China's State Administration of Foreign Exchange (SAFE) has announced a change in regulations affecting the centralised operation and management of foreign exchange funds of MNCs.
In brief, the regulations entail the following:
- a pilot scheme in which affiliates of MNCs will be subject to self-disciplinary management of external debt and the host enterprise is permitted to centralise all or part of the external debt quotas of its member enterprises.
- the functions of overseas master accounts will be optimised, with domestic banks permitted to use deposits from overseas master accounts for foreign exchange funds.
- account opening requirements will be simplified, with MNCs permitted to operate the foreign exchange receipts of class-A member enterprises that do not need to be in the account for export income to be verified.
- procedures for foreign exchange receipts and payments will be simplified, with banks permitted to verify the authenticity of relevant electronic documents and handle foreign exchange receipts and payments under the current account for Know Your Customer (KYC) and due diligence purposes.
- procedures for the declaration of foreign-related receipts and payments will be improved.
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