Just Released, Legal Interpretation [2025] No. 2! Effective from 13 February 2025
The Reply of the Supreme People's Court on the Standards for Calculating Interest on Late Payments in Foreign Currencies and in the Currencies of Hong Kong, Macao and Taiwan was adopted by the Trial Committee of the Supreme People's Court at its 1933rd meeting on 25 November 2024, and is hereby promulgated and shall come into force as of 13 February 2025.
Supreme People's Court
12 February 2025
Recently, some Higher People's Courts have submitted requests for instructions on how to determine the relevant interest rates when calculating interest losses on overdue payments in foreign currencies and currencies of Hong Kong, Macao and Taiwan. After study, the reply is as follows:
First，in the case of late payment in foreign currencies, if the parties have agreed on the standard for calculation of interest rate when claiming interest loss for late payment, it shall be dealt with according to the agreement of the parties. However, if the standard of interest rate agreed by the parties exceeds the upper limit of the applicable law, the part exceeding the upper limit shall not be supported.
Second, the parties did not agree on the standard of interest rate calculation or the agreement is unclear, based on the following manner to determine the calculation standard of late payment interest:
(i) For the calculation standard of interest on overdue payment in US dollars, it can be based on the average interest rates of US dollar loans of less than 3 months, 3 (including) to 6 months, 6 (including) to 12 months, 1 year and more than 1 year published in the schedule of the ‘Report on the Implementation of China's Monetary Policy’ which is regularly and publicly released on the official website of the People's Bank of China, and the People's Court shall determine it in accordance with the specific circumstances of the case.
(ii) For the calculation standard of interest on late payment of Euro, Pound Sterling, Japanese Yen, Australian Dollar, Swiss Franc, Canadian Dollar, New Zealand Dollar and Singapore Dollar, reference can be made to the Euro Interbank Offered Rate (EURIBOR), Pound Sterling Overnight Average Interest Rate (SONIA), Tokyo Overnight Average Interest Rate (TONA), and Australian Dollar Bank Bill Rate (BBSW) respectively, Swiss Franc Guaranteed Overnight Rate (SARON), Canadian Dollar Guaranteed Overnight Rate (CORRA), New Zealand Dollar Bank Bill Rate (BKBM), Singapore Dollar Unsecured Overnight Rate (SORA) are determined.
(iii) For other foreign currencies, the standard for calculating interest on late payment can be determined by referring to the base rate of that currency published on the official website of the central bank of the relevant country.
Third，for the calculation standard of interest on late payment in Hong Kong Dollar, Macao Dollar and New Taiwan Dollar, if the parties concerned have agreed on it, reference shall be made to the provisions of Article 1 of this approval. If the parties have not agreed or the agreement is unclear, it may be determined by reference to the Hong Kong Interbank Offered Rate (HIBOR), the Macao Dollar Composite Interest Rate (MOPCR) and the New Taiwan Dollar Base Lending Rate (NTDBLR), respectively.