Summary:China's current criminal law stipulates that "unauthorized deposit of foreign exchange abroad" is one of the behavior modes of the crime of foreign exchange evasion. Correspondingly, the "Foreign Exchange Management Regulations" in the administrative regulations no longer stipulate this mode as foreign exchange evasion after the revision in 2008. In the field of judicial practice, there is no precedent for the criminal punishment of the crime of evading foreign exchange in this model. The crime of evading foreign exchange, as an administrative offence, should be premised on the violation of administrative norms, and at a time when administrative regulations have been exempted from the act, the continued retention of the penal conditions of "unauthorized deposit of foreign exchange abroad" has become a tree without a source of water, and also conflicts with the new situation of increasingly active cross-border trade and international economic exchanges.

1. Issues raised

With the deepening of economic globalization and the changing internal and external policy environment, enterprises involved in international trade or overseas repayment often face the uncertainty of foreign exchange-related compliance review. For example, is there any risk of administrative punishment or even criminal risk by the foreign exchange administration authorities if a company has long entrusted an overseas enterprise to collect foreign remittances, but no settlement of funds is involved? According to the provisions of the Criminal Law, "depositing foreign exchange abroad without authorization" is one of the constituent elements of the crime of foreign exchange evasion, and if only understood from the context, then the act already meets the criminal constitution of the crime of foreign exchange evasion when the relevant amount is reached. However, the determination of foreign exchange evasion by administrative regulations does not include the act of overseas deposit, and how the enterprise compliance review should deal with the conflict of departmental laws and fully avoid various legal risks, this article will explain from the perspective of the criminal punishability of the "overseas deposit type" foreign exchange evasion.

2. Changes in the criminal law and administrative regulations of the "offshore deposit-type" evasion of foreign exchange.迁

The provisions of the criminal law and administrative law on the "overseas deposit type" foreign exchange evasion behavior have undergone many changes, from the respective revision, addition and deletion process can clearly see that China's illegal behavior of foreign exchange evasion reflects the trend from strict to relatively loose, as well as the foreign exchange trading from strict control to moderate market-oriented trend.

(I) Evolution of Criminal Law

China's legislation on the crime of foreign exchange evasion began in 1952 with the General Administration of Customs's "Order on the Handling of Foreign Exchange Evasion Cases as Smuggling Cases", which stipulates that "foreign exchange evasion and arbitrage, regardless of the method adopted, shall be treated as smuggling cases." At that time, foreign exchange evasion was cracked down as a special crime of smuggling, which had not yet formed an independent crime, and there was no norm for the deposit of foreign exchange abroad.

Article 9, paragraph 1, of the 1988 Supplementary Provisions on the Punishment of the Crime of Smuggling, which for the first time provides for foreign exchange evasion, identifies as one of the objective constitutive elements of the crime of foreign exchange evasion the act of "...... violating foreign exchange regulations and obtaining foreign exchange abroad shall be repatriated to the territory. With the introduction of this provision, the crime of "foreign deposit type" evasion of foreign exchange is taking shape.

In 1997, the Criminal Law comprehensively revised the crime of foreign exchange evasion, in which the objective requirements were changed to "deposit foreign exchange abroad without authorization or illegally transfer domestic foreign exchange abroad". The decision on punishing the crime of fraudulently purchasing foreign exchange, evading foreign exchange and illegally buying and selling foreign exchange issued the following year further revised the criminal subject and legal punishment of the crime of foreign exchange evasion. So far, the provisions of China's criminal law on the crime of foreign exchange evasion and "foreign deposit-type" foreign exchange evasion continue to this day.

The specific regulation of foreign exchange evasion in the field of administrative regulations began with the "Regulations on the Implementation of Penalties for Violation of Foreign Exchange Management" issued in 1985. The rules define the violation of foreign exchange evasion as four acts and explicitly prohibit the deposit of foreign exchange obtained in various forms abroad.

The 1996 "Foreign Exchange Management Regulations" also clearly stipulated four illegal acts of foreign exchange evasion, including "violating state regulations and depositing foreign exchange abroad without authorization".

Since then, with the rapid development of my country's economy and the increasing degree of opening to the outside world, in order to adapt to the foreign exchange management work under the new situation, the "Foreign Exchange Management Regulations" was revised in 2008 and the requirement of compulsory foreign exchange settlement was canceled, it is clearly stipulated that "the foreign exchange income of domestic institutions and individuals may be transferred back to China or deposited abroad" and "the foreign exchange income of current account may be retained or sold to financial institutions engaged in foreign exchange settlement and sale business in accordance with the relevant provisions of the State". Accordingly, the provisions on the illegal acts of foreign exchange evasion have been reduced from the previous four to two, of which the act of "depositing foreign exchange abroad without authorization" is no longer recognized as an illegal act of foreign exchange evasion.

