International Legal Regulation Of Foreign Exchange Control System

With all countries participate in more and more international economicactivities, one unavoidable trend is to unfasten foreign exchange control measures.Every country has it's own sovereign to administer currency, execute monetarypolicy including enforce it's foreign exchange control measures. In theconsideration of it's economic development and safety, every sovereignty choosethe mode and degree of it's foreign exchange control, decide the schedule ofopening it's current account and capital account. To some degree, someinternational economic organizations regulate their member countries' foreignexchange control measures. It is necessary for these countries to take theinternational legal obligations they have into consideration, when they decide theirforeign exchange control measures.The classification of current account and capital account by InternationalMonetary Fund is now the standard accepted by all countries. ArticleⅧof theAgreement of the International Monetary Fund requires the member countries'current account should be convertible, at the same time, it stipulates twoexceptions. Although articleⅥof the Agreement of the International MonetaryFund request the member countries to strengthen regulations on capital account,the IMF has been working hard on eliminating regulations on capital account, themost typical example is the practice of the loan on structural adjustment.The economic aim of one country to keep the balance of payments hasconflict with the goal of WTO to "enlarge the production and the trade of goodsand service", members often use the foreign exchange control measures toinfluence the balance of trade, at the same time, the liberalization of trade inservices require convertibility of some capital account, so WTO also hasrequestions on members' foreign exchange control measures which is embodied inGATT, TRIMs and GATS. The legal documents of WTO also have someexceptions on the item of foreign exchange control measures.These international law on foreign exchange control have profoundenlightment to us. In 1994, China unified the exchange rate, in 1996, assuemed thelegal obligation of theⅧarticle of the Agreement of the International Monetary Fund, and in 1997, amended the Foreign Exchange Management Regulations,cancelled the exchange restrictions on current account. To materialize the promisewe make in the schedules of committments, China successively promulgateForeign Capital Insurance Agent Management Regulations, Foreign CapitalBank Management Regulations. The State Administration of Foreign Exchangeissues some new regulations and measures. But to our regret, these decrees havemuch shortcomings. Comparied with articleⅧof the Agreement of theInternational Monetary Fund, the foreign exchange control measures of China ineffective contain some disparity; the authenticity censor to transaction constitutesrestrictive measures to trade in services; to foreign capital financial institutionswhich has obtained market-access, China has not completely fulfill NationalTreatment. Chinese service industry is not developed in whole and has an adversebalance of trade for years, when we actively fulfill the promise we make, we mayuse the exemption rules of IMF and WTO to protect our service industry, in whichthe prudence exemption rule stipulated in Annex of Financial Service is of moreimportance. Although the prudence measures is enforced as the member countries'domestic rule, based on GATS and the Annex of GATS, we can deduce somecriterion of it.