On 3 April 2022, the Central Bank of Myanmar (“CBM”) issued Notification No. 12/2022, instructing all banks holding Authorised Dealer Licenses (“AD Banks”) to convert foreign currency into Myanmar Kyats (“Notification 12/2022”). Further requirements under Notification 12/2022 was released with the issuance of letters on 20 April 2022 and 16 June 2022. Details can be found in our previous Client Alerts issued here and here.
Additionally, CBM has issued Letter No. FE – 1/643 on 29 June 2022 stating that the following are exempted from Notification No. 12/2022:
- foreign currencies of Woori Bank Representative Office in the foreign currency bank account opened at Myanmar Foreign Trade Bank;
- foreign currencies in the relevant foreign currency bank account of the Special Economic Zone Management Committees and its subsidiaries such as Thilawa Special Economic Zone Management Committee Company Limited, Kyaukphyu Special Economic Zone Project Development Company Limited, Kyaukphyu Special Economic Zone Deep Sea Port Company Limited and Dawei Special Economic Zone Management Committee Company Limited;
- Export-Import Bank of India;
- China National Oil Corporation – CNUOC (Myanmar Branch); and
- Panjab National Bank Yangon Representative Office.
It is important to note that although they are exempted from automatic conversion of the foreign currency from foreign bank account, any transfer of money out of the Union will still be subjected to the prior approval of the Foreign Exchange Supervisory Committee (“FESC”), based on CBM Letter FE-1/696 issued on 6 July 2022 (“Letter”). According to the Letter, CBM has instructed AD Banks on entities exempted from Notification 12/2022. Nonetheless, CBM clarified that when conducting off shore transfers, exempted entities are still required to seek prior approval from FESC on whether they have sufficient foreign currency in their foreign bank accounts.
AD Banks must ensure documentation is provided to show that its customers fall under the exemptions. It is believed that the application process for FESC approval may be relatively fast as it is important for the exempted entities to meet their payment obligations and for the convenience of business operations.
We will continue to monitor and update any further developments from CBM.
For further information, please contact:
Geraldine Oh, Partner, Zico law
gearldine.oh@zicolaw.com
