China Law Insight : China Law Insight: China Commercial and Intellectual Property Lawyers and Attorneys, Full Service Law Firm: King & Wood

核准管理：在之前的《对外承包工程项目投标（议标）许可暂行办法》和相关的补充通知中，外经贸部（商务部）针对企业的项目申请颁发许可，而许可的主要用途是企业据之向银行申请开具保函。在新的招标管理办法中，商务部负责对外承办工程的项目核准工作，对于符合条件的，商务部颁发《对外承包工程项目投标（议标）核准证》。

核准范围：“走出去”以投标或议标方式承包合同报价金额不低于500万美元的境外建设工程项目的企业或其他单位，应当在对外投标或议标前办理对外承包工程项目投标（议标）核准。其中对外承包工程项目的范围涵盖了工程项目的咨询、勘察、设计、监理、招标、造价、采购、施工、安装、调试、运营、管理等活动。

申请要求：对于申请工程项目的企业而言，新的投标管理办法中对于申请材料的要求有所减少和简化，而且将通过商务部“对外承包工程项目数据库系统”进行网上申请，商务部进行网上核准，这些措施减少了申请企业的工作，简化了核准工作的流程。同时，投标管理办法中也明确了不予办理项目核准的7种情形，涵盖了企业存在受到处罚、不规范经营、发生重大事故、欺诈等情形。

银行业务：与之前的许可主要用于企业据之向银行申请开具保函不同，投标管理办法规定，获得核准的企业可以就相关项目向银行和保险公司申请办理保函、信贷或信用保险。在申请项目保函、信贷或信用保险时，企业应当提交《核准证》等相关文件。投标管理办法规定，银行等机构不得向未依据该办法办理对外承包工程项目核准的企业开立保函、提供信贷或信用保险。

The Notice has simplified the administrative procedures for obtaining overseas security, mitigated some of the former restrictions, and clarified relevant administrative requirements.Compared with former policies, the Notice has primarily brought about the following changes:

1 Expansion Quota-based Administration and Change in Quota Determination Methods

Pursuant to the Notice, banks are no longer the only ones that may apply to SAFE for granting of overseas financing security quotas; non-banking entities that frequently provide overseas security may also apply to SAFE for granting of a quota if they have a sound internal management system.Within such a quota granted by SAFE, such banks or entities may provide ordinary security in favor of foreign entities without the need to obtain SAFE approval on a case-by-case basis.The provision by banks of non-financing security in favor of foreign residents is neither subject to quota restrictions nor to SAFE's case-by-case approval.

The determination of a quota balance for overseas security by banks and non-banking financial institutions are no longer based on the amount of their foreign currency-denominated registered capital or working capital; instead, determination will be made based on the consolidated amount of their paid-in registered capital or working capital both in RMB and in foreign currencies, or on their net foreign currency-denominated assets.For any non-financial enterprise, its quota shall not exceed 50% of its net assets.

2 Fewer Restrictions on Qualification of Debtor

Under the Notice:
(a) in the case of overseas financing security provided by banks, the qualification of the debtors is not subject to any regulatory restrictions and will determined by banks in accordance with their business needs and the capacity of their internal risk control;

(b) in the case of overseas non-financing security provided by banks, the Notice only requires that either the debtor or the beneficiary is a domestic entity or otherwise a foreign entity which has equities directly or indirectly owned by a domestic entity;

(c) in the case of overseas security provided by non-banking financial institutions, the debtor has to be a domestic entity ora foreign entity which was established by, or which has equities directly or indirectly owned by, a domestic entity;

(d) in the case of overseas security provided by a non-financial enterprise, the debtor is a domestic or foreign entity established by, or which has equities directly or indirectly owned by, the security provider.

3 Fewer Restrictions on Financial Status of the Debtor

The Notice has revoked the rule that no overseas security shall be allowed for debtors operating at a loss. Pursuant to the Notice, the debtor must have a positive net assets value, and must have recorded a profit for at least one of the most recent three years.Where the debtor carries on long-term projects such as resource development, it must have recorded a profit for at least one of the most five years. In case of debtors having an operating history of shorter than three years (for general businesses) or five years (for resource development businesses), no requirement for profit is mandatory.

