Requirement for Advance Payment on Export Earnings Revoked, Deposits now Required

The Department of Trade under the Ministry of Commerce (“MOC”) announced via Bulletin 11/2023 dated 28 June 2023 (“Bulletin 11”) and subsequent Bulletin 13/2023 dated 6 July 2023 (“Bulletin 13”) that starting from 1 July 2023, exporters exporting pulses, corn, sesame, and peanuts no longer have to make advance payments on their export earnings.

Previously, they were required to make advance payments through the Advanced Telegraphic Transfer system according to the Foreign Exchange Supervisory Committee (“FESC”) meeting resolution 32/2022.

Bulletin 11

Bulletin 11 replaced the advance payment requirement under the FESC resolution with the requirement to make a deposit instead. The main points are as follows:

• Deposit amount:
  • Companies that have been established for three years and above – 20% of the total export value
  • Companies that have been established for fewer than three years – 35% of the total export value.
• Deposits must be paid to the Department of Trade in US dollars, Yuan, Baht, or Myanmar Kyat calculated using the border market rate.
• Exporters must make sure that the export earnings are deposited into the company’s bank account within seven days after making an export declaration. If they fail to do so, the deposit will be forfeited and the exporter’s export license will be revoked. If they are deposited within the required period, the deposit will be returned back to the exporter.

Bulletin 13

On 6 July 2023, the MOC issued Bulletin 13 to amend a few points of Bulletin 11, including:

• The deadline for the export earnings to be deposited into the company’s bank account was extended to 15 days from the original seven.
• Deposits can no longer be made in foreign currencies; only Myanmar Kyat calculated at the border market rate will now be accepted.

Note that there is some information that is not addressed in either bulletin, specifically:

• How, and how quickly, deposits will be returned back to exporters.
• What exactly the “border” market rate is and how it is determined.

Given that this is a recent change, we expect further clarification to be forthcoming and will provide updates on these developments as we receive them.