transferring their unlawfully acquired funds
when violations of foreign exchange control are under investigation, the
foreign exchange control agencies may ask the banks to freeze the funds in
question for a period of no more than two months. Upon expiry, the funds
shall be unfrozen automatically. If an extension of the period is
necessary under special circumstances, the relevant foreign exchange
control agency shall renew the notification to the bank concerned. In case
a violator refuses to pay the fine or the sum to be confiscated, the
relevant foreign exchange control agency may enforce the penalty by
deducting the sum from the violator's bank account.
Article 12
In cases where the foreign exchange control agencies impose penalties,
notices of penalty decision shall be served to the units or individuals
being penalized. If the party concerned does not agree with the penalty
decision, it(he) may appeal to the foreign exchange control agency at the
next higher level for reconsideration within 15 days as of the date of
receipt of the notice. If the party concerned still does not agree with
the decision of reconsideration, it(he) may bring a suit in the local
people's court.
Article 13
Cases involving violation of foreign exchange control regulations shall be
handled by the foreign exchange control agencies; cases involving unlawful
procurement of foreign exchange and evasion of foreign exchange control
that are of the nature of smuggling by means of illegally getting the
goods into or out of the country as part of luggage and personal effects,
by post or other means of transport, shall be handled by the Customs; and
cases involving the use of foreign exchange or payment instruments in
foreign currency for speculation and profiteering shall be handled by the
administrative departments for industry and commerce.
Article 14
Measures for penalizing violations of foreign exchange control in the
special economic zones shall be separately formulated by the Governments
of Guangdong and Fujian Provinces by taking reference to these Rules.
Article 15
The State Administration of Foreign Exchange Control shall be responsible
for interpreting these Rules.
Article 16
These Rules shall come into force as of the date of promulgation.
ns;
4) buying and selling foreign exchange without authorization or in any
disguised form, or at rates above those set by the State Administration of
Foreign Exchange Control, or profiteering in buying and selling foreign
exchange.
Article 7
The following penalties shall be imposed on the offenders involved in the
cases listed in the preceding Article according to different
circumstances:
1) For cases' referred to in paragraph (1), the offenders shall be ordered
to cease their foreign exchange business or operations that exceed the
approved scope, or their unlawful earnings shall be confiscated or a fine
up to but no more than the full amount of the illegal operating fund shall
be imposed, or the fine and confiscation shall be imposed concurrently.
2) For cases referred to in paragraph (2), the offenders shall be ordered
not to issue new securities or not to accept new loans, and may also be
fined a sum up to but no more than 20% of the securities issued or loans
accepted.
3) For cases referred to in paragraphs (3) and (4), the offenders shall be
ordered to sell their unlawfully transacted foreign exchange to the State
and their illegal gains shall be confiscated, or a fine up to but no more
than the full amount of the foreign exchange illegally transacted shall be
imposed, or the fine and confiscation shall be imposed concurrently.
Article 8
For other acts in violation of foreign exchange control not specifically
listed in Articles 2, 4 and 6, penalties may be meted out according to the
seriousness of the case with reference to the most relevant provisions
provided in these Rules.
Article 9
In cases of minor offences, the offenders who voluntarily confess to their
unlawful activities before the foreign exchange control agencies, show
sincere repentance and demonstrate meritorious conduct by informing
against other offenders shall be dealt with leniently or exempt from
punishment. Offenders who refuse to confess, try to cover up their
offences or refuse to mend their ways despite repeated admonition shall be
punished severely in accordance with Articles 3, 5 and 7 of these Rules.
Article 10
Serious cases of unlawful procurement of foreign exchange, evasion of
foreign exchange control or disrupting financial stability shall be
transferred to judicial organs for handling according to law.
Article 11
To prevent violators from transferring their unlawfully acquired funds
when violations of foreign exchange control are under investigation, the
foreign exchange control agencies may ask the banks to freeze the funds in
question for a period of no more than two months. Upon expiry, the funds
shall be unfrozen automatically. If an extension of the period is
necessary under special circumstances, the relevant foreign exchange
control agency shall renew the notification to the bank concerned. In case
a violator refuses to pay the fine or the sum to be confiscated, the
relevant foreign exchange control agency may enforce the penalty by
deducting the sum from the violator's bank account.
Article 12
In cases where the foreign exchange control agencies impose penalties,
notices of penalty decision shall be served to the units or individuals
being penalized. If the party concerned does not agree with the penalty
decision, it(he) may appeal to the foreign exchange control agency at the
next higher level for reconsideration within 15 days as of the date of
receipt of the notice. If the party concerned still does not agree with
the decision of reconsideration, it(he) may bring a suit in the local
people's court.
Article 13
Cases involving violation of foreign exchange control regulations shall be
handled by the foreign exchange control agencies; cases involving unlawful
procurement of foreign exchange and evasion of foreign exchange control
that are of the nature of smuggling by means of illegally getting the
goods into or out of the country as part of luggage and personal effects,
by post or other means of transport, shall be handled by the Customs; and
cases involving the use of foreign exchange or payment instruments in
foreign currency for speculation and profiteering shall be handled by the
administrative departments for industry and commerce.
Article 14
Measures for penalizing violations of foreign exchange control in the
special economic zones shall be separately formulated by the Governments
of Guangdong and Fujian Provinces by taking reference to these Rules.
Article 15
The State Administration of Foreign Exchange Control shall be responsible
for interpreting these Rules.
Article 16
These Rules shall come into force as of the date of promulgation.
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