(Jan. 24, 2018) On December 29, 2017, China’s foreign exchange regulator, the State Administration of Foreign Exchange (SAFE), issued a circular regulating overseas cash withdrawals using Chinese bank cards. (Guojia Waihui Guanliju Guanyu Guifan Yinhangka Jingwai Da’e Tiqu Xianjin JIaoyi de Tongzhi [SAFE Circular on Regulating Large Overseas Cash Withdrawals on Bank Cards] (SAFE Circular) (Dec. 30, 2017), SAFE website.) The Circular, effective January 1, 2018, provides that an individual may withdraw no more than RMB100,000 (about US$15,530) annually from outside of mainland China.
Individuals exceeding the quota will be banned from withdrawing cash for the rest of the year as well as for the following year. The Circular also imposes a cap on daily overseas withdrawals, which may not exceed RMB10,000 (about US$1,555) on a single card, and prohibits evading the restrictions by using cards borrowed from others. (Id.)
Previously, in 2015, SAFE had established the same annual cap of RMB100,000 on overseas withdrawals for a single bank card. (China to Tighten Controls on Overseas UnionPay Cash Withdrawals, XINHUANET (Oct. 2, 2015).) The new rule extends the restrictions to include an individual’s use of multiple bank cards, imposing the same cap amount as for a single bank card.
According to SAFE, increasing the restrictions on annual overseas cash withdrawals is a move to prevent money laundering, terror financing, and tax evasion. (SAFE Circular.) China has also reportedly sought to limit foreign exchange purchases by its citizens in order to conserve foreign exchange reserves, and the new Circular “plugs one of the few remaining ways Chinese citizens get money out of the country.” (Charles Clover & Tom Mitchell, China Steps Up Capital Controls with Overseas Withdrawal Cap, FINANCIAL TIMES (Dec. 31, 2017).)