The Notice has also revoked the rule that the value of security is limited by proportion of Chinese contributions where the debtor is a Sino-foreign domestic or overseas joint venture.

4 Simplification of the Administration Procedures

The Notice has revoked the prior verification requirement for banks to every time perform overseas security.The Notice also provides for periodical filing, instead of real-time registration, for quota-based overseas security by banks.

5 Removal of Approval Exemption Treatment for Wholly Foreign Owned Enterprises

The Notice provides that wholly foreign owned enterprises shall be treated with reference to the policy for general enterprises when providing overseas security and shall obtain case-by-case verifications and registrations, and are no longer entitled to approval exemption policies.

6 Others

The Notice also has specific provisions in the following aspects:

(a) Required proportion of the net assets to gross assets of non-financial enterprises providing overseas security is unified for trading and non-trading enterprises and is now 15%;

(b) In case of overseas financing security provided for outbound investments, the proceeds of the security shall not, by way of lending, equity investment or securities investment, whether directly or indirectly through third party, be transmitted inbound for domestic use;

(c) Counter-security provided for debtors by domestic entities in favor of the domestic security provider under overseas security is no longer administered as overseas security.

Previously, regulatory requirements with regard to offshore lending were mainly found in the 2004 SAFE Notice on Certain Issues Relating to Internal Management of Foreign Currency Funds by the Multinational Companies (the “2004 Notice”). The purpose of the 2004 Notice was to optimize the allocation of foreign currency funds and to facilitate the utilization of foreign currency inter- company loans between members of multinational companies headquartered in the PRC. In accordance with Clause 23 of the new Notice, if there is any inconsistency between the 2004 Notice and the new Notice, the new Notice shall prevail. We set out below an introduction on the key features of the Notice and its relevant provisions.

Key Features of the Notice

1. Lender and Borrower under an Offshore Lending
In accordance with the Notice, eligible domestic enterprises of any type would be permitted to provide foreign currency loans to their wholly owned subsidiaries or for the equity of enterprises legally incorporated offshore.

2. Qualification Requirements for Offshore Lending
The requirements set out in the Notice for offshore lending by domestic enterprises to their offshore wholly-owned subsidiaries or equity interests include: Both the lender and the borrower have been legally incorporated with fully paid-up registered capitals; All foreign direct investment projects of the lender in the past years have been verified by the regulatory authorities in charge of foreign investments and filed with SAFE under foreign exchange registrations, and the lender (incorporated and existing for more than one year) has gained a second (or above)-grade ranking in the latest joint annual inspection of foreign investments, etc.

3. Forms of Offshore Lending
The forms of offshore lending as provided in the Notice are as follows:
(1) Direct lending, namely the domestic enterprise extends loan facilities directly to its wholly-owned subsidiaries or equity interests legally incorporated offshore;
(2) Entrustment loans, namely lending in the form of entrustment loans through a designated foreign exchange bank or the finance company of an enterprises group duly incorporated and qualified to conduct foreign exchange business.

4. Lending Threshold
The Notice supervises the offshore lending outstanding balance amount, and provides that the outstanding balance of a lender's offshore lending shall be limited to the lower of: (i) 30% of the lender's owner equity, and (ii) the duly registered investment amount of the Chinese party as agreed.

5. Verification of Outbound Remittance of Funds
The Notice simplifies the verification procedure of outbound remittance of foreign exchange funds. Subject to the verified offshore lending threshold and the effective term of lending, domestic enterprises engaged in offshore lending are permitted to re-lend the funds that have been repaid without the need to obtain SAFE verification for each of the loans.

6. Sources of Funds for Lending
The sources of funds for offshore lending as provided in the Notice have been expanded to not only include the self-owned foreign currency funds of the lender (as provided in the 2004 Notice), but also includes foreign currency funds converted from RMB funds and the funds in the foreign exchange capital pool as verified by SAFE.

