On October 31, 2022, the Department of Trade in Myanmar’s Ministry of Commerce announced that payments for importation at the border are to be made via bank transaction.
This announcement comes into force with Import/Export Newsletter No. 10/2022, dated October 31, 2022, issued by the Department of Trade, with the purpose of implementing a systematic payment system for import and export at the border, in accordance with a suggestion made by the Financial Action Task Force (FATF), an international financial watchdog. (This follows the recent news that the FATF has blacklisted Myanmar.)
This requirement means that only bank transactions will be accepted for import payments in the border trade. Initially, this system will be applied to trade at the Myanmar-Thailand border only.
The new requirement to pay for imports only via bank transaction states that export earnings and other types of foreign currency earnings (including salary and income remitted by Myanmar workers overseas) will be allowed to be used for imports. Importers are required to make the payments for import goods—using these earnings—via their banks. That is, Importers operating in the border trade must have foreign currency earnings received through official banking channels and must make import payments abroad through official banking channels using those earnings. In contrast to previous practices, they are unable to use other sources of income and are not able to make other payment arrangements that do not involve bank transactions.
The procedures for importation at the Myanmar-Thailand border are as follows:
- Companies applying to the Department of Trade for an import license must produce credit advice and original bank statements that prove the receipt of export earnings or other earnings into their bank account.
- The Department of Trade will scrutinize the reported export earnings or other earnings, and approve the import license for an amount not exceeding the bank balance.
- For items that do not require import licenses, importers must, when filing an import declaration, include the necessary information for the Customs Department by attaching the credit advice and original bank statement showing receipt of export earnings or other earnings into their account.
These procedures are in effect from November 1, 2022. Payments under import licenses that had already been applied for prior to this are excluded from the new requirements. However, for import licenses that had already been approved before that date, importation must be concluded by November 30, 2022. If importation is not complete by then, the import license will be nullified.
In addition, only export earnings and other earnings arriving after April 1, 2022, will be eligible for consideration under these procedures. Exporters that earn export earnings from Myanmar-Thailand border trade can use the earnings to import goods themselves (across any border) or transfer earnings to other companies to import.
For more details on these developments, foreign exchange guidelines, or any aspect of banking regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].