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New Foreign Currency Conversion Requirements and Exemptions in Myanmar

Byadmin2

May 6, 2022
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On 3 rd April 2022, the Reserve Bank of Myanmar (“ CBM“) provided the Alert 12/2022 (“ Alert“) and the Regulation No. 4/2022 (“ Directive 4“) on foreign currency conversion. They entered into force on and from 3 rd April 2022.

On 5 th April 2022, the CBM provided the Regulation No. 6/2022 (“ Regulation 6“) to recommend the treatments for remittance of foreign currency into Myanmar, conversion and transfer/repatriation of foreign currency abroad.

The significant requirements under the Alert and the Regulation 4 and the Regulation 6 are summed up listed below.

Alert Requirements

  • Any Myanmar resident getting a foreign currency from abroad should remit the foreign currency into Myanmar by a transfer of funds into a foreign currency account opened with a bank holding an authorized dealership license (“ Advertisement Bank“) in Myanmar, and have the funds transformed into Myanmar Kyat (“ MMK“) within one working day. Foreign currencies remitted into Myanmar prior to 3 rd April 2022 are likewise based on this brand-new foreign currency conversion requirement.
  • Repatriation of any foreign currency abroad need to be made through an advertisement Bank with authorization of the Forex Supervisory Committee (“ FESC“).
  • Noncompliance with the Alert can be based on the legal actions recommended under the Forex Management Law 2012.

Directives Requirements

  • Each of the advertisement Banks is needed to adhere to the foreign currency conversion requirements and application procedures and policies.
  • The currency exchange rate for transforming USD recommended by the CBM is MMK1,850 per USD. Other foreign currencies will be computed based upon the currency exchange rate of MMK1,850 per USD.
  • Efficient from 4 th April 2022, any foreign currency gotten in money from abroad from trading and non-trading activities (such as export of products, arrangement of services, mutual fund exempt to the exemption authorized by the FESC) and transferred into a checking account opened with the advertisement Bank need to be transformed into MMK at the currency exchange rate recommended by the CBM within one working day from the getting date.
  • Prior to accepting and crediting each fund transfer got into an appropriate checking account as an overseas loan, mutual fund, or a unilateral fund transfer, the pertinent advertisement Bank need to confirm whether the fund has actually been given approval from the CBM.
  • The local of Myanmar need to acquire approval from the FESC prior to he can move funds in a foreign currency abroad for payment of imported products, services, paid dividends, capital expense payment, payment of loans, and so on
  • The advertisement Banks can charge banking service charge for each fund transfer at MMK3 per USD.

Exemptions

On 20 th April 2022, the CBM provided the Letter No. FE 1/69 to excuse some activities and individuals from the requirements for transferring funds in foreign currencies gotten from abroad with the advertisement Banks and transforming them into MMK under the Alert as follows:

  • Foreign direct financial investment activities under the Myanmar Financial Investment Commission (“ MIC“) authorization
  • Organization financial investment run in the Unique Economic Zones (“ SEZ“)
  • Foreign diplomats and their relative of the embassies found in Myanmar
  • Foreign employee of the diplomatic entities serving at the very same rank as diplomats of foreign embassies
  • Team member of the United Nations Company (“ UN“) and its companies, and Myanmar nationals holding a UN personnel (laissez-passer) passport
  • Foreign employee of foreign advancement companies helping Myanmar
  • Foreign employee operating at a diplomatic-rank at global companies such as ICRC, ILO, and INGOs and advancement companies such as TICA, JICA
  • International airline companies owned by the State and the Myanmar people.

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