State Administration of Foreign Exchange, Issues Relevant to Adjusting the Standards for Verification of the Limits of Foreign Exchange Accounts for Current Account Items Circular

Issued: March 30 2004
Applicability: In the case of a conflict between previous provisions and this Circular, this Circular shall prevail (Section Five).

Main contents: Section One of the Circular stipulates that the limit on the amount of foreign exchange to be retained in the foreign exchange account for current account items of domestic organizations whose ratio of foreign exchange expenditure on current account items to foreign exchange income from current account items is less than 80% in the previous year shall be verified at 30% (previously 20%) of the foreign exchange income from current account items of the previous year. The limit on the amount of foreign exchange to be retained in the foreign exchange account for current account items of domestic organizations whose ratio of foreign exchange expenditure on current account items to foreign exchange income from current account items is 80% or more in the previous year shall be verified at 50% (previously 20%) of the foreign exchange income from current account items of the previous year. In the case of newly opened foreign exchange accounts for current account items, if there is no foreign exchange income from current account items in the previous year, the initial limit on the account shall not exceed the equivalent of US$100,000. Regional limits on foreign exchange accounts for current account items shall be cancelled and the abovementioned verification standards shall apply nationwide (Section Two).
Related legislation: Administration of Foreign Exchange Accounts for Current Account Items of Domestic Organizations Implementing Rules, 2002 and Issues Relevant to Adjusting the Administration Policies on Foreign Exchange Accounts for Current Account Items Under International Project Contracting Etc. Circular, 2003