SAFE streamlines foreign debt control regime
On 28 April 2013, the State Administration of Foreign Exchange (SAFE) released its Circular on Administrative Measures for Foreign Debt Registration (Circular 19), which came into effect on 13 May 2013. By abolishing eight sets of old rules while creating clearer rules and guidance for foreign debt control, SAFE simplifies and streamlines its procedural control over foreign debt registration.
Foreign debt refers to loan financing received by a domestic entity from an overseas lender (e.g. a shareholder loan borrowed by the China subsidiary from its foreign mother company). Normally this refers to a foreign exchange loan and a cross-border RMB loan is subject to a different regime of control in practice. Under the regime, a foreign debt transaction — due to foreign debt control — will have to involve SAFE throughout the whole transactional cycle including contract conclusion, account opening, drawdown, conversion into RMB and repayment. Under Circular 19, all these procedures have now been greatly simplified and the SAFE procedure is now only required for loan contract conclusion filing and transaction closing upon full repayment. Responsibility for reviewing and verifying the other transactional steps of a foreign loan deal has been pushed down to banks. In future, banks are supposed to implement more strictly the ‘know your client’ principle as has already been the requirement of SAFE in other foreign exchange control areas (e.g. foreign direct investment)…
If you are registered and logged in to the site, click on the link below to read the rest of the Taylor Wessing briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Taylor Wessing
News from The Lawyer
Briefings from Taylor Wessing
For the tax year from 6 April 2014, the standard lifetime allowance has reduced from £1.5m to £1.25m.
One of the areas highlighted last year by the Regulator was the regulation of workplace DC pension schemes.
Analysis from The Lawyer
As the equity capital markets rocketed back into favour and global M&A saw at least a partial return to form, there have been some rich pickings for The Lawyer’s Corporate Team of the Year award shortlisted firms in 2014.
The city-state is working hard to become a global wealth management hub, and law firms are gearing up for a prosperous new world