New Rule to Restrict Individual Cross-Border Fund Transfers
Nov. 27 – The State Administration of Foreign Exchange (SAFE) has announced a new rule restricting cross-border money transfers by individuals to protect the foreign exchange market from speculative activity.
Under the new rule, individuals will not be allowed to transfer from one overseas account into five or more bank accounts owned by individuals in China at the same day, every other day or consecutive days reports The Global Times.
The restriction also applies for five or more individual accounts in China sending money to an individual offshore account on the same day, every other day or in seven consecutive days.
The maximum amount of money that mainland residents can send abroad will be maintained at US$50,000.
SAFE has instructed banks to report individual purchases or settlements of foreign exchange suspected of dividing a transaction into several smaller ones to bypass the rule.
This aims to remedy “unusual foreign-capital flows using individual accounts to enter the country, to strike at the foreign-exchange black market and underground banks and to protect the order of the foreign-exchange market environment,” according to a SAFE statement.
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