Interim Measures on the Management of Foreign Debts

Interim Measures on the Management of Foreign Debts

Order of the State Development Planning Commission, the Ministry of Finance, and State Administration of Foreign Exchange No.28

January 8, 2003

The Interim Measures on the Management of Foreign Debts which are enacted with a view to regulating the act of raising foreign debts, bringing more benefits from the use of foreign debt funds, and avoiding the risk of foreign debts, and are hereby promulgated and shall come into effect as of March 1, 2003.
Director of the State Development Planning Commission Zeng Peiyan
Minister of the Ministry of Finance Xiang Huaicheng
Director of the State Administration of Foreign Exchange Guo shuqing

Chapter I General Provisions
　
Article 1 The present Measures are enacted with a view to regulating the act of raising foreign debts, bringing more benefits from the use foreign debt funds, and avoiding the risk of foreign debts.
　
Article 2 The term "foreign debt" as mentioned in the present Measures refers to the debts owed by domestic institutions to non-residents in the form of foreign currency.
　
Article 3 "Domestic institutions" as mentioned in the present Measures refers to the permanent bodies established according to law in the territory of China, including but not limited to the governmental organs, domestic financial institutions, enterprises, institutions and social organizations.
　
Article 4 "Nonresidents" as mentioned in the present Measures refer to the institutions and natural persons abroad, and the nonpermanent institutions established according to law in the territory of China.
　
Article 5 In accordance with the classification of the debts, foreign debts shall be divided into loans offered by foreign governments, loans offered by the international financial organizations and international commercial loans.
1. Loans offered by the foreign governments refer to the official credit raised by the Chinese government from foreign governments;
2. Loans offered by the international financial organizations refer to the noncommercial credit which the Chinese government owes to the World Bank, Asia Development Bank, Agricultural Development Funds of the United Nations and other international or regional financial organizations; and
3. International commercial loans refer to the commercial credit which the domestic institutions owe to the nonresidents, including:
(1) loans raised from overseas banks or other financial organizations;
(2) loans borrowed from overseas enterprises, or other financial organizations and natural persons;
(3) medium-term or long-term bonds (including convertible bonds) issued by foreign banks or short-term bonds (including commercial negotiable instruments, and large amount transferable deposit receipts);
(4) the buyers' credit, deferred payment and trade finance in other forms;
(5) international financial leases;
(6) foreign currency deposits of nonresidents;
(7) debts repaid in cash in compensation trade; and
(8) international loans of other categories.
　
Article 6 According to the responsibility for the repayment, foreign debts may be divided into sovereign debts and non-sovereign debts.
1. The sovereign debts refer to the foreign debts borrowed by the institutions authorized by the State Council in the name of the state and guaranteed with the state credit for the repayment; whereas
2. The non-sovereign debts refer to other foreign debts except as of the sovereign debts.
　
Article 7 "Foreign guaranty" mentioned in the present Measures refers to the guaranty provided by the domestic institutions for the nonresidents in accordance with the Guaranty Law of the People's Republic China through means of surety, mortgage, and pledge. Potential obligations for the repayment of the foreign debts resulting from the foreign guaranty shall be regarded as feasible foreign debts.
　
Article 8 The State shall conduct an overall control over all of the foreign debts and feasible foreign debts.
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