Fined for Foreign Cash Withdrawals! What‘s Wrong?
Question: Is that legal to withdraw $10,000 five times from the same savings account?
Let’s do a math first. It is $50,000 in total, not exceeding the annual quota of personal exchange sales for individuals.
That’s legal, I think.
However, my answer is wrong.
Recently a branch of Bank of China (BOC) was given a warning and imposed a fine of 40,000 yuan because a man called Geng has withdrawn $10,000 five times within 7 days from the same saving accounts.
According to the State Administration of Foreign Exchange, Geng’s act has violated Article 7 of the Measures for the Administration on Individual Foreign Exchange.
All banks and individuals shall comply with the related provisions of the present Measures in dealing with individual foreign exchange businesses, and may not evade quota supervision through method of splitting or evade authenticity control by means of using false business papers or vouchers.
In other words, Geng’s act was considered as a method of splitting to evade quota supervision.
SAFE has released the Circular of the SAFE Concerning Further Improving Administration of the Foreign Exchange Settlement and Sale Business for Individuals, characterizing individual settlement and sales of foreign exchange through splitting:
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One individual/organization outside the territory of China remits foreign exchange to 5 or more different individuals on the same day/every other day/or on successive days, and these payees separately carry out the exchange settlement. -
Five or more different individuals remit foreign exchange to the same individual/organization outside the territory of China after separately purchasing foreign exchange on the same day/every other day/or on successive days. -
Five or more different individuals deposit/remit RMB funds into the RMB account of the same individual/organization after separately settling the exchange on the same day/every other day/or on successive days. -
An individual withdraws foreign currency notes close to an equivalent of USD10,000 five or more times within 7 days from the same foreign exchange savings account; or five or more individuals jointly settling the exchange of foreign currency notes on the same day at the same bank outlet with each individual settling the equivalent of close to USD5,000. -
The same individual transfers deposits from his/her foreign exchange savings account to more five or more direct relatives who then complete the exchange settlement within the limit on the annual aggregate amount; or five or more direct relatives of the same individual transfer foreign exchange purchased within the limit on the annual aggregate amount to his/her foreign exchange savings account. -
Other acts by which individuals complete exchange settlement and sale by splitting many times through the agency of many persons for the purpose of evading administration of the limitation.
Apparently, Geng complies with the provisions of the circular.
What’s more, the circular stipulates that if the applicants fail to submit the relevant certifications, the banks shall reject the applications.
Therefore, the bank has to bear responsibility and to be punished.
Back to the question, the answer depends on the situation. Because people can still withdraw or purchase more than USD50,000.
When the total sum of the withdrawals has not exceeded the equivalent of USD5,000, the business shall be settled at the bank directly; When the total sum exceeds it, the business shall be settled at the bank by presenting the valid identity certificate.
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SOURCE | BJ News / SAFE
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