Where a pilot enterprise receives proceeds or pays in renminbi in advance, the domestic settlement bank shall indicate the nature of such advance payment/receipt and the anticipated date of customs declaration provided by the pilot enterprises when reporting information of the related transactions to the renminbi cross-border payment/receipt information management system. After the pilot enterprise informs its commercial bank of the completion of customs declaration or failure to declare as per preset schedule, the domestic settlement bank shall report the updated information to the renminbi cross-border payment/receipt information management system. The percentage of advance renminbi payment/receipt is managed, and the specific rules are to be formulated by local PBC offices. Should the pilot enterprise's advance payment/receipt of renminbi funds exceed 25 percent of the contract value, it should provide the trade contract to the domestic settlement bank, which shall report the basic terms of contract to the renminbi cross-border payment/receipt information management system.

The renminbi cross-border payment/receipt information management system is accessible to all the domestic settlement banks for the convenience of consistency examination.

Article 16 Where a pilot enterprise receives a sum of renminbi proceeds from a processing trade transaction that exceeds 30 percent of the contract value, the pilot enterprise shall, within 10 working days upon the receipt of such renminbi proceeds, provide its domestic settlement bank with the following documents:

(1) An explanation for receiving renminbi proceeds above the set threshold;

(2) The export declaration form (the original shall be presented to the domestic settlement bank for examination and a copy of the original shall be submitted for file purpose);

(3) The processing trade contract, or the license for processing trade issued by local commerce authorities (the original shall be presented to the domestic settlement bank for examination and a copy of the original shall be submitted for file purpose).

A domestic settlement bank shall not provide further receipt and payment services for renminbi funds that exceed 30 percent of the contract value for a pilot enterprise that fails to provide such documents within the prescribed period, and shall, in serious cases, suspend the renminbi settlement services of cross-border trade transactions provided to the pilot enterprise, and report such cases to the local PBC office.

Article 17 A domestic agent bank shall process cross-border renminbi settlements through the Large Value Payment System (LVPS) run by the PBC and provide information on the relevant cross-border settlements when, acting as an agent of an overseas participating bank, conducting cross-border renminbi settlements with a domestic settlement bank.

Article 18 A domestic settlement bank and a domestic agent bank shall earnestly fulfill the obligations of anti-money laundering and counter-terrorist financing in accordance with the Law of the People's Republic of China on Anti-money Laundering and the Regulations on the Anti-money Laundering of Financial Institutions (PBC Decree No. 1 [2006]), the Administrative Rules on the Reporting of Suspicious Transactions Related to Terrorist Financing by Financial Institutions (PBC Decree No. 1 [2007]), and the Administrative Rules for Financial Institutions on Customer Identity Verification and Record Keeping of Customer Identity and Transaction Information (PBC Decree No. 2 [2007]).

Article 19 A domestic settlement bank shall, in accordance with relevant regulations of the PBC, verify the identity of natural persons such as the legal representative and actual beneficiaries of a pilot enterprise through the identity verification network or other effective measures. Where the identity of such natural persons of a domestic enterprise cannot be verified, a domestic settlement bank shall not provide renminbi settlement services for cross-border trade transactions of the enterprise.

Article 20 A domestic agent bank shall report the receipt, payment, balance, inter-bank borrowing and the purchase and sales of renminbi of the inter-bank fund transfer accounts to the Cross-border Renminbi Receipt and Payment Information Management System at the end of each day.

A domestic agent bank and renminbi clearing banks in Hong Kong and Macau shall report the volume and balance of inter-bank borrowing of the day to the Cross-border Renminbi Receipt and Payment Information Management System at the end of each day.

Article 21 A pilot enterprise and its domestic settlement bank shall report indirectly balance of payments (BOP) transactions under the pilot program for BOP statistics purpose in accordance with the Pilot Operation Procedures for the Reporting of Balance of Payment Transactions for BOP Statistics Purpose through Financial Institutions and other regulations. A domestic enterprise shall, upon receiving renminbi funds from overseas, fill in the Overseas Proceeds Report Form and report the BOP transaction within 5 working days. A pilot enterprise that makes overseas renminbi payment shall report the BOP transaction as it provides the Application for Overseas Remittance or Notification for Overseas Payment/Acceptance. A domestic settlement bank shall improve its interface procedures in accordance with the regulations on the standards of data interface of banking business systems issued by the State Administration of Foreign Exchange.

A domestic settlement bank and a domestic agent bank shall report the overseas assets and liabilities denominated in renminbi as well as their profits and losses in accordance with the Procedures on Reporting the Overseas Assets and Liabilities of Financial Institutions as well as Their Profits and Losses and other relevant regulations.

Article 22 A domestic agent bank may, in accordance with relevant regulations of the PBC, square the renminbi positions resulting from renminbi purchases and sales conducted for an overseas participating bank as provided in Article 11 of the Rules.

Article 23 Renminbi liabilities of a resident to a non-resident under cross-border trade shall be registered by domestic settlement banks, domestic agent banks and pilot enterprises in the current system as external debt in accordance with the regulations on compiling and monitoring statistics of external debt on a tentative basis, but shall not be included in the current external debt management.

Article 24 The PBC shall monitor the consistency between renminbi receipts and payments of a domestic settlement bank and the import and export of goods through the Cross-border Renminbi Receipt and Payment Information Management System, and, in case of inconsistency, may initiate investigations on relevant pilot enterprises, domestic settlement banks and domestic agent banks and verify relevant information in accordance with the law.

Article 25 Where a pilot enterprise deposits its renminbi export proceeds in an overseas bank, the pilot enterprise shall provide the amount of renminbi funds to be deposited overseas, the opening bank, use of the funds and the serial number of the corresponding export declaration form to its domestic settlement bank, which shall report such information to the Cross-border Renminbi Receipt and Payment Information Management System.

Article 26 Where a domestic agent bank or an overseas participating bank violates the provisions of the Rules, this Regulation and other regulations of the PBC in the opening and use of renminbi-denominated inter-bank fund transfer accounts, the PBC shall impose penalties on the bank in accordance with relevant provisions of the Administrative Rules on Renminbi Settlement Accounts.

Article 27 Where a domestic settlement bank or a domestic agent bank fails to report relevant information on renminbi settlement of trade transactions to the Cross-border Renminbi Receipt and Payment Information Management System as provided by relevant regulations, the PBC may ban the bank from providing renminbi settlement services for cross-border trade transactions, and to issue a public notice of admonishment against the bank.

Article 28 Where a domestic settlement bank, a domestic agent bank or a pilot enterprise fails to register renminbi liabilities and report balance of payments (BOP) transactions under the pilot program for BOP statistics purpose when conducting renminbi settlement of trade transactions as provided by relevant regulations, the State Administration of Foreign Exchange shall impose penalty on the bank or the enterprise in accordance with relevant regulations.

Article 29 The PBC shall exclude a pilot enterprise that violates the provisions of the Rules, this Regulation and other regulations from the pilot program, and shall record such violations in the PBC's basic enterprise credit information database.

Article 30 The Regulation shall come into force on the day of its release.

Source: www.pbc.gov.cn