In accordance with the Law of the People’s Republic of China on Anti-Money Laundering (Decree No. 56 of the President of the People’s Republic of China) and Regulations of the People’s Republic of China on Foreign Exchange Administration (Decree No. 532 of the State Council of the People’s Republic of China), the State Administration of Foreign Exchange (SAFE) has strengthened foreign exchange market regulation, and severely cracked down upon false and fraudulent foreign exchange transactions and other irregular behaviors, in a bid to contain money laundering and relevant illegal and criminal activities, and maintain the healthy and benign order in the foreign exchange market. In accordance with the Regulations of the People's Republic of China on the Disclosure of Government Information (Decree No. 492 of the State Council of the People's Republic of China) and other relevant regulations, a selection of typical cases involving violations of foreign exchange regulations are notified as follows:

Case 1: The false entrepot trade case of Xiamen Branch, PingAn Bank

From September 2015 to September 2016, Xiamen Branch of PingAn Bank handled foreign exchange payment for entrepot trade with false contracts and bills of lading of enterprises.

Such behavior violates Article 12 of the Regulations on Foreign Exchange Administration. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, a penalty of RMB 2.80 million was imposed on the bank.

Case 2: The false entrepot trade case of Haikou Branch, China Everbright Bank

From December 2015 to May 2016, Haikou Branch of China Everbright Bank handled foreign exchange payment for entrepot trade with false contracts and bills of lading of enterprises.

Such behavior violates Article 12 of the Regulations on Foreign Exchange Administration. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, a penalty of RMB 800,000 was imposed.

Case 3: Handling of prepayment by Guangzhou Branch of Bank of East Asia in violation of regulations

From February to May 2016, Guangzhou Branch of Bank of East Asia failed to perform verification responsibilities, and handled foreign exchange payment for prepayment in violation of regulations when there were multiple obvious inconsistencies between the import contracts and the invoices of enterprises.

Such behavior violates Article 12 of the Regulations on Foreign Exchange Administration. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, a penalty of RMB 500,000 was imposed.

Case 4: Handling of onshore guarantees for offshore loans by Dalian Branch of Minsheng Bank in violation of regulations

From July 2015 to March 2016, Dalian Branch of Minsheng Bank failed to fulfill verification responsibilities when handling contracting of onshore guarantees for offshore loans and performing foreign exchange payment, and failed to conduct due diligence and inspection on sources of expected repayment funds and relevant trading background.

Such behavior of the Bank violated Articles 12 and 28 of Provisions on Foreign Exchange Administration for Cross-border Guarantee. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, a penalty of RMB 3.073 million was imposed.

Case 5: Evasion of foreign exchange by Jishan County Kangshengda Preserved Foods Co., Ltd.

From October 2014 to November 2015, Jishan County Kangshengda Preserved Foods Co., Ltd. failed to collect foreign exchange for exported goods, involving an amount of USD 4.6647 million.

Such behavior violated Article 12 of the Regulations on Foreign Exchange Administration and Article 14 of the Guidance on Foreign Exchange Administration under Trade in Goods, and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, a penalty of RMB 2.0859 million was imposed. Relevant penalty information has been included in the credit information system of the People’s Bank of China.

Case 6: Evasion of foreign exchange by Ningbo Minghui Mining Co., Ltd.

In February and March 2017, Ningbo Minghui Mining Co., Ltd. fabricated trade background with invalid documents and made external foreign exchange payment of USD 2.7371 million.

Such behavior violated Articles 12 and 14 of the Regulations on Foreign Exchange Administration, and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, a penalty of RMB 924,000 was imposed. Relevant penalty information has been included in the credit information system of the People’s Bank of China.

Case 7: Evasion of foreign exchange by Ningbo Shiding Import & Export Co., Ltd.

In September 2017, Ningbo Shiding Import & Export Co., Ltd. forged marine bill of lading, fabricated trade background and made external foreign exchange payment of USD 3.881 million.

Such behavior violated Articles 12 and 14 of the Regulations on Foreign Exchange Administration, and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, a penalty of RMB 1.273 million was imposed. Relevant penalty information has been included in the credit information system of the People’s Bank of China.

Case 8: Evasion of foreign exchange by Jiangsu Wuyang Group Co., Ltd.

In September 2017, Jiangsu Wuyang Group Co., Ltd. forged import contracts, fabricated trade background and made external foreign exchange payment of USD 2.0007 million.

