US revises its sanctions on Myanmar in support of political reform
The US administration has announced wide-ranging revisions to US sanctions on Myanmar, in support of the significant political reforms made in Myanmar and to set out clear guidelines on commercial transactions which are not permitted. Investors may now be better placed to enter the emerging market and explore large-scale investment opportunities with Myanmar entities which have been taken off the list of sanctioned Specially Designated Nationals.
We have published an article on the revisions to the US sanctions in Myanmar and their envisaged impact on foreign investors.
Post-elections update: 100-day plans of ministries
Various Myanmar ministries have started releasing their 100-day plans in response to Daw Aung Sang Suu Kyi’s urging during her March 2016 meeting with certain ministries.
We have summarised the 100-day plans of certain ministries.
Yangon Stock Exchange (YSX) update: Appointment of new chair
The permanent secretary of the Ministry of Finance, U Maung Maung Win, has been appointed the new chair of the Securities and Exchange Commission of Myanmar (SECM), in the wake of the former chair’s resignation several weeks ago. He will also continue in his role as finance ministry permanent secretary. U Maung Maung Win was previously the director general of the finance ministry’s budget department and the deputy governor of the Central Bank of Myanmar.
According to officials, SECM will build capacity over the next five to ten years, with the aim of eventually becoming independent.
YSX’s second listing took place on 20 May 2016, with Myanmar Thilawa SEZ Holdings Limited opening at MMK 50,000 per share.
Formation of foreign exchange committee comprising state and international banks
A new foreign exchange committee has been established for the purposes of developing the interbank market in Myanmar. The committee comprises representatives from three state banks, nine international lenders and 19 local commercial banks, and will bring state, domestic and international banks together for the first time.
It is contemplated that the committee will hold regular meetings to discuss improving the foreign exchange liquidity of the Myanmar market, particularly the US dollar.
According to an official of the Central Bank, the names of the committee members will be publicly announced this month, and a representative from the Central Bank’s Foreign Exchange Management Department will be appointed secretary of the committee.
A previous committee had been set up by local private-sector banks in 2013, but had failed to stimulate the foreign exchange market. However U Mya Than, the chair of the committee, has expressed the hope that the committee will be able to draw on the experience of foreign banks to improve liquidity in Myanmar’s interbank market.
New rules envisaged for government tenders
The Myanmar parliament’s Bill Committee intends to submit and discuss new rules to govern ministry tenders during parliament’s current session. According to U Saw Hla Tun, a member of the committee, the new rules will govern tender practices for the current financial year and will apply to all ministries and government bodies.
The President’s Office had previously issued a directive in 2013, setting out rules for government departments when issuing tenders. However reportedly, these rules have been frequently broken. It is contemplated that these rules will be updated with the assistance of the World Bank. The new rules are expected to promote transparency and standardisation of practices.
Ministry of Commerce to initiate upgrading of one-stop service
The Ministry of Commerce is leading an initiative, with the cooperation of other government departments, to set up an upgraded one-stop service (OSS) for the purposes of facilitating imports and exports in Yangon and at border trading posts.
According to officials, despite the fact that such import-export facilitation teams are already in operation, they do not appear to be facilitating trade as intended, and their membership, working methods and success rates are unclear.
Meetings between the relevant ministries and import-export business to facilitate feedback from entrepreneurs to the government have already commenced. Reportedly, various industry professionals have reacted positively to this initiative, in light of the growing rate of imports and exports via Yangon.