(III) Comparison and observation of criminal law and administrative regulations

The author believes that the change of the relevant norms of the crime of escaping foreign exchange is closely related to the needs of economic development under the background of the times. In 1978, the reform and opening up opened the prelude to the reform of China's foreign exchange management system. In 1994 and 1996, two foreign exchange system reforms were carried out, all restrictions on regular international payments and transfers were abolished, and the current account convertibility of RMB was realized. In the same year, the "Foreign Exchange Management Regulations" were promulgated. However, the Asian financial crisis in 1997, which followed, had a serious impact on China's economic development and financial stability. In order to prevent the further spread of the crisis, China made a commitment not to devalue the RMB, and focused on strengthening the management and crackdown on illegal capital flows such as foreign exchange fraud, and the 1997 Criminal Law made comprehensive and historic provisions on the crime of foreign exchange evasion. After 2000, my country accelerated its integration into the global economy. In 2008, combined with the fruitful results achieved in the previous reform of the foreign exchange management system, the "the People's Republic of China Foreign Exchange Management Regulations" were revised.

At the same time, the crime of evading foreign exchange, as an administrative and statutory offence, the provisions of the criminal law on the crime of evading foreign exchange also change with the changes in administrative regulations. For example, the aforementioned 1988 Supplementary Provisions were issued after the 1985 Implementing Rules; the 1997 Criminal Law provisions on the crime of foreign exchange evasion were also issued following the promulgation of the 1996 Foreign Exchange Control Regulations, and the expression "unauthorized deposit of foreign exchange abroad" was thus formally provided. However, it is obvious that after the emergence of the "Foreign Exchange Management Regulations" in 2008, the criminal legislation has not been amended accordingly, and the unauthorized deposit of foreign exchange abroad still constitutes the crime of foreign exchange evasion.

3. The basis for the crime of "overseas deposit type" evasion of foreign exchange.

Based on the above historical evolution, it can be clearly seen that after the revision of administrative regulations, the crime of "overseas deposit type" evasion of foreign exchange has become "impossible to follow". Under the premise that the crime of evading foreign exchange is an administrative crime, the path of its crime is imminent.

(I) The establishment of administrative offenses is premised on administrative violations

Administrative offender, as a relative concept to criminal offender, does not violate ethics in nature, but endangers the order of administrative management. Therefore, it is generally believed that the judgment of the illegality of administrative offender depends on the establishment and provisions of administrative regulations. The principle of unity of legal order requires that different parts of the law coordinate with each other and that legal evaluations should not conflict. Administrative regulations do not carry out negative evaluation of the act, the criminal law shall not crack down. Foreign deposit-type foreign exchange evasion is not yet regulated in the field of administrative law, and criminal law should not be criminalized.

(II) The understanding of the provisions of administrative law does not affect the judgment of criminal illegality.

According to Article 9 of the "Foreign Exchange Management Regulations" revised in 2008, "The conditions and time limit for repatriation or deposit abroad shall be stipulated by the foreign exchange management department of the State Council in accordance with the balance of payments status and the needs of foreign exchange management." This provision places certain general restrictions on the conditions for foreign exchange deposits abroad, I .e., foreign exchange deposits abroad must be legitimate under certain administrative conditions.

In addition, the notice of the State Administration of Foreign Exchange on the meaning and application principles of the provisions of Chapter VII of the Regulations on the Administration of Foreign Exchange in the People's Republic of China (Huifa [2008] No. 59) pointed out that "the application of Article 39 of the Regulations" such as foreign exchange evasion "...... To make an administrative penalty decision, it shall be submitted to the State Administration of Foreign Exchange for approval level by level in accordance with the provisions of the" Inspection and Handling Procedures for Handling Cases for Violations of Foreign Exchange Management Violations of Foreign Exchange Regulations. Article 39 of the Regulations "such as foreign exchange evasion" includes the act of depositing foreign exchange abroad without authorization in violation of the regulations ", that is, the act of depositing foreign exchange abroad without authorization has not been completely excluded from the act of foreign exchange evasion in the sense of administrative violations.

上Can the above interpretation of administrative regulations prove that there is an administrative basis for criminalizing the unauthorized deposit of foreign exchange abroad? In my opinion, the understanding of administrative regulations does not affect the judgment of criminal illegality.

The Foreign Exchange Regulations do not include "unauthorized deposit of foreign exchange abroad" in the terms of foreign exchange evasion, which is no longer a typical administrative violation. As for the relevant normative documents that the act belongs to the category of "other acts of evasion of foreign exchange", it is only intended to retain the possibility of administrative violations, but the illegal determination and punishment procedures are very different from other acts that are negatively evaluated in the form of provisions. Even if it is determined that the act constitutes an administrative violation, it must be reported to the State Administration of Foreign Exchange for approval level by level in accordance with the regulations.

