Summary: Myanmar’s political leader Daw Aung San Suu Kyi has issued guidelines for acceptance of gifts to Myanmar’s civil servants to eradicate bribery and corruption in Myanmar. They provide clear guidance to businesses and others dealing with government on what is considered acceptable in this often difficult area. Prospective investors would be well advised to update or implement their ABC compliance policy to take account of them.
In one of her first official acts since taking Government, Myanmar’s political leader Daw Aung San Suu Kyi has issued guidelines for acceptance of gifts (“Guidelines”) to Myanmar’s civil servants as part of the government’s drive to eradicate bribery and corruption in Myanmar. The Guidelines were published just one working day after the new National League for Democracy government officially assumed power.
The Guidelines are intended to provide guidance to public officials on when the receipt of presents in a personal or social context is permissible, and when the acceptance of a gift may instead be deemed as an act of bribery. They provide clear guidance to businesses and others dealing with government too on what is considered acceptable in this often difficult area.
Myanmar’s Anti-Corruption Law has a very wide definition of “bribery” and the Guidelines also recognise that gifts can take different forms, such as meals, accommodation, travel, club memberships and even gold and silver.
As a basic principle, the Guidelines expressly forbid public officials from accepting any gift from a person or organisation which has been offered or given to the public official on account of their official position. This is further explained by referencing gift giving in the context of the gift giver trying to do business with an agency under the supervision of the official, or the gift giver potentially benefitting from an act which the official has the authority to do (or refrain from doing).
Similarly, public officials are instructed not to demand gifts and are required to inform their respective superior officers immediately about the offer of any gift, whether it is accepted or refused.
However, there are certain limited exceptions under the Guidelines which permit acceptance of gifts in the following situations:
- where the value of the individual gift is less than 25,000 kyats (around US$20) (albeit that the total value of multiple gifts received from a person or organisation in a year shall not exceed 100,000 kyats);
- where gifts are given on account of a familial or personal relationship; or
- where gifts having a value not exceeding 100,000 kyats are given on special occasions such as Christmas or Thadingyut.
The Guidelines also provide for permissible exceptions in relation to gifts by foreign governments.
The Guidelines are part of Myanmar’s recent push to combat bribery and corruption.
Historically, Myanmar has been criticised internationally for a culture of bribery and corruption, which by some accounts scored it among the worst places to do business by this measure (i.e. 147th place of 167 countries in Transparency International’s Corruption Perceptions Index 2015). The previous Government introduced the Anti-Corruption Law but left many in doubt as to the level of gift giving that might be acceptable in a culture where gestures of this kind are common in the business context. Enforcement of that law has also been weak.
The new Government has however put transparency and the rule of law at the centre of its agenda, and in so quickly issuing the Guidelines - which describe the problem of bribery as “rampant and obvious” - has signalled that stamping out bribery and corruption in order to make the country more attractive to foreign investors is a clear priority.
International investors in Myanmar should take note of the Guidelines when considering their own anti-bribery and corruption (ABC) measures. Such measures should be in place in any event where multinational businesses are operating (or considering operations) in countries – such as Myanmar – which may be considered high risk. This is especially the case for entities which are subject to ABC legislation such as the UK Bribery Act or the US Foreign Corrupt Practices Act, both of which have aggressive extra-territorial effect. Given that the Guidelines contain a number of exceptions, a robust approach is recommended to avoid scenarios where a public official may avoid censure under the Guidelines but US or UK ABC legislation may still be engaged.
Accordingly, before conducting any business in Myanmar, investors should implement, as a matter of urgency, a comprehensive ABC compliance policy to govern the conduct of their employees, in particular in relation to their dealings with foreign public officials and third party business partners. Investors should always revisit and revise their ABC compliance policy to take into account any new developments (such as the issuance of the Guidelines in this case).
Further, investors would be well advised to conduct or obtain proper and accessible ABC training for their local staff, suppliers and contractual counter-parties. It would also be prudent to conduct appropriate levels of compliance due diligence on potential counter-parties before entering into any joint ventures or partnerships in Myanmar.