7. The Income and Payment Scope of the Special Account for Lending
Compared to the 2004 Notice, the Notice has enlarged the income and payment scope of the Special Account for Lending.

8. Domestic Transfer of Funds
The Notice simplifies the verification procedure for domestic transfer of funds under offshore lending. Except for the outbound remittance of funds under the offshore lending from the Special Account for Lending and the inbound remittance of funds for repayment of principal and interest or enforcement of security to the Special Account for Lending, other domestic transfers of funds between the relevant foreign exchange accounts and the Special Account for Lending would not be subject to verification by the local SAFE. The lender may proceed with such transfer with the designated foreign exchange bank by presenting the relevant verification documents in respect of the offshore lending.

9. Statistical Monitoring and Risk Precaution under Offshore Lending
The Notice improves the statistical monitoring and risk precaution mechanism under offshore lending. For example, matters such as the verification of the offshore lending threshold, the opening of the Special Account for Lending, the domestic transfer of foreign exchange capital and the outbound and inbound remittance are supervised under the SAFE foreign exchange administration information system for foreign direct investments. Meanwhile, the Notice provides SAFE with the discretion to make timely adjustments to the qualification requirements for offshore lending, the sources of funds, the amount and the term of the lending etc., according to the balance of payments and the development in the offshore lending business.
 

Conclusion
Compared to the 2004 Notice, the Notice has reduced the qualification requirements for offshore lending, expanded the sources of funds, and simplified the verification and remittance procedure for offshore lending. Currently, domestic enterprises have achieved great success in their offshore investments. However, the difficulty in obtaining financing offshore and the shortage of floating capital has been an obstacle to the further developments of offshore Chinese funded enterprises. The issue of the Notice would encourage more Chinese enterprises with strong capital strength to “go abroad”, further facilitate investment and trading so as to stabilize the offshore demands and to deal with the international financial crisis in an effective way.

