The State Council’s regulations plug illegal pathways pretty firmly, with penalties in place for both companies and individuals. If you’re doing ODI, it’s advised to compare and self-check line by line—don’t wait until the operation is called to a halt before you realize.

Article 27 of the “Regulations on Outbound Investment” issued by the State Council provides that: those who fail to complete the overseas investment record-filing procedures as required, or who apply for record-filing using false materials, shall be ordered to make corrections, have their illegal proceeds confiscated, and be fined 1‰–5‰ of the investment amount; if they refuse to make corrections, their investment activities shall be stopped, they shall be given a deadline to dispose of their shares/assets, and the fine shall be increased to 5‰–10‰; the persons directly in charge and other persons directly responsible shall be fined RMB 20,000–50,000. Those who obtain record-filing by bribery, deception, or other improper means shall have the record-filing revoked, have their illegal proceeds confiscated, and be fined 1‰–5‰; investors who have already invested shall have their investment activities stopped and be given a deadline to dispose of their shares/assets, with a fine of 5‰–10‰, and the relevant persons responsible shall be fined RMB 20,000–50,000.