As we enter 2014, a series of new regulations and policies are being implemented, among which the requirement for individuals to declare their overseas financial assets and liabilities to the State Administration of Foreign Exchange has particularly attracted public attention. "Chinese residents who possess foreign financial assets and liabilities are required to declare their relevant foreign financial assets and liabilities in accordance with the regulations of the State Administration of Foreign Exchange."
The term "residents" in the new "Declaration Measures" refers to residents in a statistical sense, including both institutions and individuals. Specifically, it refers to natural persons residing in China for more than one year, excluding foreign students, employees, foreign diplomatic staff and their families in China from Hong Kong, Macau, and Taiwan; short-term travelers from China (those residing abroad for less than one year), students studying abroad, medical patients, and staff of Chinese diplomatic missions abroad and their families; enterprises and institutions legally established in China (including foreign-invested enterprises and foreign financial institutions) and their representative offices in China (excluding international organizations and foreign diplomatic missions); and Chinese state organs (including Chinese diplomatic missions abroad), groups, and military units. "Not all individuals with overseas financial assets and liabilities are required to declare; only those with financial assets and liabilities above a certain amount are subject to this requirement."
After the implementation of the relevant provisions in the new "Declaration Measures," enterprises and individuals need not fear the leakage of their overseas financial assets and liabilities data, as the Measures also stipulate confidentiality requirements. "Banks, traders, and institutions providing registration, settlement, and custody services must strictly keep confidential the specific data declared by the declarants that they become aware of during the course of their business operations."
According to industry insiders, institutions began declaring overseas financial assets and liabilities to the foreign exchange administration starting in September 2014, while there is currently no timetable for individual declarations. They also emphasized that after the introduction of the new "Declaration Measures," there have been voices in the community suggesting that "China is going to regulate immigration," but insiders at the foreign exchange administration view it primarily as providing a systematic basis for future statistical standards, stating, "This time, the modification of the system also included individuals."