Regulatory Alerts2013-07-09
Added · Updated
Foreign Exchange Conversion in China via the Renminbi Clearing Bank for the Settlement of Eligible Cross-Border Trade
Participating merchant banks are prohibited from conducting foreign exchange conversion in China via a Renminbi Clearing Bank except to settle eligible cross-border trade payments and associated insurance or freight charges. For purchases, conversion must occur no more than three months before the payment is due, and for sales, no more than three months after payment is due. Banks must implement internal controls to verify trades by reviewing documents such as customs declarations and contracts, or rely on a reasonable view of customer profile and track record, and retain related documentation for five years. Additionally, banks must have their internal auditors verify compliance or non-conduct annually and submit reports to the Authority within three months of the financial year end.
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