❶ Recently, the People's Bank of China released the 'Notice on Further Perfecting the RMB Cross-border Business Policies to Promote Trade Investment Facilitation.'

❷ The "Note" further optimized the business process, removed the restrictions on related accounts opening and capital utilization, and clarified that banks could handle related businesses according to the actual needs of the enterprises on the basis of the 'Three Principles of Business'.

In order to implement the 'Notice of the State Council on Some Measures for Promoting Foreign Trade Growth' (Guo Fa [2017] No. 39), improve and optimize RMB cross-border business policies, create an excellent business environment and serve the Belt and Road initiative construction to promote the formation of a new comprehensive open up pattern, a few days ago, the People's Bank of China promulgated the 'Notice on Further Perfecting the RMB Cross-border Business Policies and Promoting Trade and Investment Facilitation' (hereinafter referred to as the 'Notice'). (Attached full text of the 'Notice' )

The 'Notice' insists on the oriented principle of 'serving the real economy and facilitating trade and investment' of cross-border RMB business and further perfects and optimizes the RMB cross-border business policies to meet the reasonable market needs. Main contents: First, it is clear that all cross-border transactions can be settled by foreign exchange according to the law and enterprises can use RMB to settle accounts. The supporting banks will insist on the oriented principle of 'serving the real economy and facilitating trade and investment' to upgrade financial services capacity, meet the real and eligible cross-border RMB business needs according to the existing cross-border RMB business policies and innovative financial products The second is to serve the ' Belt and Road' construction to meet the individual needs of cross-border RMB settlement such as employee remuneration, social welfare and household funds, etc. The 'Notice' clearly stipulates that banks may, on the basis of the 'Three Principles of Business,' handle other current account RMB cross-border payment and receipt business for individuals, to facilitate domestic individuals to send legitimate overseas income to the China and to send domestic legitimate RMB to abroad for overseas individuals. Thirdly, implement green development concept, clarify the relevant provisions on the cross-border RMB settlement business of carbon emissions permit trading for overseas investors and supported overseas investors to participate in the domestic carbon emission trading using RMB. Fourth, facilitate foreign investors to invest directly in RMB. The 'Notice' further optimized the business handling process, removed the restrictions on relevant accounts opening and capital utilization, clarified that banks could handle related businesses according to the actual needs of the enterprises on the basis of the 'Three Principles of Business'. The 'Notice' requires banks to ensure the legal free remit of overseas investors' income from investment, such as RMB profits and dividends. Fifthly, make sure the bonds issued overseas by domestic enterprises and RMB funds raised by the stocks may be transferred back to the China and use for actual needs, further simplify the management process and facilitate the day-to-day operation of the enterprise.

The implementation of the 'Notice' will be conducive to further enhancing the facilitation of trade and investment, enhancing the ability of financial institutions to serve the real economy and serve the 'Belt and Road' construction, and will be conducive to promoting a deeper and higher level of opening up for our country.

Since pilot launch of RMB settlement for cross-border trade in 2009, the PBC had adhered to the principle of market-driven and continuously perfected its cross-border RMB business policies in line with the needs of market players to facilitate market players carry out cross-border trade investment and financing activities, help market players avoid exchange rate risks and reduce financial costs. In the future, the PBC will further implement the spirit of the 19 th CPC National Congress, continuously improve the financial-service real economy ability, implement a high-level trade and investment liberalization facilitation policy and promote the formation of a new pattern of full opening up.

People 's Bank of China Further Improves RMB Cross - Border Business Policies and

Promote Trade and Investment Facilitation Notice

People's Bank of China Shanghai headquarters, branches, business management department, provincial capitals (capital city) urban center branch, sub-provincial city center branch, policy banks, state-owned commercial banks, joint-stock commercial banks, China Postal Savings Bank:

In order to implement the 'Notice of the State Council on Several Measures for Promoting Foreign Investment Growth' (GF [2017] No.39), improve and optimize RMB cross-border business policies, promote trade and investment facilitation, create an excellent business environment and serve 'Belt and Road' Construction, promote the formation of a new pattern of full open up, the relevant matters are hereby notified as follows:

First. support enterprises to use RMB cross-border settlement

If cross-border transaction can use foreign exchange settlement legally, enterprises can use RMB settlement accordingly. Banks should serve the real economy and promote the facilitation of trade and investment. According to the cross-border RMB policy, banks should innovate RMB financial products and enhance their financial services capabilities to fully meet the customers' needs for real and eligible RMB cross-border business.

