The Central Bank is hoping the new government will support a law that requires all residents with overseas bank accounts to submit regular reports to the monetary authority, which would allow it to collect better data on capital flows, offshore holdings and Myanmar investment overseas.
Under the Foreign Exchange Management Law, residents and companies are expected to report to the Central Bank on transactions involving their overseas accounts, said U Win Thaw, director general of the Foreign Exchange Management Department.
The law was passed in 2012, but the Central Bank has not received any reports from residents, he said.
“We need to cooperate with other departments like the Myanmar Investment Commission [MIC] to compile investment data on Myanmar citizens in foreign countries and the flow of foreign exchange as money is sent home,” he said.
Until now, government departments have been reluctant to ask for reports on international investments and bank accounts, as they feared their investigations may lead them to the country’s former dictators and their friends and relatives, said U Win Thaw.
In early April, the International Consortium of Investigative Journalists [ICIJ] released the Panama Papers, 11.5 million files from offshore law firm Mossack Fonseca, which included information about the offshore bank accounts of a number of Myanmar authorities, well-known businesspeople and their families.
“I suppose law enforcement will be easier under the new administration. Perhaps authorities in this government don’t have overseas accounts and will hopefully support our policy,” U Win Thaw said.
U Kyaw Win Tun, director of the Directorate of Investment and Company Administration (DICA), said his department has been unable to put together data on investment outflows, while laws only cover investment into the country.
“We still have some weaknesses in collecting data; that is, we cannot assign agencies like JETRO [Japan External Trade Organization] or KOTRA [Korea Trade Promotion Corporation] to other countries,” he said. Myanmar investment abroad includes manufacturing and other large enterprises, he said.
“We have also heard that people have not followed a law that states their money must be repatriated rather than sent to bank accounts in Singapore,” he said.
Under the Foreign Exchange Management Law, Myanmar nationals can open bank accounts abroad for transportation, insurance, tourism, labour exports, construction projects, settling foreign debt, to open a branch office, operate foreign currency services, or for other purposes with the approval of the government or Central Bank.
Every transaction should be reported to the Central Bank, which is responsible for approving overseas investments.
Foreign investors must follow the policies and show all related documents, said U Win Thaw, and if they are unable to provide the necessary information, the Central Bank may not allow them to repatriate profits.
Myanmar residents must go through the same process, both for direct and indirect investment overseas. The Central Bank may also limit the volume of capital transfers by issuing new regulations, he said.
If the new government agrees to the new policy, he added, the Central Bank will ask for documents for every payment or settlement between a Myanmar national and a person living in a foreign country, and will record information about those involved in foreign exchange transactions.
Source: The Myanmar Times
