Announcement of the People’s Bank of China[2011] No. 23For the purpose of further expanding the utilization of RMB in cross-border trade and investment, regulating banks and foreign investors to handle RMB settlement in foreign direct investment, the People’s Bank of China has formulated the Measures for the Administration on RMB Settlement in Foreign Direct Investment, which is hereby promulgated, and shall take effect.People’s Bank of ChinaOctober 13, 2011 Measures for the Administration on RMBSettlement in Foreign Direct InvestmentChapter I General ProvisionsArticle 1For the purpose of expanding the scope of application of RMB in cross-border trade and investment and regulating the financial institutes in the banking industry (hereinafter referred to as banks) to handle RMB settlement in foreign direct investment, in accordance with the Law of the People’s Bank of China of the People’s Republic of China, the Administrative Measures for the RMB Bank Settlement Accounts (Decree of the People’s Bank of China [2003] No. 5) and related laws, administrative regulations and rules, the Measures shall hereby be formulated.Article 2Banks handling RMB settlement in foreign direct investment shall be subject to the Measures.Article 3Any foreign enterprise, economic organization or individual (hereinafter referred to as foreign investor) investing withinChina in RMB should abide by laws and regulations of the People’s Republic of China on foreign direct investment.Article 4The People’s Bank of China shall, in accordance with the Measures, execute administration on RMB settlement in foreign direct investment.Chapter II Business ProcessArticle 5Any foreign investor may in accordance with the Administrative Measures for RMB Bank Settlement Accounts and the Administrative Measures for RMB Bank Settlement Accounts for Foreign Institutes (Yin Fa [2010] No. 249) apply for the opening RMB bank settlement account for foreign institutes in handling RMB settlement in foreign direct investment. And for the early-stage RMB costs fund related to investment project and the RMB capital gained through distribution of profits, liquidation, reduction of capital, transfer of equity and recovery of investment ahead of time for reinvestment within China should in the principle of special account for special purpose be opened special deposit account for theearly-stage RMB costs and the one for RMB reinvestment respectively, which shall not handle cash receipt and payment business.Article 6Banks should handle payment of the early-stage costs to the RMB bank settlement account within China after examining and reviewing such materials as payment command letter, capital purpose specification and capital utilization commitment letter. The rest early-stage costs should be transferred to the special deposit account for RMB capital fund opened according to Article 8 of the Measures or refunded after the foreign investment enterprise is established.Article 7The foreign investment enterprise (inclusive of the newly-established and merged and acquired)should within 10 working days upon receiving the business license apply to the branch of the People’s Bank of China where it is registered for handling the registration of enterprise information with the following materials.（I）copies of certificate of approval for foreign investment enterprise;（II）duplicate of the business license and organization institution code certification.Foreign investment partnership shall not submit the materials as mentioned in （I）.The branch of the People’s Bank of China where the foreign investment enterprise is registered should complete the formalities of enterprise information registration within 10 working days upon receiving the application materials.Where the alterations of the name, operating period, contribution mode, partners, joint venture and cooperation mode and other basic information of the registered foreign investment enterprise, or material alterations of increase of capital, decrease of capital, equity transfer or replacement, merger or division arise, it should within 15 working days upon altering registration or filing in the industrial and commercial administration report and submit the aforesaid alterations to the branch of the People’s Bank of China where it is registered.Article 8Any foreign investment enterprise should in accordance with the administrative provisions for bank settlement accounts including the Administrative Measures for RMB Bank Settlement Accounts submit the business license and other materials to apply for the opening RMB bank settlement account. And the RMB registered capital remitted inward or RMB contribution by foreign investor should in the principle of special account for special purpose be opened special deposit account for RMB capital fund, which shall not handle cash receipt and payment business.Where any foreign investor merges and acquires the domestic enterprise in RMB to establish the foreign investment enterprise, Chinese shareholders of the merged and acquired domestic enterprise should in accordance with the provisions for the administration over bank settlement accounts including the Administrative Measures