On 2 May 2024, the Department of Trade (“DOT”) under the Ministry of Commerce (“MOC”) of the State Administration Council (“SAC”) introduced a new procedure for Barter Transaction Arrangements (“BTA”). This development could have significant implications for trade practices in Myanmar, potentially affecting how goods and services are exchanged without using currency. Businesses and traders must adapt to these changes, which may influence market dynamics, import and export processes, and overall economic activity in the country.
– Barter Trade Boosts Exports, Balances Imports
The BTA facilitates the exchange of goods of equal value between countries without using foreign currency, promoting national exports. Approved export goods include rice, broken rice, beans, corn, white sesame, yellow sesame, black sesame, rubber, cotton, grains, coffee beans, betel nut, sugar, marine products, herbal medicines, lead concentrate (Pb > 20%), lead and zinc concentrate (Pb ≥ 20% & Zn ≥ 20%), copper ingot (Cu ≥ 99%), antimony ingot (Sb ≥ 90%). At the same time, imports cover imported goods such as fertilizer, pesticides, industrial raw materials, electric vehicles, agricultural equipment, fuel, palm oil, and other necessities. The monthly trade volume is capped at $60 million, split evenly between exports and imports. Eligible companies must be registered under the Myanmar Companies Law, recognized by both governments and hold an exporter/importer registration certificate.
– New Rules for Exporters and Importers Under BTA
Under the BTA, new regulations affect both exporters and importers. Exporting companies must obtain a BTA-specific export license, while importing companies must acquire a BTA-specific import license following the Myanmar Tradenet 2.0 procedure. They must ensure third-party verification of the goods’ price and quality. Additionally, exporting companies must submit an Export Bill Receivable Exemption (EBRE) Form. In contrast, importing companies must submit an Import Bill Payment Exemption (IBPE) Form to the Foreign Exchange Management Department under the Central Bank of Myanmar. Exporters and importers must complete their transactions within the license period, with the option to reapply for a new license only upon furnishing proof of completion of the previous export or import. Notably, the requirement to exchange 35% of export earnings into Myanmar Kyat during the initial test period is exempted.
– Rules for Barter Trade Compliance
According to the procedure, companies must complete export and import activities within the contract timeframe and conduct account clearance during the initial test period per the contractual terms. They must then provide evidence of the completion of the account clearance to the Department of Trade (“DOT”), Customs Department, and Foreign Exchange Management Department. Customs clearance declarations for export and import must also be submitted to the Coordination Task Force. Trade contracts must specify quantity, price, value, quality, and schedule of export/import. The price and quality of goods intended for export or import must be confirmed and validated by a third party and agreed upon by the contracting parties. Following this verification, the application for importing or exporting these goods must be initiated. All applicable taxes must be paid. Exporting or importing banned goods is prohibited.
– Regulatory Requirements and Oversight for BTA Contracts
Contracts must specify the initial test period and the start-up period, which will be forwarded to the MOC. Disputes must be resolved through signed contracts, and quality inspections require collaboration with relevant industry departments. A coordination workgroup will oversee BTA activities, reviewing monthly and evaluating effectiveness during the initial test period. Approval from the Foreign Exchange Supervisory Committee is needed to expand the range of goods traded. All transactions must comply with relevant laws and procedures, with adjustments made to adapt to changing conditions.
