SAFE Clarifies Issues concerning Foreign Exchange in Border Trade

31/03/2014

The State Administration of Foreign Exchange (“SAFE”) recently released the Circular on Issues concerning the Administration of Foreign Exchange in Border Trade (the “Circular”), to be effective from April 1, 2014.

The Circular applies to the handling of border trade-related foreign exchange business. For the purpose of the Circular, “border trade” includes border trade in small amounts and barter trade between border residents.

The Circular clarifies that enterprises or individuals engaging in border trade may use Renminbi, the currency of a neighbouring country or a freely convertible currency to valuate and settle their transactions with overseas trade agencies, or barter with them. Meanwhile, the foreign exchange designated banks and other approved institutions in the border provinces and autonomous regions are allowed to open businesses relating to the receipt and conversion of the currencies of neighbouring countries that cannot be converted freely, and may determine the difference between buying and selling rates of a foreign currency at their own discretion.

(Source: http://www.safe.gov.cn/)


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