Overview

The Circular on the Issues Relating to the Provision of Foreign Security by PRC-incorporated Entities was officially promulgated by the State Administration for Foreign Exchange (SAFE) on 30 July 2010 and took effect on the same day. It has relaxed the old regime of foreign security (including guarantees as well as proprietary security interests) under Chinese law, in particular in relation to the giving of foreign security for a third party’s obligations.

A general quota administration system has been introduced, and in some cases replaces the case-by-case SAFE approval regime, for third party foreign security. The position regarding the provision of foreign security for an entity’s own obligations (for which prior SAFE approval is generally not required) and the post-event SAFE registration remain largely unchanged.


To read this article in full click ‘View Briefing’