背景
为解决已“走出去”的境外中资企业在境外融资难和流动资金不足的问题，支持更
多有资金实力的企业“走出去”，提高境内企业的资金使用效率，国家外汇管理局（以
下简称“外管局”）于2009 年6 月9 日发布了《关于境内企业境外放款外汇管理有关问
题的通知》（以下简称“《通知》”），并将于2009 年8 月1 日起开始实施。
《通知》发布以前，与境外放款有关的外汇管理方面的规定主要为外管局于2004
年10 月18 日颁布的《国家外汇管理局关于跨国公司外汇资金内部运营管理有关问题
的通知》（以下简称“汇发【2004】104 号文”）。汇发【2004】104 号文旨在优化外汇
资源配置，便利和支持总部设在中国的跨国公司成员之间进行外汇资金的拆放。根据
《通知》第23 条的规定，汇发【2004】104 号文中涉及境外放款的外汇管理条款与
《通知》有冲突的，以《通知》为准。
我们将在下文介绍《通知》的主要特征及其相关规定。本简报旨在做出一般性的
指引，而不构成对某一特定案例的具体意见。
《通知》的主要特征
一、境外放款的主体和对象
根据《通知》的规定，只要符合一定条件，任何类型的境内企业均可为其在境外合法
设立的全资附属企业或参股企业发放外汇贷款。
二、境外放款的资格条件
《通知》规定的境内企业向其境外全资附属企业或参股企业放款的条件包括：放款人
和借款人均依法注册成立，且注册资本均已足额到位；放款人历年的境外直接投资项
目均经国内境外投资主管部门核准并在外管局办理外汇登记手续，且参加最近一次境
外投资联合年检评级为二级以上（成立不足一年的除外）等。
三、放款形式
《通知》规定的境外放款形式有：
（1）直接放款，即由境内企业直接向其境外合法设立的全资附属企业或参股企业提供
放款；
（2）委托贷款：即通过外汇指定银行或经批准设立并具有外汇业务资格的企业集团财
务公司以委托贷款的方式进行放款。
四、放款额度
《通知》对境外放款实行余额管理，并规定放款人的境外放款余额不得超过其所有者
权益的30%，同时不得超过借款人已办妥相关登记手续的中方协议投资额，以低者为
限。
五、资金汇出的核准
《通知》简化了外汇资金汇出的核准手续，在核准的境外放款额度和有效期内，从事
境外放款的境内企业可将已回收的境外放款额度循环使用，而无需就每次放款单独取
得当地外管局的核准。
六、放款的资金来源
《通知》规定的放款资金来源由汇发【2004】104 号文的自有外汇资金扩大到企业
的自有外汇资金、人民币购汇资金以及经外管局核准的外币资金池资金。
七、放款专用账户的收支范围
《通知》在汇发【2004】104 号文的基础上扩大了境外放款专用账户的收支范围。
八、放款资金的境内划转
《通知》简化了境外放款所涉及的境内划转核准手续，除放款资金由境外放款专用
账户汇出境外或还本付息、担保履约等资金由境外汇入境外放款专用账户需当地外
管局核准外，资金在境内相关外汇账户与境外放款专用账户之间的划转，放款人可
持境外放款核准文件等到外汇指定银行直接办理，无需当地外管局的另行核准。
九、境外放款的统计监测与风险防范
《通知》完善了境外放款的统计监测与风险防范机制，主要体现在：将境外放款的
额度核准、境外放款专用账户、境内外汇资金划转以及汇出、汇入等纳入国家外管
局直接投资外汇管理信息系统；设定了国家外管局可以根据我国国际收支形势和境
外放款情况，对境内企业放款资格条件、来源、数量以及期限等进行适时调整的保
障条款。
总结
相较汇发【2004】104 号文，《通知》在保证风险可控的前提下，最大程度地
降低了放款人的资质门槛，对资金来源明显放宽，同时简化了境外放款的核准
和汇兑手续。目前我国境外投资取得了积极成效，但境外融资难和流动资金不
足的问题一直影响了境外中资企业的进一步发展壮大。《通知》的及时出台将
有利于支持更多有资金实力的企业“走出去”，进一步促进投资贸易便利化，
以稳定外需，更好地应对国际金融危机。
 

In the first half of 2008, overseas investment of Chinese companies has more than doubled from last year. This year, Chinese outbound investment has already reached 16 billion euros (nearly $23 billion) according to Bloomberg.

Correspondingly, we have seen an increasing number of our domestic Chinese clients invest abroad for both market seeking and resource seeking opportunities. We expect this trend to accelerate in the coming years as outbound rules continue to be relaxed and domestic companies shift their strategies to compete globally.

This trend, coupled with close working relationships with a significant number of American companies and law firms have lead King & Wood to establish its New York office opening September 9th, 2008. As a firm with an extensive client list in the banking industry, our location on Madison Avenue will serve as serve as a local presence for many of our American clients and also provide international support for our clients at home. Since 2001, King & Wood has made a series of international moves such as San Francisco, Hong Kong, Tokyo and most recently with our Sydney Strategic Alliance at the end of 2007.

For years we have seen U.S. and European law firms expand into China. As the global clout of Chinese companies grows, we will see continue to see Chinese law firms expand with them.

There are three very prominent features of the Master Agreement. First, it adopts the “single agreement” scheme. The single agreement scheme combines all the necessary schedules, confirmations, and CSAs into the one Master Agreement. Second, the concept of “netting” is utilized. Parties can choose netting not just within one transaction, but across different transactions if specified. In the event of early termination close-out netting is even allowed, minimizing loss upon credit failure. Third, close-out amounts are narrowly tailored to the Chinese market. An example of such a Chinese-specific provision is that tax–related aspects are largely ignored since it is assumed that the Master Agreement will be used for domestic dealings.

The Master Agreement is not without its flaws, but they are far outweighed by the progress that it represents. Issues such as the validity of netting in bankruptcy situations and uncertainties regarding alternatives for documentation are comparatively minor and can be settled by practice. There is little doubt that this significant advancement will notably promote prosperity within the domestic financial derivatives market.