Foreign Exchange Management Regulations (2014)

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FEM Regulations Website (Final Version) (29-9-2014)-5 Myan.doc Republic of the Union of Myanmar, Central Bank of Myanmar Notification. No. 7/2014 Date: 1376 ME, Tawtin Kaut month, 7th day (29 September 2014)

Under Section 49(a) of the Foreign Exchange Management Law (2012), Notification No. 12, the Central Bank of Myanmar has granted certain exemptions to Authorized Foreign Exchange Dealers. These dealers may conduct foreign exchange transactions on behalf of their clients and for their own accounts, subject to the conditions specified herein.

Chapter 1: Name and Definitions (Clauses 1–2)

1. These regulations shall be known as the Foreign Exchange Management Rules Regulations (2014).
2. Terms used herein shall carry the meanings assigned in the Foreign Exchange Management Law (2012). Additionally, the following terms shall have the specified meanings: (a) "Authorized Transactions" refers to foreign exchange transactions permitted by CBM or under these regulations. (b) "Documentary Evidence" refers to the documents and records collected from Authorized Foreign Exchange Dealers or their clients, required for verifying authorized transactions.

Chapter 2: Duties and Responsibilities of Authorized Foreign Exchange Dealers (Clauses 3–9) 3. When verifying documentary evidence, dealers must ensure transactions are genuine foreign exchange purchases/sales or remittances, conducted through the online system. They must collect and verify documents for authorized transactions, including: (a) Verification of transaction types, grades, and nature. (b) Evidence that domestic residents are purchasing foreign currency from or selling to non-residents for legitimate purposes, and that the counterparties are genuine. (c) Evidence of transaction amounts and accounting periods for domestic-to-foreign or foreign-to-domestic remittances. (d) Records of parties involved in advance/deferred payments. 4. If a formal agreement exists between domestic and foreign parties, dealers must obtain additional documentary evidence as specified in Clause 3(a)–(d), including: (a) Original signed agreement. (b) Supporting documents verified under recognized accounting, customs, or legal standards. (c) Confirmations, invoices, contracts, shipping documents, insurance policies, licenses, permits, and exchange documents. (d) Minimum required supporting documents to verify the authenticity of transactions under Clause 3(a)–(c). 5. If no formal agreement exists, dealers must strictly follow Clause 3(a)–(d) and ensure additional supporting documents meet the requirements of Clause 4(b). 6. If original documents are unavailable, dealers may accept copies, electronic records, or third-party confirmations. 7. Dealers must report to CBM any transactions with suspicious purposes or natures for review and approval. 8. Dealers must: (a) Clearly state “Foreign Exchange Transaction Completed” on submitted documents, signed by clients; (b) Retain records for at least five years for CBM inspection; (c) Verify that transactions are ordinary trade or foreign exchange reserve accounts. 9. Dealers must maintain foreign currency balances with CBM according to prescribed ratios, considering transaction types and amounts.

Chapter 3: Domestic Bank Accounts (Clauses 10–15) 10. Dealers may open domestic foreign currency accounts for residents, subject to: (a) Depositing only legally obtained or authorized foreign exchange; (b) Converting domestic currency to foreign exchange for domestic payments or authorized transactions. 11. Residents must obtain CBM approval to open foreign currency accounts abroad, per Section 14 of the Law. 12. Account holders must submit monthly statements to CBM. 13. Dealers may open foreign bank accounts and must report balances and transactions to CBM within prescribed periods. 14. Dealers may lend foreign currency to residents, subject to CBM guidelines, accounting standards, and authorized loan types. 15. Residents may hold up to USD 10,000 (or equivalent) in foreign currency for one year from receipt, subject to exchange or deposit.

Chapter 4: Foreign Bank Accounts (Clauses 16–18) 16. Dealers may open foreign currency accounts abroad without prior CBM approval for: (a) Legally imported foreign exchange; (b) Foreign exchange obtained from converting domestic currency under authorized transactions. 17. Accounts may be used for: (a) Transferring funds to other foreign accounts or making payments; (b) Converting received foreign exchange into domestic currency. 18. Dealers may open domestic currency accounts abroad using proceeds from authorized transactions, allowing foreign residents to transfer funds domestically or internationally.

Chapter 5: Ordinary Trade Transactions (Clauses 19–34) 19. Dealers may process ordinary trade transactions upon submitting: (a) Commercial invoices; (b) Customs declarations or clearance documents; (c) Other required evidence. 20. Dealers may use recognized international payment systems for foreign exchange transactions. 21. Dealers may process advance payments, including customs guarantees and bank loans, per CBM guidelines. 22. Dealers may process advance payments for goods/services after verifying compliance with regulations. 23. Advance payments require: (a) Specific goods/services; (b) Compliance with trade accounting standards; (c) Confirmation via advance payment; (d) Eligibility for tax exemptions. 24. Dealers must submit authorized advance payment lists to CBM and Customs monthly. 25. If evidence is delayed, dealers must report to CBM for approval. 26. Dealers may process foreign exchange transactions related to patents, trademarks, licenses, and intellectual property rights upon registration. 27. Dealers may process foreign exchange for overseas travel, business trips, education, exhibitions, family maintenance, and living expenses up to USD 10,000 (or equivalent), subject to verification of identity and purpose. 28. Companies may process foreign exchange for trade exhibitions upon submitting verified evidence. 29. For amounts exceeding USD 10,000 (or equivalent), dealers must report to CBM. 30. CBM reviews and approves reports based on documentary evidence. 31. Dealers may process foreign exchange for profits, dividends, and interest from foreign investors, upon CBM verification of investment status and compliance. 32. Dealers may process foreign exchange for expatriate employees' remittances, after verifying tax payments. 33. Dealers must verify that foreign investors comply with the Foreign Investment Law, Special Economic Zone Laws, or Myanmar Companies Act. 34. Dealers must collaborate with legal and regulatory authorities to verify suspicious transactions.

Chapter 6: Ordinary Trade Receipts (Clauses 35–44) 35. Dealers must verify that export proceeds are received within three months from the shipment date, per customs declarations. 36. Verification includes: (a) Declared value and shipment period; (b) Expected receipt date. 37. Dealers must obtain: (a) Customs-verified declarations; (b) Original declarations and actual receipt records. 38. Dealers must promptly report delayed receipts to CBM with explanations. 39. CBM may extend verification periods and collaborate with relevant departments and legal authorities. 40. Dealers must ensure unrepatriated proceeds are handled by authorized banks per regulations. 41. Dealers may convert foreign exchange into domestic currency and deposit it into exporters' accounts, subject to verification. 42. Dealers must verify that ordinary trade receipts are not foreign exchange reserve accounts, based on documentary evidence. 43. Dealers must ensure that domestic recipients or beneficiaries fulfill their foreign exchange payment obligations. 44. Dealers must apply the same rules as domestic foreign currency accounts for unrepatriated proceeds.

Chapter 7: Domestic Foreign Currency Accounts for Trade (Clauses 45–46) 45. Dealers may process foreign exchange for foreign direct investment, subject to CBM reporting, beyond the USD 10,000 per-person limit. 46. Residents may invest in direct investment, portfolio investment, real estate, or other categories, subject to transaction types, amounts, and information requirements.