The National Development and Reform Commission of the PRC[1] (“NDRC”) published the Administrative Measures for the Review and Registration of Medium and Long-Term Foreign Debt of Enterprises (企业中长期外债审核登记管理办法) (发改令[2023]56号) on 5 January 2023 (the “Measures”). The Measures came into effect on 10 February 2023, and represent a significant change to the previous regime that governed the registration of foreign debt under Circular on Promoting the Reform of the Filing and Registration System on the Issuance by Enterprises of Foreign Debt (国家发展改革委关于推进企业发行外债备案登记制管理改革的通知(发改外资[2015]2044号)) published by NDRC on 15 September 2015 (“Circular 2044”). The Measures supersede Circular 2044, which is no longer in effect.
The Measures clarify and update a number of areas that were covered by Circular 2044 and expand the scope of coverage. The operation of the Circular 2044 regime was subject to guidance notes that were issued from time to time. The Measures consolidate and formalise much of that material. This briefing will consider a number of the most important criteria and changes and analyse how they may affect loan market practices in relation to transactions coming within the scope of the Measures[2].
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Thank you Asia Pacific Loan Market Association (APLMA) for inviting us to feature in video on the NDRC Order 56 with the Chair of APLMA China Committee, Timothy Lee.
Reference
[1] Any reference to the “PRC” refers to the People's Republic of China, excluding the Hong Kong Special Administrative Region of the People’s Republic of China, the Macau Special Administrative Region of the People’s Republic of China, Taiwan. Any reference to “offshore” means outside of the “PRC”.
[2] Although this briefing mainly considers the impact of the Measures on loan transactions, much of what is said also applies to issuances of debt securities. One important difference is that the Measures provide that in the context of the issuance of debt securities, underwriters will be required to provide a due diligence report in the application. Our understanding is that this does not apply to loan facilities.
