The Central Bank of Myanmar (CBM) announced in May that boards of directors from nineteen (19) companies were blacklisted for their failure to remit export revenue into foreign exchange bank accounts in Myanmar.
Of 177 companies that remain to do so, 158 companies were prosecuted under Section 42-a of the Foreign Exchange Management Law and the boards of directors were blacklisted on May 10, after sending the notice, revoking their import/export licences and holding discussions several times, according to the statement of the Central Bank.
Since it is important to get the full revenue from exports, the main source of foreign exchange into the country, the laws stipulate that the exporter is required to have the export earnings in foreign currency into his/ her domestic bank account within six months from the date of shipment (within three months from November 10, 2021).
The actions by the CBM has caused some significant disruptions to these IMPEX (Import – Export) companies operations, according to some of these companies bosses MI spoke to. These companies, although they received numerous reminders and warnings from CBM and the government, tried to justify their non compliance though COVID restrictions, banking issues and limited time available for compliance. “My company is not on the list. But what I have heard from some of them (158 companies) is that they current work in progress shipments have gone into major setback, as the government would stop processing for them,” said MD of one IMPEX company.
He also acknowledged that between 2016 and 2018, there have been at least five times, the companies have been invited by UMFCCI and banks, to ask them for deposit of such exports earnings, in addition to the notices and letters from CBM and MOC.
The maximum current punishment for non compliance is one year jail time or fine or both. One businessman, Wei Moe, said the black listing is worse off than the stated penalties. He said, “With fines, the company can still continue its operations. But blacklisting stops all the current operations.”
According to sources close to the CBM, the 158 companies are just the beginning. More actions would be forthcoming, if the infringements are not sufficiently addressed by the IMPEX companies. CBM role in this has now been transferred to FESC (Foreign Exchange Supervisory Committee) tasked with stabilising the exchange rates and supervising the use and flow of foreign exchange.
