13 October 2021
On 3 October 2021, the Central Bank of Myanmar (“CBM”) issued Notification No. 35/2021 (“Notification”) repealing Notification No. 33/2021 relating to the conversion of export proceeds into Myanmar Kyats, and stipulating that export proceeds must now be utilised or divested within 30 days. Notification 33 had given a time frame of four months to convert export proceeds. To read more about Notification 33, please see our article titled “Central Bank of Myanmar stipulates unused export income in foreign currency to be sold within four months of receipt”.
The CBM reminds exporters of their obligation under sections 38(b) and 42(a) of the Foreign Exchange Management Law (“FEML”) and paragraph 35 of the Foreign Exchange Management Regulations to remit their export earnings into bank accounts in Myanmar within six months of the date of exportation.
The Notification came into effect on the date of issuance and prescribes the utilisation of export earnings as set out below:
- Exporters can utilise their export earnings themselves, sell them on to either banks without an authorised foreign exchange dealer licence (“AD”) (“non-AD banks”) or authorised foreign exchange dealer banks (“AD banks”) within 30 days of receipt of the earnings in their bank accounts (“time frame”);
- Exchange the remaining balance of export earnings not utilised or exchanged to Myanmar Kyats within the time frame at AD banks;
- Non-AD banks who purchase export earnings must utilise or exchange the export earnings into Myanmar Kyats within 30 days of purchase; and
- Non-AD banks who do not utilise or exchange purchased export earnings must sell the export earnings only to AD banks within 30 days of purchase.
Amendment to FEML
On 6 October 2021, the State Administration Council announced the amendment of the FEML to replace section 41 which provided that “no license holder shall violate the rules, regulations, orders and notifications under this law”. The new section 41 removes the reference to licence holders and instead stipulates that “no one shall violate any provisions prescribed under the rules, regulations, notifications, orders, directives and procedures issued under [the FEML] relating to foreign exchange management”. The penalty for violation of section 41 remains imprisonment for a term not exceeding one year or a fine, or both.