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China: Banks Ordered to Report Overseas Transactions of Chinese Bank Cards

(Aug. 10, 2017) In June 2017, China’s foreign exchange regulator, the State Administration of Foreign Exchange (SAFE), ordered banks in China to collect information, on a daily basis, of overseas transactions made on Chinese bank cards. Starting September 1, 2017, any overseas cash withdrawal or single purchase made with an amount of more than RMB1,000 (about US$150) through a debit or credit card issued by a Chinese bank must be reported to the SAFE.  (Guojia Waihui Guanli Ju Guanyu Jinrong Jigou Baosong Yinhangka Jingwai Jiaoyi Xinxi de Tongzhi [SAFE Circular on Financial Institutions’ Reporting of Information of Overseas Transactions Made Through Bank Cards] (SAFE Circular) (June 2, 2017), SAFE website.)

According to the SAFE Circular, banks must submit information about all overseas transactions made within the last 24 hours, every day, on bank cards they issued, including on festivals and holidays. Banks should start submitting on September 2 the requested data for September 1.  The SAFE will launch a “foreign exchange management system for overseas bank card transactions,” on which the data on bank card overseas transactions will be collected through data ports or interfaces.  (Id.)

On August 3, the SAFE instructed banks to start reporting the requested information on the online management system on August 21, when the system starts its trial operation; that trial will end on August 31. Failure in connecting to the system to report the transactions as instructed by the SAFE will result in suspending the bank’s overseas bank card services from September 1.  (Guojia Waihui Guanliju Zonghe Si Guanyu Yinhangka Jingwai Jiaoyi Waihui Guanli Xitong Shangxian Youguan Gongzuo de Tongzhi  [SAFE General Affairs Department Notice on the Launch of the Foreign Exchange Management System for Overseas Bank Card Transactions] (Aug 3, 2017), SAFE website.)

As reported by the official Xinhua news agency, “[t]he move is intended to improve transparency and data quality of overseas bank card transactions to meet the demands of international cooperation against money laundering, terror financing and tax base erosions, the SAFE said.” (China Strengthens Scrutiny on Overseas Bank Card Transactions, Xinhuanet (June 2, 2017).)