On 1 August 2008, the State Council approved a draft Amendment to the Regulation of the People’s Republic of China on Foreign Exchange Administration (the “2008 Amendment”). The 2008 Amendment came into effect on 5 August 2008. The 2008 Amendment has created widespread misunderstanding that, as of 5 August 2008, in addition to the existing requirement of registration with the State Administration of Foreign Exchange (“SAFE”) in respect of foreign currency refund guarantees (RGs), there has also been a new requirement to obtain SAFE approval prior to the issuance of RGs.
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