OREANDA-NEWS. December 29, 2014. In order to promote the construction of a credit system in the field of foreign exchange, strengthen penalties for dishonesty, and urge foreign exchange market players to operate in compliance with the laws, the Department of Management and Inspection of the State Administration of Foreign Exchange (SAFE) and the Credit Information Center of the People’s Bank of China signed a Memorandum of Cooperation regarding the collection of information on foreign exchange violations to be included in the basic database on financial credit information (the “Memorandum of Cooperation”).

According to the Memorandum of Cooperation, starting from January 1, 2015, information on foreign exchange violations by enterprises and public institutions which have been involved in substantial violations and have received administrative penalties for  evasion of foreign exchange controls, illegal purchases of foreign exchange, inward remittances in violation of the regulations, illegal settlements of foreign exchange, arbitrary changes in the use of foreign exchange funds or foreign exchange settlement funds, and illegal trading of foreign exchange will be included in the basic database on financial credit information of the People’s Republic of China (the “Credit Information System”). The relevant information on the foreign exchange violations will be added to the Credit Information System on a quarterly basis and will remain  displayed in the system for five years.

The goal of the inclusion of information on foreign exchange violations in the Credit Information System is to implement the relevant requirements of the Outline for the Planning of the Construction of a Social Credit System (2014–2020) (Guofa No. 21 [2014]), to promote the exchange and sharing of credit information of the financial regulatory authorities, to expand the application of foreign exchange credit information, to strengthen the imposition of penalties for dishonesty in the field of foreign exchange, and to promote operations by foreign exchange market players that are in full compliance with the laws. All foreign exchange market players shall seize this opportunity to further enhance their awareness of operations in compliance with the laws, strengthen internal controls, enhance their level of management, and standardize operational behavior in terms of their foreign exchange business.