Second. carry out the RMB cross-border settlement business of other current accounts of individuals.

Banks can handle cross-border RMB settlement of other current accounts for individuals on the basis of the three principles of 'Know Your Users', 'Know Your Business' and 'Due Diligence'.

Third. carry out carbon emissions permit trading RMB cross-border settlement business

In accordance with the relevant regulations of the competent department of carbon trading under the State Council, overseas institutions conducting carbon emission trading in RMB through domestic carbon emissions trading institutions should in accordance with the " Administration Measures of RMB Banks Settlement Accounts in Overseas Institutions" (Yin Fa [2010] No. 249 paper print) and "Notice of the People's Bank of China on Relevant Issues Concerning the Overseas Institutions RMB Bank Settlement Accounts Open and Use " (Yin Fa [2012] No. 183) and other regulations, the bank shall open overseas institutions carbon trading RMB special deposit account and handle capital receipt and payment under carbon emission right transaction item.

Fourth. facilitate foreign investors to invest directly in RMB

Further improve and optimize the "Administrative Measures on Foreign Merchant Direct Investment RMB Settlement Business" (No. 23 Notice of the People's Bank of China〔2011 ), the Notice of the People's Bank of China on the Operating Detailed Rules of Foreign Merchant Direct Investment RMB Settlement Business (Yin Fa [2012] No.165) Related regulations:

(1) If abroad investors intend to set up a number of foreign-invested enterprises or projects in China, they can open RMB upfront fee special deposit account respectively.

(2) The information registration and review of foreign-invested enterprises shall be handled by the bank where the enterprise is registered through the RMB cross-border payment and receipt information management system and registered place the branches of the People's Bank of China will do the after-management.

(3) Foreign-invested enterprises can open RMB capital fund special deposit account in different places, and can open more than one RMB capital fund special deposit account. RMB capital fund special deposit accounts under the same name can transfer funds among each other.

(4) If foreign-invested enterprises RMB capital and overseas loan capital is used for salaries, travel expenses, sporadic purchases and other expenses, the bank can handle business directly in accordance with the enterprise payment instructions based on the three principles of business.

(5) If foreign investors use RMB to participate in the domestic enterprise transfer transactions of state-owned property, if the transaction is successful, the RMB guarantee money should be remitted to the designated institution of the state-owned assets supervision and administration department and can be used as capital for subsequent property rights transactions or as contribution to the subsequent establishment of a foreign-investment enterprise and deposit into the appropriate special deposit accounts. If the transaction is unsuccessful, the RMB guarantee money remitted by the overseas investors will be repatriated.

Other business activities involving foreign investors' remittance of RMB security deposit and receipt of RMB transaction price by a third-party institution in China according to the relevant regulations of the state may be referred to the above provisions for capital transfer.

(6) For profits, dividends and other investment income of overseas investors in accordance with the law in the country, the bank will review relevant documents and the make cross-border settlement of RMB to ensure the free remit of foreign investors' legal profits.

Fifth. facilitate overseas enterprises to raise RMB funds and remit in domestic to use

After domestic enterprises issue RMB bonds abroad and handle the relevant formalities in accordance with the macro-prudential regulations on all scope cross-border financing , they may remit the raised funds to domestic and use according to actual needs. The RMB funds raised by domestic enterprises for overseas raised stock issuance may be remitted to China for actual use.

Banks shall fulfill the obligation of submitting information and submit information to the RMB cross-border payment and receipt information management system timely, accurately and completely. In accordance with the 'Anti-Money Laundering Law of the People's Republic of China' and other relevant provisions, banks should earnestly implement their anti-money laundering and anti-terrorist financing and anti-tax evasion obligations when handling RMB cross-border business.

This notice shall come into force as of the date of promulgation. In the case of conflict with previous provisions, this provision shall prevail

Branches above sub-provincial city center sub-branch of People's Bank of China shall forward this notice to branches of the People's Bank of China branch offices, foreign banks and local financial institutions in area under administration