SAFE issued the Measures together with the Operational Guidelines on Foreign Debt Registrations ("Guidelines"), providing detailed implementing rules for various issues relating to foreign debt registration.

The Measures simplify the procedures for registering foreign debt and eliminate several approval requirements stipulated in the previous SAFE regulations. The main points established in the Measures are below.

The Measures classify the debtor into three categories: financial department, domestic bank and non-bank debtor.

  • Where the debtor is a financial department, it shall report information on foreign debt transactions to SAFE relating to withdrawal, settlement, foreign exchange purchasing, repayment and change of account, within the first 10 working days of each month.
  • Where the debtor is a domestic bank, it shall report the information on each foreign debt transaction through the SAFE system.
  • Where the debtor is a non-bank debtor, it shall go through SAFE’s filing or registration procedures when executing agreements for all foreign debt transactions.

The Measures remove SAFE’s approval requirements for foreign debts of domestic banks, which are currently allowed to open accounts directly with either a domestic bank or foreign bank to handle the withdrawal and repayment of foreign debt.

The Measures highlight the specific rules on domestic loans with foreign guarantees, which differ between foreign-invested enterprises ("FIEs") and Chinese enterprises.

FIEs are allowed to sign guarantee contracts directly with foreign guarantors or creditors without SAFE’s approval, but the guaranteed amount is subject to the administration scale under the PRC’s foreign debt regime for FIEs.

Chinese enterprises shall apply for the quota of domestic loans with foreign guarantees before operating such transactions.

To strengthen SAFE’s supervision and administration of foreign debt registration, the Measures establish penalties for non-compliance and illegal conduct, such as providing outbound guarantees or issuing foreign bonds without SAFE’s approval.

Date of issue: April 28, 2013. Effective date: May 13, 2013