On 24 July 2013, the State Administration of Foreign Exchange (“SAFE”) released the Guidelines for Foreign Exchange Administration of Trade in Service (“Guidelines”) and their Implementating Rules, The Detailed Rules for Implementing Guidelines for Foreign Exchange Administration of Trade in Service (“Implementing Rules”). Both of these directives apply as from 1 September 2013. One of the key aspects of this legislation concerns the remittance of royalties under trademark license agreements. In the past, it was only possible for foreign trademark owners, to receive royalty payments out of China, if the relevant trademark license agreement was registered/recorded with the CTO – given that it can take up to 12 months to get a license registered with the CTO, this often led to accounting and tax problems (not to mention increased compliance costs for trademark owners). Under the Implementing Rules, a licensee should not be required to present a copy of a CTO issued Trademark License Recordal Certificate, before being allowed to convert local RMB into a foreign currency for the purpose of remitting royalty payments to the trademark licensor, under a trademark license agreement. For payments less than US$50,000, minimal paperwork will be required by the banks (e.g. tax clearance certificates), and for payments of more than US$50,000 only a copy of the license agreement, invoices and tax clearance certificates will be needed. This is a much welcomed and long awaited change in foreign exchange policy, and will be welcomed by trademark owners with license arrangements in China.