for RMB Bank Settlement Accounts apply for opening the special deposit account forRMB merger and acquisition specially for the deposit of the RMB merger and acquisition capital remitted inward by foreign investor, which shall not handle cash receipt and payment business.Where any foreign investor makes equivalent payment to Chinese shareholder of foreign-funded enterprise abroad for equity transfer in RMB, Chinese shareholder should in accordance with the provisions for the administration over bank settlement accounts including the Administrative Measures for RMB Bank Settlement Accounts apply for opening the special deposit account for RMB equity transfer specially for the deposit of the equivalent payment for RMB equity transfer remitted inward by foreign investor, which shall not handle cash receipt and payment business.Article 9Any foreign investor should submit the related materials approved or filed by the national departments concerned in handling inward remittance of foreign RMB investment capital. Banks should conduct careful examination and verification and may enter the cross-border RMB payment information management system for related information.For foreign investment enterprise in the real estate handling the inward remittance of RMB capital fund for foreign direct investment, banks should also log on the website of the Ministry of Commerce to verify whether the enterprise has been filed in the Ministry of Commerce.Article 10Any foreign investment enterprise should in accordance with related provisions entrust an accounting firm to conduct capital verification and confirmation of the paid-in situation of the registered capital, contribution and RMB capital in equity paid by foreign investor. The accounting firm may issue the capital verification report after conducting the capital verification and confirmation on the bank of deposit.The bank of deposit should actively coordinate with the accounting firm, carefully check related data, specify the signature of opinion, affix the special seal with legal proof effectiveness upon receiving the confirmation letter of the bank, and make a reply within 5 working days upon the receipt of the letter.Article 11The bank should in accordance with the related administrative provisions for foreign direct investment supervise foreign investment enterprise to use the RMB capital fund by law, review the capital payment handled through the special deposit account for RMB capital fund, and shall not handle the foreign payment of RMB capital for the special deposit account for RMB capital fund without completing the formalities of capital verification.Article 12Where any foreign investor remits the RMB profits abroad, the bank may directly handle it after examining and checking the resolutions related to profits disposition, tax certificate and other related materials of the foreign investment enterprise.Article 13Where any foreign investor remits the RMB capital gained through decrease of capital, equity transfer, liquidation and recovery of investment ahead of time abroad, the bank should handle the formalities of RMB capital remittance after examining and checking the approval or filing documents of the related national departments and tax certificate.Article 14Where any foreign investor uses the RMB capital gained through distribution of RMB profits, recovery of investment ahead of time, liquidation, decrease of capital and equity transfer to reinvest or increase registered capital within China, it may deposit the RMB capital in the special account for RMB reinvestment and handle related settlement in accordance with the Measures. The bank should handle the foreign payment of RMB capital after examining and checking the approval or filing documents of the related national departments and tax certificate.Article 15Where the foreign investment company, the foreign investment venture capital investment enterprise, foreign-owned investment enterprise and foreign investment partnership with investment as main business conduct investment business in RMB within China by law, its investment enterprise should in accordance with the administrative provisions for bank settlement accounts including the Administrative Measures for RMB Bank Settlement Accounts apply for opening the special deposit account for RMB capital fund for RMB registered capital or contribution capital and to handle related capital settlement business, which shall not handle the cash receipt and payment business.Article 16Where any foreign investor uses RMB capital and foreign currency capital to make contributions simultaneously, the bank should in accordance with the Measures handle the formalities of RMB capital settlement and foreign exchange capital settlement according to related administrative provisions for foreign exchange. And the conversion exchange rate RMB and foreign currency is the central parity of RMB released by the People’s Bank of China on the day of registration and capital verification.Article 17The total scale of the foreign investment enterprise should be subject to aggregative calculation when conducting RMB lending and foreign exchange lending to foreign