Welcome to the July 2023 edition of our newsletter. In this edition:
Legal/regulatory developments
New CBM online forex trading process. The Central Bank of Myanmar announced requirements for notification of the details of planned foreign currency transactions for assessment under a new CBM process and settlement via a new online trading platform established by the CBM.
Sanctions imposed on MFTB, MICB and MoD. The US government imposed economic sanctions on the Ministry of Defence, Myanmar Foreign Trade Bank and Myanma Investment and Commercial Bank.
New automatic import licensing scheme already significantly reduced. After just three weeks of operation of a new automatic import licensing system – whereby all goods require an import licence, but a long list of specified goods would automatically be granted licences – the Ministry of Commerce reduced the list of automatically licensed goods by half.
Compulsory bank transfers for China border trade payments. The Ministry of Commerce has required that all payments for China-Myanmar border trade transactions must be undertaken via bank transfer from 1 August onwards. The same restrictions have been in place for border trade via the Thai border since 1 November 2022.
MoC reduces importer security deposit requirements. Border trade exporters no longer need to provide 100% of total export value as a form of advance security deposit in order to obtain an export permit. This prohibitive restriction has been in place in relation to some major export categories for the past 12 months to try to limit fraud and transfer pricing in relation to border trade exports.
FATF six-monthly statement. On 23 June, the Financial Action Taskforce (FATF) released a new six-monthly statement on “High-Risk Jurisdictions subject to a Call for Action”, that is, black-listed jurisdictions.
IRD Interpretation Statement on housing allowances. On 28 June, the Internal Revenue Department released Interpretation Statement 1/2023 regarding personal income tax liability for housing allowances, which confirms that if a cash allowance is paid to the employee for housing, this will be treated as taxable salary.
Online sales declared an “essential service”. On 4 July, the Union Government declared “online sales” to be an essential service under the authority of the Ministry of Commerce (MoC) pursuant to section 4(c) Essential Supplies and Services Law 2012. The effect of this declaration is to give the MoC authority “to issue prohibiting orders, regulating orders, and supervision orders” regarding online sales.
CBM reduces compulsory export income conversion to 50%. On 13 July, the Central Bank of Myanmar (CBM) released Notification 15/2023 which reduces the percentage of export earnings that exporters are required to immediately convert into MMK (at CBM rates) from the previous level of 65% to 50%.
IRD new audit forms. The Internal Revenue Department (IRD) has apparently released a raft of new forms relating to IRD audits as Ministry of Planning and Finance (MoPF) Notification 107/2023, dated 11 July 2023.
Revised export requirements for gold items. The Ministry of Commerce released Export/Import Newsletter 12/2023 on 3 July revising the requirements for the export of jewelry, artistic items and other valuable items made from gold.
Procedures to seek the assistance of Customs for trade mark protection. On 14 July the Ministry of Planning and Finance (MoPF) issued Notification 50/2023 containing new “Customs regulations relating to the protection of trade mark rights”.
EU expands its Myanmar sanctions list. On 20 July, the European Union announced another round of Myanmar sanctions, pursuant to which it added six individuals and one State-owned corporation to the list of Myanmar persons/entities subject to EU economic sanctions.
MoNREC cracking down on gem trading licence renewals. Myanma Gems Enterprise (MGE) has announced that licences for gem trading and for making gemstone products (which are administered by MGE) will be revoked unless they are validly renewed.
Investment news
World Bank Economic Monitor for June 2023. The World Bank released the latest instalment of its six-monthly Myanmar Economic Monitor on 27 June. Unsurprisingly, the conclusions look to be not overly positive.
Pact Global Microfinance Fund closes its doors. Pact Global Microfinance Fund (PGMF), the microfinance arm of INGO Pact Myanmar, has announced that it is closing its operations. PGMF is the largest microfinance provider in Myanmar.
Planning for introduction of warehouse receipt financing. The Ministry of Commerce and the Myanmar Rice Federation recently are planning for the implementation of warehouse receipt financing in Myanmar for the agricultural sector, including in respect of government-funded loans.
Potential fertilizer factory investment. The Ministry for Cooperatives and Rural Development and domestic fertilizer industry representatives met with a delegation led by a representative of Russian State-owned investment fund Roscongress Fund to discuss plans for cooperation in building fertilizer factories in Naypyitaw, Yangon, Ayeyawady and Magway.
MAI bank accounts closed. United Overseas Bank in Singapore informed Myanmar Airways International in late June that it will be closing all of MAI’s accounts on 15 August.
ETC sells out of Golden City. Following a long-running campaign of persecution by the shadowy and secretive ‘Justice For Myanmar’, SGX-listed Emerging Towns & Cities has sold its interest in the Golden City mixed use real estate project in Myanmar.
India and Myanmar discuss cross-border power transmission. During a meeting on 10 July between Myanmar’s Minister of Foreign Affairs and the Indian Ambassador the prospect of cross-border electricity supply from India to Myanmar was discussed.
CBM promotes its digital payment credentials. The Central Bank of Myanmar (CBM) released an announcement on 15 July stating that it will accelerate the adoption of digital payment systems in Myanmar.
India provides an update on IMT Trilateral Highway. Indian Minister of External Affairs, S. Jaishankar, was reported as stating during a meeting in Thailand on 15 July that “[the trilateral highway] has been a very difficult project mainly because of the situation in Myanmar. And one of our priorities today is to find ways of how to resume this project…”.
MMK50 billion allocated for edible oil loans. Myanmar Agricultural Development Bank has received MMK50 billion in funds allocated from the Union Government’s National Economic Development Fund for low interest rate (5%) loans for the upgrading and development of edible oil processing facilities.
MIC-approved investments tick upwards in July. The Myanmar Investment Commission has announced that it approved ten investment proposals, with a combined investment value of US$446.58 million and K254,951.442 million, in its recent meeting on 24 July.
F&N doubles down on the Myanmar beer market. Singapore-listed Fraser & Neave Limited announced on 20 July that it is moving towards completion of conditions for establishment of a new beer brewery in Myanmar in joint venture with Myanmar conglomerate Win Brothers Group.
YRIC approves hotel investment in Yangon. The Yangon Region Investment Committee (YRIC) is talking up the approval of a new Myanmar citizen investment project in the hotel sector during its recent meeting on 26 July.
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