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Circular of the Shanghai Headquarters of the People’s Bank of China on Supporting Expanded Cross-Border Use of RMB in the China (Shanghai) Pilot Free Trade Zone

china-shftz.gov.cn Updated:2017-07-24

Bank Headquarters Publication [2014] No. 22

To the Shanghai branches of the China Development Bank, policy banks, state-owned commercial banks, joint-stock commercial banks, and China Postal Savings Bank; Bank of Communications, Shanghai Pudong Development Bank, Bank of Shanghai, and Shanghai Rural Commercial Bank; the Shanghai branches of other urban commercial banks; foreign banks in Shanghai; and non-banking financial institutions in Shanghai:

According to the Opinions of the People’s Bank of China on Financial Sector Support for the China (Shanghai) Pilot Free Trade Zone (referred to hereafter as the “Opinions”) and other relevant provisions, as approved by the headquarters of the People’s Bank of China (“PBC”), the Circular on Supporting Expanded Cross-border Use of RMB in the China (Shanghai) Pilot Free Trade Zone (“PFTZ”) is published as follows:

I. All policies and measures issued by the state government to encourage and support expanded cross-border use of RMB shall apply to the PFTZ.

II. Cross-border RMB Settlement under Current Accounts and Direct Investment in the PFTZ

Banking institutions in Shanghai may, based on the three principles of “knowing your clients, knowing your business, and due diligence, directly process cross-border RMB settlement under current accounts and under direct investment for entities (excluding those on a monitoring list for cross-border RMB settlement) or individuals in the PFTZ according to their receipt/payment instructions.

1. When conducting settlement under direct investment for the aforesaid parties, banks shall, according to the negative list management requirements for investment in the PFTZ, require them to produce approval documents issued by competent authorities if the settlement business is subject to negative list management.

2. The Shanghai Headquarters of the People’s Bank of China (“PBC Shanghai”) and the Administration Committee of the PFTZ shall establish a direct investment information sharing system through the comprehensive information management system of the PFTZ and provide relevant information services for commercial banks.

III. Bank Settlement Accounts of Individuals in the PFTZ

To facilitate individuals in conducing cross-border RMB settlement under current accounts, individuals working in the PFTZ as employees or business practitioners may, according to the Administrative Measures for RMB Bank Settlement Accounts (The People’s Bank of China Decree [2003] No. 5) and other relevant rules governing bank settlement accounts, open individual bank settlement accounts or institutional bank settlement accounts for individual business owners, and use them for cross-border RMB receipt and payment. In particular, an overseas individual who wishes to open a RMB bank settlement account shall also produce a residence permit valid for one year or more as issued by the exit-entry administrative division of the public security authorities.

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