THE Central Bank of Myanmar (CBM) announced compliance guidelines to exporters regarding export proceeds on 22 August.
As per the CBM’s statement, some companies lack up-to-date information related to exports. Some companies heavily rely on third-party agents or their staff, resulting in unauthorized exports under their company name. Despite the remittance of export proceeds into the company’s bank account, there is a procedural gap in bank documentation, leading to errors and misstated financial reports. Lack of consistency in bank reconciliation for export proceeds occurs, causing the company to be listed among companies failing to repatriate export proceeds in the prescribed timeline. Consequently, the director and the BOD have to face actions and get blacklisted. As a result of this, exporters are informed compliance with the repatriation of export proceeds.
Exporters need to obtain a licence through Trade Net 2.0 of the Ministry of Commerce before signing a sales contract with foreign buyers. The Department of Customs will issue an Export Declaration (ED) only after verifying export licence validity and the values of goods shipped as per the sales contract. Myanma Port Authority will issue a Bill of Lading (B/L) after receiving ED and screening the necessary documents.
Export earnings must be deposited into the domestic bank accounts within 30 days for the goods to be exported to Asian countries and within 60 days for other countries outside Asia starting from date of ED number of the Customs Department, under the Section 35 of the Foreign Exchange Management Law, according to Notification 27/2023 of the Central Bank of Myanmar.
Those exporters who fail to comply with compulsory repatriation rules will face actions (a sentence of less than one year and/or fines) under Section 42 of the Foreign Exchange Management Law.
CBM’s Foreign Exchange Management System (FEMS) will cross-check ED records from the Customs Department’s Myanmar Automated Cargo Clearance System (MACCS).
CBM will report overdue receivables to the authorized dealers (private banks) upon findings of FEMS. The authorized dealers must deal with exporters by setting deadlines and inform the Commerce Ministry and export repatriation institutions to process the temporary revocation of the export-import licence due to non-compliance.
Action Task Force must contact and urge companies in Yangon, Nay Pyi Taw and Mandalay to repatriate export earnings in the set period. Those companies that fail to meet with the action task force and those that fail to complete bank reconciliation will lead to the temporary suspension of the export/import licence of the Ministry of Commerce. The list of those companies will be forwarded to the Ministry of Home Affairs as well.
Repatriation will be waived for goods rejected due to inferior quality and incorrect shipment. Companies can ask for CBM to be removed from the list for cargoes damaged by submitting other necessary documents.
Blacklisting companies and directors lead to banking restrictions, travel bans, loss of government contracts, legal prosecution and loss of public trust and company staff.
Those companies that want to delist need to clear all export proceeds and submit a bank recommendation of settled balances to the CBM.
Furthermore, the CBM will verify the export proceeds balance, identify whether directors listed in the company registration with the Directorate of Investment and Company Administration are serving multiple companies or not, and check whether they pay court-imposed fines for prosecuted companies. Upon resolution of export repatriation, the CBM will continue to notify the Ministry of Home Affairs and the departments concerned to remove them from the blacklist.
Prosecution against those companies with overdue receivables will be undertaken only after progressive steps; the respective banks contact them to clarify the overdue receivables, the action task force encourages them to repatriate during a set period and blacklisting.
Afterwards, exporters must notify the banks of the ED number for receipt of export proceeds, along with the sales contract, invoice and B/L. This way, banks can specify them accordingly. Companies having unmatched export proceeds will remain listed as overdue. In order to avoid this, documentary consistency is mandatory. Companies can request the CBM to correct discrepancies in ED and the contract.
The Customs Department’s MACCS will share ED records with the respective banks. The Bank Name Change process can be carried out in one working day if the bank’s filled-in ED differs from the company’s preferred bank.
Thus, exporters must immediately contact the banks for the receipt of export repatriation to avoid unprecedented blacklisting. They are to strictly adhere to export/import rules and regulations and forex repatriation rules for exports within a set time frame. — NN/KK