shareholders, affiliated enterprises in the group and foreign financial institutions.Article 18Any foreign investment enterprise should in accordance with Article 12 of the Administrative Measures for RMB Bank Settlement Accounts hold the RMB loan contract to apply for opening the general deposit account of RMB specially for the deposit of the RMB capital borrowed from abroad.Article 19The bank should review the registered capital of RMB of the foreign investment enterprise and authenticity and compliance of the purpose of RMB borrowing capital and supervise the foreign investment enterprise to utilize RMB capital by law. And in handling the settlement, the bank should in accordance withthe provisions related to prudential supervision require the enterprise to submit such materials as payment command letter and capital purpose certification and conduct careful examination and verification.Article 20Where any foreign investment enterprise uses RMB to compensate for the principal and interests of the foreign RMB borrowing, it may hold the loan contract, payment command letter and tax certificate to directly handle it in the bank.Chapter III Supervision and AdministrationArticle 21The bank should carefully fulfill the duty of information submission to submit timely, accurately and completely to the cross-border RMB settlement management system the information of the RMB bank settlement account for foreign institutions opened according to the Measures by law, special deposit account for RMB capital fund, special deposit account for RMB merger and acquisition, special deposit account for RMB equity transfer and the general deposit account of RMB as well as the information of handling cross-border and domestic receipt and payment of RMB capital through the above-mentioned accounts.Article 22The bank should in accordance with the administrative provisions for bank settlement accounts including the Administrative Measures for RMB Bank Settlement Accounts, the Implementing Rules of the Administrative Measures for RMB Bank Settlement Accounts (Yin Fa [2005] No. 16) and the Administrative Measures for RMB Bank Settlement Accounts for Foreign Institutions handle the RMB bank settlement account business for such depositors as foreign investors, foreign investment enterprises, and Chinese shareholders.Article 23The bank and foreign investment enterprise should in accordance with the Measures for the Declaration of Balance of Payment Statistics and other related provisions to handle the declaration of the balance of payment in handling RMB settlement in foreign direct investment.Article 24The bank should in accordance with the Anti-money-laundering Law of the People’s Republic of China and related provisions of the People’s Bank of China practically perform the obligation of anti-money laundering and anti-terrorist financing and prevent the illegal criminal activities of utilizing RMB settlement in foreign direct investment to conduct money laundering and terrorist financing in handling the business of RMB settlement in foreign direct investment, and also collect the anti-money laundering and anti-terrorist financing information where the foreign investor is domiciled, know about the natural person actually controlling investment and the true beneficiary of investment, evaluate the risks of money laundering and terrorist financing of investment and adopt proper measures of risk management.Article 25The People’s Bank of China and related departments shall establish the necessary information-sharing and management mechanism, intensify the strength of after-event inspection and effectively supervise and manage the RMB settlement in foreign direct investment.Article 26The People’s Bank of China, together with related departments, shall conduct the on-site inspection and offsite surveillance in the RMB settlement in foreign direct investment, the extending inspection over capital purpose on banks and foreign investment enterprises and urge banks to practically fulfill such duties as the verification of authenticity of transactions, information submission and anti-money laundering.Article 27Where the bank and foreign investment enterprise violate related provisions of the Measures, the People’s Bank of China together with related departments may circulate a notice of criticism or impose penalty on it; if the situation is serious, the bank and foreign investment enterprise shall be suspended or banned to continuously carry out cross-border RMB business.Article 28Where the bank violates the provisions related to prudential supervision in handling RMB settlement in foreign direct investment, the departments concerned shall make punishment on it by law; where it violates the administrative provisions for RMB bank settlement accounts, anti-money laundering and anti-terrorist financing, the People’s Bank of China shall be responsible for punish it by law.Chapter IV Supplementary ProvisionsArticle 29The People’s Bank of China shall be responsible to interpret the Measures.Article 30The Measures shall take effect as of the day of promulgation. And the Measures shall prevail in case of any conflict with the previous provisions concerned.。