Such behavior violated Article 12 of the Regulations on Foreign Exchange Administration and Article 3 of the Guidance on Foreign Exchange Administration under Trade in Goods, and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, a penalty of RMB 654,000 was imposed. Relevant penalty information has been included in the credit information system of the People’s Bank of China.

Case 9: Illegal trading of foreign exchange by a Mr. Zhou from Hong Kong

From August 2014 to August 2016, Mr. Zhou conducted illegal trading of Hong Kong dollars several times via underground banks, involving an amount equivalent to RMB 14.0121 million.

Such behavior violates Article 32 of the Regulations for the Administration of Settlement and Sales of and Payment in Foreign Exchange and was considered illegal trading of foreign exchange. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, a penalty of RMB 1.4012 million was imposed. The SAFE exercised the “Watch list” management on Mr. Zhou, and included him into the credit information system of the People’s Bank of China.

Case 10: Illegal trading of foreign exchange by a Mr. Yang from Guangdong

From May 2015 to April 2016, Mr. Yang conducted illegal purchase of US dollars several times via underground banks, involving a total amount equivalent to RMB 4.5307 million.

Such behavior violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and Article 32 of the Regulations for the Administration of Settlement and Sales of and Payment in Foreign Exchange, and was considered illegal trading of foreign exchange. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, a penalty of RMB 317,100 was imposed. The SAFE exercised the “Watch list” management on Mr. Yang, and included him into the credit information system of the People’s Bank of China.

Case 11: Illegal trading of foreign exchange by a Mr. Xu from Jiangsu

From October 2017 to April 2018, Mr. Xu conducted illegal trading of Hong Kong dollars at Macau casinos several times via underground banks, involving an amount equivalent to RMB 2.6598 million.

Such behavior violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and Article 32 of the Regulations for the Administration of Settlement and Sales of and Payment in Foreign Exchange, and was considered illegal trading of foreign exchange. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, a penalty of RMB 320,000 was imposed. The SAFE exercised the “Watch list” management on Mr. Xu, and included him into the credit information system of the People’s Bank of China.

Case 12: Illegal trading of foreign exchange by a Mr. Feng from Liaoning

From December 2017 to May 2018, Mr. Feng conducted illegal trading of Hong Kong dollars at Macau casinos several times via underground banks, involving an amount equivalent to RMB 10.8179 million.

Such behavior violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and Article 32 of the Regulations for the Administration of Settlement and Sales of and Payment in Foreign Exchange, and was considered illegal trading of foreign exchange. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, a penalty of RMB 1.30 million was imposed. The SAFE exercised the “Watch list” management on Mr. Feng, and included him into the credit information system of the People’s Bank of China.

Case 13: Evasion of foreign exchange through split transactions by a Mr. Zhou from Shanghai

From January to December 2015, to illegally transfer assets overseas, Mr. Zhou used the annual quotas of 21 domestic individuals for foreign exchange purchase to purchase foreign exchange and transfer personal funds split to overseas accounts, illegally transferring funds of USD 1.0496 million in total.

Such behavior violated Article 7 of the Measures for the Administration of Individual Foreign Exchange and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, a penalty of RMB 330,000 was imposed. The SAFE exercised the “Watch list” management on Mr. Zhou, and included him into the credit information system of the People’s Bank of China.

Case 14: Evasion of foreign exchange through split transactions by a Mr. Shen from Shanghai

From January to July 2016, to illegally transfer assets overseas, Mr. Shen used the annual quotas of 34 domestic individuals for foreign exchange purchase to purchase foreign exchange and transfer personal funds split to overseas accounts for purchasing overseas house properties, illegally transferring funds of CAD 2.04 million in total.

Such behavior violated Article 7 of the Measures for the Administration of Individual Foreign Exchange and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, a penalty of RMB 510,000 was imposed. The SAFE exercised the “Watch list” management on Mr. Shen, and included him into the credit information system of the People’s Bank of China.

Case 15: Evasion of foreign exchange through split transactions by a Mr. Sui from Jilin

From November 2017 to April 2018, to illegally transfer assets overseas, Mr. Sui used the annual quotas of 173 domestic individuals for foreign exchange purchase to purchase foreign exchange and transfer personal funds split to overseas accounts for purchasing overseas house properties, illegally transferring funds of CAD 12.0565 million in total.

Such behavior violated Article 7 of the Measures for the Administration of Individual Foreign Exchange and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, a penalty of RMB 3.009 million was imposed. The SAFE exercised the “Watch list” management on Mr. Sui, and included him into the credit information system of the People’s Bank of China.