The People’s Bank of China released the Provisional AdministrativeRules on Sales and Payment of Foreign Exchange for Personal Asset OutboundTransfer
The People’s Bank of China released theProvisionalAdministrative Rules on Sales and Payment of Foreign Exchange for PersonalAsset Outbound Transfer soas to satisfy thelegitimate need for legal assets transfer, facilitate and regulate the outboundtransfer of personal assets. The Provisional Rules clarify foreignexchange management policies governing personal asset outbound transfer,protect the individuals’ rights in legal assets and further advance the capitalaccount convertibility.
Personal assetsqualified for outbound transfer as defined in Provisional Rules includeemigrant asset transfer and inheritor asset transfer. Emigrant asset transfer refersto encashment, exchange (at the commercial bank) and transfer overseas ofassets by emigrants from Mainland China which theyhave obtained before they get immigration permission from foreign countries or Hong Kong and Macao Special Administrative Regions (SARs).Inheritor asset transfer refers to encashment, exchange (at the commercialbank) and transfer overseas of assets by foreign citizens and residents of Hong Kong or Macao SARs. The Rules may serve as areference in dealing with personal asset transfer to Taiwanprovince. The Rules do not apply to other forms of personal assettransfer.
The ProvisionalRules clarify that the assets applied for transfer should be legal assetbelonging to the applicant and indisputable in terms of ownership; Foreignexchange administration departments do not accept applications for the transferof assets which is legally prohibited by the judicial or supervisoryauthorities and applications for outbound transfer of assets which are legallyuntransferable, have no prove for their lawful source or involve unsettledcriminal or civil litigations.
The Provisional Rulesstipulate that all applications for personal asset transfer should be filed tothe local branch offices of the State Administration of Foreign Exchange inplaces where the emigrants or the persons whose assets are inherited haveoriginally registered their residence. Sub-branches of the State Administrationof Foreign Exchange may accept the applications. The applications may besubmitted by the applicants themselves or by other persons entrusted by theapplicants. Applications for transfer of asset value equivalent to less thanRMB500,000 yuan shall be examined and approved by the branches of the StateAdministration of Foreign Exchange; applications for transfer of asset valueequivalent to more than RMB500,000 yuan (inclusive) shall be examined by thebranch offices before being submitted to the head office of the StateAdministration of Foreign Exchange for approval.
The Provisional Rulesalso stipulate that emigrant transfer of asset value equivalent to more thanRMB200,000 yuan (inclusive) should be divided into and made in smallerinstallments. This means, the applicant may apply for transfer of the wholeamount and remit in installments within two years after the approval. Assetsinherited from the same person requires only one application but can beremitted in lump sum or installments. The assets inherited from differentpersons by the same person should file separate applications and have theassets remitted respectively.
The Provisional Rules will enterinto effect on February 1, 2004.
Attachments: ProvisionalAdministrative Rules on Sales and Payment of Foreign Exchange for PersonalAsset Outbound Transfer
(UnofficialTranslation)
Article 1 These rules are formulated according to the Regulations of the People’sRepublic of China on Foreign Exchange Administration and other relevantrules so as to facilitate and regulate outbound transfer of personal assets.
Article 2 Outbound transfer of personal assets as defined in these Rules includeemigrant asset transfer and inheritor asset transfer. Emigrant asset transfer refersto encashment, exchange (at the commercial bank) and transfer overseas ofassets by emigrants from Mainland China which theyhave obtained before they get immigration permission from foreign countries or Hong Kong and Macao Special Administrative Regions (SARs).Inheritor asset transfer refers to encashment, exchange (at the commercialbank) and transfer overseas of assets by foreign citizens and residents of Hong Kong or Macao SARs.
Article 3 Assets applied for transfer are limited to the legal asset belonging to theapplicant and indisputable in terms of ownership.
Article4 The State Administration of Foreign Exchangeand its branch offices (hereinafter referred to as SAFE) shall exercise theadministration of foreign exchange in the outbound transfer of personal assets.
Article5 Applications for emigrant asset transfer shallbe filed to the local branch offices of SAFE in places where the emigrants haveoriginally registered their residence, while applications for inheritor assettransfer shall be submitted to the local offices of SAFE in places where the personswhose assets are inherited have originally registered their residence. Localsub-branches of the SAFE may accept the applications.
Article6 The applicant for emigrant asset transfershall file only one application for the transfer of the whole amount of assets andremit in smaller installments. The first remittance may not exceed half of the totalvalue of the assets applied to be transferred; less than half of the remainingvalue may be remitted one year after the first remittance; and the rest may be remittedoutbound two years after the first remittance. Assets equivalent to less thanRMB200,000 yuan (inclusive) may be remitted outbound in lump sum afterapproval.
When applying forthe transfer of assets inherited from the same person, the applicant shall fileonly one application but may have the proceeds remitted in lump sum or ininstallments. Assets inherited from different persons shall file separateapplications and have the assets remitted respectively.
Article 7 The application for asset transfer may be submitted in person by the applicantor by other persons entrusted by the applicant.
Article8 The applicant shall submit the followingdocuments or materials to the local branch office of SAFE for emigrant assettransfer:
(1) a written application listing reasons forapplication and explanations of the source and encashment of the assets.
