The Chinese central bank and its ancillary forex authority have issued a new directive calling for the country’s financial institutions to provide greater support to the development of offshore trade.
On 23 December the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) issued the “Notice Concerning Issues in Relation to Support for the Development of New Forms of Offshore International Trade” (关于支持新型离岸国际贸易发展有关问题的通知).
The Notice calls for “further increasing the liberalisation and convenience of trade and expediting the healthy, ongoing and innovative development of new models of foreign trade.”
Matters outlined by the trade include:
- Encouraging banks to optimise financial services, and provide convenient cross-border fund settlement for new forms of offshore international trade by compliant enterprises.
- Banks should formulate operations standards, improve internal management, implement client categorisation and improve service levels based on the unique features of new forms of offshore international trade.
- In order to strengthen internal controls for new forms of international offshore trade, banks should strengthen due diligence and optimise operations reviews.
- Accurately identify the client status and business models of new forms of international offshore trade, and provide dynamic risk categorisation of clients based on their credit status, level of compliance and risk control capability.
The Notice is scheduled to come into effect on 24 January 2022, and will supersede conflicting provisions of the “Multi-national Company Cross-Border Fund Operations Management Provisions” (跨国公司跨境资金集中运营管理规定).