Article 3 The Shanghai Branch of the State Administration of Foreign Exchange (referred to hereafter as “SAFE Shanghai”) is responsible for the oversight and administration of matters in opening foreign currency account, transfer of funds, settlement and purchase of foreign exchange and data and statistics of RMB and foreign currencies.

Article 4 PFTZ-based entities shall fulfill their obligations in fully and accurately reporting data on international balance of payments, settlement and purchase of foreign exchange, domestic transfer of funds and accounts in a timely manner in accordance with the current requirements on foreign exchange management.

Article 5 PFTZ-based banks shall abide by the principle of “knowing your clients, knowing your business and due diligence” to conduct the review in the authenticity and compliance of foreign exchange transactions in the PFTZ, formulate complete internal management system and submit a report to SAFE Shanghai.

Article 6 PFTZ-based enterprises, non-banking financial institutions and individuals shall deal with innovative foreign exchange transactions through accounts on an authentic and legal basis. No fake contracts or transactions are allowed.

Chapter II Current Account Transactions

Article 7 The foreign-exchange-related transactions (including receipt, settlement, purchasing and payment) under the current account between PFTZ-based and overseas entities shall be handled in accordance with Article 5 in theses Detailed Rules. For the capital whose nature is unclear, relevant documents shall be provided by PFTZ-based banks in accordance with requirements of enterprises, non-banking institutions and individuals.

Foreign currency earnings from goods transactions by enterprises of Category A within the PFTZ do not need to be credited into accounts to be checked. Single external payment of service transactions, earnings and current transfers with the equivalent of over USD 50,000 shall submit taxation filing forms in accordance with rules.

Article 8 Qualified PFTZ-based entities may handle centralized receipt, payment, transfer and netting settlement of foreign exchange funds under the current account through domestic foreign exchange master account.

Article 9 Financial leasing companies in the PFTZ, both foreign-funded and Chinese-funded (referred to hereafter as “financial leasing companies”) are allowed to receive rental payments in foreign currencies for domestic leasing business. Goods transactions by major financial leasing companies are inspected and managed with special codes.

Chapter III Capital Account Transactions

Article 10 Foreign exchange registration and modification of registration under direct investment shall be made with banks.