In order to regulate the receipt and payment of donations in foreign exchange, the State Administration of Foreign Exchange (SAFE) has promulgated the Circular of the SAFE on Relevant Issues Concerning the Administration of Donations in Foreign Exchange by Domestic Institutions (hereinafter referred to as the Circular). The Circular shall enter into force as of March 1, 2010.
The Circular includes the following main issues: (1) Different methods are adopted for administration according to the different characteristics of the domestic institutions in order to facilitate donations in foreign exchange by foundations, social organizations, and other domestic institutions engaging in public welfare undertakings, and to regulate the receipt and payment of donations between domestic enterprises and overseas entities with different characteristics; (2) The procedures for the receipt and payment of donations in foreign exchange by domestic institutions shall be standardized. It is specified that a separate foreign exchange account shall be opened for the receipt and payment of donations in foreign exchange by domestic institutions, through which all receipts and payments thereof shall be processed; and (3) The SAFE shall carry out off-site supervision of the receipt and payment of donations in foreign exchange by domestic institutions via its information system.
Promulgation of the Circular will facilitate the procedures for domestic institutions to handle donations in foreign exchange and to standardize the receipt and payment of such donations, therefore promoting the prevention of cross-border flows of abnormal funds by way of donations.