On April 4, 2022, Myanmar’s State Administration Council (SAC) established the Foreign Exchange Supervisory Committee (FESC) to approve foreign currency conversion, make exemptions to foreign exchange restrictions, and permit overseas foreign currency transfers. The formation of the FESC was made official with the May 13, 2022, publication of the SAC’s Order 28/2022 in the Government Gazette, which appointed six individuals to the new committee.
The FESC is the focal body tasked with implementing Myanmar’s recently adopted policy of requiring conversion of foreign currency transfers and balances to local currency. Since the policy was instituted in April 2022, the Central Bank of Myanmar issued further clarifications and instructions for banks authorized to handle foreign currency, responded to concerns from foreign investors by exempting certain foreign investment projects from the conversion requirement, and relaxed the currency conversion requirements for trade at the Chinese and Thai borders.
The FESC supervises the flow of foreign currencies for domestic and foreign investment, manufacturing, exports and imports, and service businesses (including education- and health-related initiatives). The FESC is specifically responsible for considering and approving the use of foreign currency for the following:
- Importation of machinery, vehicles, equipment, and raw materials needed for the foreign investment and manufacturing;
- Importation of fuels, medicines, cooking oils, fertilizers, insecticides, and construction materials that are not available in the domestic market;
- Myanmar citizens’ social matters, such as going abroad for purposes of medical treatment, education, or religious activities;
- Importation of general goods, repayment of loan and interest payments to lenders in foreign countries, service payments, and repatriation of profits from investments; and
- Imports of various luxury products (e.g., brand-name goods, jewelry, sport cars, watches, etc.).
The FESC will also perform other duties relating to foreign exchange management as assigned by the SAC.
For more details on these foreign exchange developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].
