The Central Bank of Myanmar (“CBM”) has issued new rules on Export Proceeds Requirements for Exporters (“Notification”). These rules impose strict obligations on exporters to repatriate foreign currency earnings, reconcile proceeds with banks, and comply with documentary requirements. Non-compliance can result in blacklisting both companies and their directors, with severe legal and commercial consequences.

Key Requirements

1. Export licensing and shipment

Exporters must obtain export licenses through the Ministry of Commerce’s TradeNet 2.0 system, sign sales contracts with foreign buyers, and secure an Export Declaration (“ED”) from Customs before shipment. The Myanmar Port Authority issues a Bill of Lading (“B/L”) during loading.

2. Repatriation of proceeds

The Notification states that the exporters must repatriate foreign currency proceeds within 30 days for exports to ASEAN countries and 60 days for exports to non-ASEAN countries. Failure to comply with this may lead to prosecution under the Foreign Exchange Management Law (“FEML”), punishable by imprisonment of up to one year, fines, or both.

Please see our ‘Banking Compendium’ discussing the CBM laws and regulations on this aspect in 2023-24 here.

3. Bank reconciliation

Exporters must immediately reconcile export proceeds with their Authorized Dealer Banks (“AD Banks”), confirming which ED the proceeds correspond to and providing full supporting documents (ED, sales contract, invoice, B/L).

The Notification states that if the documentation is incomplete or inconsistent, the proceeds will remain on CBM’s outstanding list.

4. Monitoring and enforcement

The CBM will monitor compliance through its Foreign Exchange Management System (FEMS), which will cross-check Customs data with bank reports. AD Banks will notify exporters regarding outstanding proceeds and set deadlines for reconciliation.

If exporters fail to act, the CBM will escalate the matter to the Ministry of Commerce, which may suspend import-export licenses. Action Task Forces may also contact exporters directly in Yangon, Naypyidaw, and Mandalay to facilitate repayment. Continued non-compliance will result in blacklisting.

5. Blacklisting and consequences

The Notification states that companies that fail to repatriate or reconcile proceeds face blacklisting. Additionally, the directors of the company may also be blacklisted.

Among other things, blacklisting restricts banking and financial services, suspends licenses, prevents directors from entering or leaving Myanmar, and causes reputational and investor confidence losses.

6. Removal from blacklist

To lift blacklisting, exporters must repatriate all outstanding proceeds, complete reconciliation, and apply to the CBM with bank confirmation. CBM would then instruct DICA to cross-check the directors’ involvement in other companies and verify that no related company holds outstanding export obligations before recommending removal.

7. Special circumstances

If exporters cannot repatriate proceeds due to deterioration of the goods, damage, defects, or re-export requirements, they must submit timely supporting documents to the CBM. The CBM may approve cancellation of such obligations after examination.

8. Other compliance obligations

The Notification additionally states the following:

(i) Exporters must ensure that the ED specifies the correct bank.
(ii) If the receiving bank differs, exporters must complete a bank name change process, which the CBM processes within one working day.
(iii) Exporters must request formal amendments through their banks if discrepancies exist between ED data and received proceeds.

What Exporters Must Do to Comply

1. Repatriate proceeds on time: Deposit foreign currency proceeds within 30/60 days of export.
2. Reconcile immediately: Match funds to the correct ED with complete supporting documentation.
3. Verify ED details: Ensure EDs specify the correct bank; request amendments or bank name changes promptly.
4. Maintain complete records: Keep accurate contracts, invoices, Bills of Lading, and EDs for all transactions.
5. Act quickly on discrepancies: Submit amendment requests through banks if mismatches occur.
6. Engage with banks proactively: Respond promptly to AD bank notifications and deadlines.
7. Use exception procedures when necessary: Submit documentation for damaged, defective, or re-exported goods without delay.

Conclusion

The CBM seems to have adopted a zero-tolerance approach to export proceeds compliance applicable to companies and their related entities. This stems from the fact, and as indicated in the Notification, that, some exporters do not stay updated on regulatory requirements and instead delegate the entire export process to agents or employees. In some cases, such agents or employees use the company’s name while another business actually carries out the exports. Even when export proceeds are received by the bank, exporters often fail to complete the required reconciliation on time, which places both the company and its directors at risk of being blacklisted.

In line with the requirements under the Notification, exporters must establish internal systems to monitor export payments, reconcile promptly with banks, and maintain accurate records.

Failure to comply triggers escalating enforcement measures, including blacklisting and prosecution. Additionally, companies and directors must treat these requirements as a compliance priority to safeguard their operations and reputations.

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

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