As mentioned earlier, administrative regulations and criminal law norms should be unified and coordinated with each other. Administrative law does not adopt an enumerated negative evaluation of unauthorized foreign exchange deposits abroad, and criminal law should not explicitly include them as objective constituent elements. The difference between administrative violation and criminal violation of administrative crime mainly lies in the degree of violation, that is, the amount. When the behavior violates the administrative law and has serious circumstances, it is often recognized as a crime. Criminal law has also become the last line of defense because of its modesty, playing its role when other means of adjustment are powerless. Therefore, the unauthorized deposit of foreign exchange abroad is not explicitly listed as an act of evasion in the field of administrative law, and is sufficient to be adjusted by means of administrative law, and it is obviously inappropriate for the criminal law to continue to criminalize it.

4. Excluding the promotion of the crime of "foreign deposit type" evasion of foreign exchange.

Since the act of depositing foreign exchange abroad has been excluded from the provisions of administrative regulations, it is imperative to adjust the criminal law, and there are many disadvantages in continuing to use the current provisions of the criminal law.

First, it does not meet the inherent requirements of the legal interests of the crime of foreign exchange evasion. The establishment of the crime of evading foreign exchange and other foreign exchange-related crimes has its historical background, and the benefits of its protection also change with the changes of China's economic and social development situation. The purpose of the crime of foreign exchange evasion is mainly to prevent the loss of foreign exchange in China, but with the gradual intensification of China's reform and opening up, foreign exchange management gradually tends to be loose, from the original "heavy management of foreign exchange outflow" adjusted to "balanced management of foreign exchange inflow and outflow". With the change of this trend, the behavior of depositing foreign exchange abroad no longer has the typical administrative illegality. However, the provisions of the criminal law still remain in the "strike hard" state under the background of the financial crisis in 1997, which can not meet the requirements of the current economic development and deviate from the inherent requirements of the legal interests.

Second, it violates the prediction and guidance function of legal norms. There is a misalignment between administrative regulations and the provisions of criminal law, which makes it impossible to issue clear behavioral guidelines to the public, and people will be unable to predict the consequences of related behaviors, thus being at a loss as to what to do. As mentioned in the first part of this article, corporate compliance review faces difficulties and it is difficult to accurately assess legal risks.

Third, the legislation does not have the applicable space. The author inquired about the notification of foreign exchange violation cases regularly published on the official website of the State Administration of Foreign Exchange, and there was no case involving "unauthorized deposit of foreign exchange abroad". Similarly, there is no relevant criminal punishment precedent on the Judgment Document Network and the 12309 website. From the perspective of judicial practice, the crime of "overseas deposit type" evasion of foreign exchange has existed in name only. Criminal legislation should be effective to avoid the criminalization of ineffectiveness. It is true that criminal legislation has the function of crime prevention. There is no crime under the guidance of the legislation, but it cannot be inferred that the function of the legislation has been fully realized. On the contrary, it is a typical "symbolic legislation", lacking a clear legal interest protection function, and does not have the application space in practice.

5. Conclusion

Criminal law is the last line of defense to protect society, and it is also an important standard for the public to form a sense of legality and illegality. Although the act of depositing foreign exchange abroad has not been paid attention to in practice, the provisions of the criminal law are still like a sword hanging over the head of an enterprise. In foreign exchange-related business, enterprises should still pay attention to the compliance of procedures such as deposit and settlement, and strictly follow the procedural provisions of administrative regulations and relevant normative documents to avoid potential criminal risks.

Commentsspan>

 (1) The four types of foreign exchange evasion stipulated in the 1985 Rules for the Implementation of Penalties for Violations of Foreign Exchange Management: first, "domestic institutions privately keep, use and deposit foreign exchange income abroad"; second, "domestic institutions, overseas Chinese enterprises, foreign-funded enterprises and Sino-foreign joint ventures underreport foreign exchange income, or overreport foreign exchange expenditures, and privately keep or deposit hidden foreign exchange abroad"; third, "Chinese investors stationed abroad and Chinese-foreign joint ventures established abroad do not keep the repatriated profits for local operation or other purposes in accordance with state regulations"; fourth, "delegations, working groups and their personnel sent to foreign countries, Hong Kong, Macao and other regions deposit overseas funds or foreign exchange earned from various business activities abroad or transfer them to other purposes"

 (2) The 1996 "Foreign Exchange Management Regulations" stipulate four types of foreign exchange evasion in addition to the provisions: one is "violating national regulations and depositing foreign exchange abroad without authorization"; the other is "not selling foreign exchange to foreign exchange designated banks in accordance with national regulations"; the third is "remitting or carrying foreign exchange out of the country in violation of national regulations"; the fourth is "without the approval of the foreign exchange management agency, carrying or mailing foreign currency deposit certificates or foreign currency securities out of the country without authorization"

 (3) From the official website of the State Administration of Foreign Exchange-Institutional Functions-History: http://www.safe.gov.cn/safe/lsyg/index.html.

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