Since August 1, 2019, China Customs has been conducting strict investigations into travellers who leave China with large amounts of USD. Travellers who leave with more than US$20,000 may face administrative penalties and even criminal penalties. When done with consistent intent and large amounts of money, this is indistinguishable from money laundering.
Most countries governments seek to limit offshore banking, and the Chinese government actually does. As everyone knows, each country has a certain amount of restrictions on carrying cash in and out of the country. The United States requires travellers to declare if they carry more than US$10,000, and China’s standard is US$5,000. China has been enforcing these laws more, lately.
China Customs’ announcement regarding cash ignited hot discussions. Netizens said on Weibo that China Customs will conduct strict investigations in order to control huge amounts of foreign currencies. If it is found that the cash has not been declared, then it will be subject to a huge fine, that Customs will be able to collect by enforcement, because China Customs is part of the police force.
But for those who leave the country with less than US$20,000 or enter the country with less than US$50,000, they will be more lenient and only give a warning and no administrative punishment. The government is trying to stop illegal money laundering, and black markets like offshore banking, as all governments say they want to. Foreign capital is flowing fast out of China, and the government is passing more laws to control that.
They seek to avoid similar financial crises that happened to Japan, Taiwan, Thailand, Singapore, and South Korea in the 90s when their economies had modernized with the modern world, much like China has currently.
1. If you carry huge amounts of foreign currency cash in and out of the country without legal declaration to the customs, AND the evidence excludes smuggling, then customs will, in accordance with the principle of appropriateness, deduct the largest possible fine from your seized. Assets, then promptly return the remaining foreign currency.
2. If you carry foreign currency cash out of the country equivalent to less than US$20,000 or into the country equivalent to less than US$50,000, local customs can decide whether to make a warning or impose administrative punishment.
This notice was implemented on August 1, 2019.
Can you carry excess cash?
Yes, you can carry excess cash, but you must apply for a Foreign Exchange Exit Permit before leaving the country, and take the initiative to show this declaration to customs when you leave the country.
The following is an example of ICBC’s handling of foreign exchange exit permits:
When do you need that permit to carry cash?
According to Article 5 of China’s Interim Measures for the Administration of Entry and Exit of Foreign Currency Banknotes: If you carry more than US$10,000, you should apply for a PERMIT CARD from the State Administration of Foreign Exchange.
1. If you are carrying the equivalent of US$5,000 or less, then the PERMIT CARD is not needed, and customs will release the money. Except for multiple round trips on the same day and/or multiple round trips in a short period of time. Making many small transactions under US$5,000 is punishable.
2. If you carry between US$5,000 to US$10,000, you should go to the bank and apply for a PERMIT CARD with your bank deposit certificate, your passport and a valid visa. When leaving the country, customs will check and release the money if you have a PERMIT CARD stamped with the Bank’s seal.
3. If you carry more than US$10,000, then you need to go to the branch offices of the State Administration of Foreign Exchange (hereinafter referred to as the Foreign Exchange Bureau) and get the PERMIT CARD where the Deposit and Foreign Exchange Purchases Bank is located.
4. If you have multiple PERMIT CARDs, and if the total amount of Permit Card stamped with the bank seal exceeds the equivalent value of US$10,000, then Customs will not release the money.
5. The PERMIT CARD is valid for one use within 30 days from the date of issuance.