(2) personal information form signed by the applicant.
(3) application form for foreign exchangebusiness in outbound transfer of personal asset signed by the applicant or byother persons entrusted by the applicant
(4) ID of the applicant.
Applicants who have emigrated toforeign countries shall submit proof documents certifying cancellation of permanentresidence in China by the public securitydepartment and permit of residence in foreign countries confirmed by local China’s embassies and consulates.
Applicants who have emigratedto Hong Kong or Macao SARs shall submitproof documents certifying cancellation of permanent residence in Mainland China by the public securitydepartment as well as the ID card and entry permit to Chinese mainland for Hong Kong and Macao residents or the passports issued by theresident authorities.
(5) documents certifying ownership of the asset by theapplicant, such as photocopies of title of asset contract, trading contract ofreal estate or agreement of compensation for reallocation and so on.
(6) documents certifying tax payment issued by thelocal tax authority in places where the assets are stationed or the income areoriginated.
(7) other documents required by the SAFE.
When filingapplications for subsequent transfer of the remaining assets following thefirst outbound remittance, the applicant shall submit documents of approvalissued by the local branch office of SAFE and the Authorization on CapitalAccount Foreign Exchange Business (hereinafter referred to as theAuthorization) issued by the local SAFE office under the first remittance, andapply to the branch office of SAFE which has approved the initial transfer offoreign exchange.
In the case the applicantentrusts other person to file the application, the Entrustment Agreementand the ID of assignee shall be provided. Relevant documents such as the EntrustmentAgreement and certificates of asset ownership shall be notarized.
Article9 The applicant shall submit the followingdocuments or materials to the local office of SAFE for inheritor assettransfer:
(1) a written application listing reasons forapplication, the relationship between the applicant and the person whose assetsare inherited, and explanations of the source and encashment of the assets.
(2) application form for foreign exchangebusiness in outbound transfer of personal asset signed by the applicant or byother persons entrusted by the applicant.
(3) ID of the applicant.
Foreign citizens shall submitpermit of residence in foreign countries confirmed by local China’s embassies and consulates.
Residents of Hong Kong or Macao SARs shall submitthe ID card and entry permit to Chinese mainland for Hong Kong and Macao residents or the passports issued by theresident authorities.
(4) documents certifying inheritance ofthe asset by the applicant.
(5) documents certifying ownership of the asset by theperson whose assets are inherited and documents certifying tax payment issuedby the local tax authority in places where the assets are stationed or theincome are originated.
(6) other documents required by the SAFE.
In the case the applicantentrusts other person to file the application, the Entrustment Agreementand the ID of assignee shall be provided. Relevant documents such as the EntrustmentAgreement, certificates of inheritance of the asset by the applicant andcertificates of asset ownership shall be notarized.
Article10 Applications for asset transfer equivalent toless than RMB500,000 yuan (inclusive) shall be examined and approved by thelocal branches of the SAFE. The local branch shall issue a document of approvaland authorization to the applicant after the approval, and the applicant shallsubmit the Authorization to the designated banks to buy foreign exchange.
Applications for asset transfer equivalentto more than RMB500,000 yuan will be examined by the local office of SAFEbefore being submitted to the head office for approval. The local office shallissue a document of approval and authorization to the applicant upon theapproval of the head office, and the applicant shall submit the Authorizationto the designated bank to buy foreign exchange.
Article11 Designated banks shall remit the foreignexchange after selling directly to the account of the applicant opened incountries or regions where he or she has emigrated to and settled in as anwealth inheritor. Drawing foreign exchange cash within the territory of Mainland China is notallowed.
Article12 The SAFE shall not accept theapplication for the transfer of assets that is legally prohibited by thejudicial or supervisory authorities.
The SAFE shall notaccept the application for outbound transfer of assets involved in unsettleddomestic criminal or civil procedures.
Close relatives ofpersons caught in domestic criminal or civil litigation proceedings shallsubmit proof issued by relevant authorities that the assets are not related tothe cases when applying for overseas transfer.
The SAFE shall notaccept application for the transfer of assets that are legally untransferableor have no proof of legality.
Article13 The applicant shall be penalized by the SAFEin line with Article 40 of the Regulations of the People’s Republic of Chinaon Foreign Exchange Administration if found swindling foreign exchange withfalse documents or filing applications for asset transfer based on the sameassets.
The designatedbanks failing to sell foreign exchange in association with the outboundtransfer of personal assets in accordance with the Rules shall bepenalized by the SAFE according to the Regulations of the People’s Republicof China on Foreign Exchange Administration.
Article14 The Rules may serve as a reference in dealing withoutbound transfer of assets for natural persons emigrated from Mainland China to Taiwan province or assets inherited by residentsof Taiwan province in Mainland.
Personal identificationdocuments of the applicant refers to the certificate issued by the publicsecurity department on the cancellation of permanent residence in Mainland,entry permit to Taiwan province by Mainland residents, entry permit to Mainlandby Taiwan residents, valid ID cards of Taiwan residents and other border entrydocuments.
Article15 These Rules shall be interpreted by thePeople’s Bank of China.
Article 16 TheseRules shall enter into effect on December 1, 2004.
