Meaning
Administrative delegation of foreign exchange registration for direct investment to qualified commercial banks by the State Administration of Foreign Exchange. Circular 13 clearance removed the requirement for investors to visit government offices for every capital change. This procedure covers registration for both inbound investment and outbound investment by domestic entities.
It stops at the point of registration, with the bank assuming responsibility for the subsequent data entry into the capital account system.
Banking Authority
Institutional oversight shifted from government offices to the commercial banking sector to improve processing speeds. Qualified banks exercise circular 13 clearance by reviewing the legitimacy of foreign investment projects and issuing the required registration certificates. These institutions must follow strict guidelines provided by the central authority to ensure uniform application of national policy across all regions.
Documentary Review
Filing a business license and the relevant approval from the Ministry of Commerce is a mandatory step for applicants. Obtaining circular 13 clearance necessitates the submission of a capital injection schedule and the identity documents of the ultimate beneficial owners. The bank cross-checks these filings against the national information system before updating the registration status.
Post-clearance Supervision
The State Administration of Foreign Exchange maintains oversight through periodic audits of bank records. Success in circular 13 clearance does not end the regulatory monitoring of the transaction. Discrepancies found during these inspections can lead to the suspension of a bank’s authority to process such registrations.
Fines for the enterprise involved are also possible if the submitted data is found to be fraudulent.
