Welcome to the latest edition of BLP’s monthly Myanmar update. We have distilled the latest Myanmar news into this ‘speed read’. Please get in touch for more information.
The new Myanmar parliament held its opening session on 1 February 2016. The parliament began its session by electing Mr U Win Myint of the National League for Democracy (NLD) as Speaker of the lower house. Mr U Ti Khun Myat of the Union Solidarity and Development Party was voted in as his deputy.
Parliament has set a date of 17 March to reveal the names of the presidential nominees. This deadline is later than expected, and cuts close to the 1 April deadline on which the NLD government will officially commence its term.
The delay has sparked hopes amongst NLD supporters that Ms Aung San Suu Kyi will negotiate a deal to overcome the constitutional bar prohibiting the election of Ms Suu Kyi herself as president. Ms Suu Kyi engaged in a third round of talks with Senior General Min Aung Hlaing on 17 February, widely speculated to be for the purposes of reaching a power-sharing agreement in relation to the presidency and the new government. However at a subsequent meeting with military officers, Mr Aung Hlaing reportedly pushed back against quick changes to the constitution, stating that the constitution should be amended “at an appropriate time” in accordance with constitutional provisions.
Update on amendments to the Mining Law
Following the Myanmar parliament’s approval of proposed amendments to the Myanmar Mines Law 1994 in December 2015 (see our December 2015 postcard for more information), the Ministry of Mines is preparing to amend the by-laws for the new mining law.
The Ministry of Mines is seeking suggestions and proposals for the by-laws, and has invited stakeholders to send their suggestions to the Department of Mines and Myanmar Gems Enterprise by 6 March. According to parliamentary procedure, the relevant by-laws must be implemented within 90 days after the approval of an amendment to the law.
We have published an article on the changes to the mining law and other recent developments in the Myanmar mining industry.
Update on Condominium Law
Update on second round of foreign bank licensing
The Central Bank of Myanmar (the CBM) announced on 8 February 2016 that 13 foreign banks (comprising institutions based in India, Mauritius, South Korea, Taiwan and Vietnam) have responded to the CBM’s request for proposals in Myanmar’s second round of foreign bank licensing (see our December 2015 postcard for more information).
The licensing committee of the CMB is expected to announce the preliminary licence approvals by the end of March. It is expected that three to five applicants will be chosen.
Taiwanese banks have made a strong showing, comprising eight out of the 13 applicants as follows: (i) CTBC Bank Co. Ltd., (ii) Mega International Commercial Bank Co., Ltd., (iii) Taiwan Business Bank Co., Ltd., (iv) Taiwan Cooperative Bank, Ltd., (v) Taiwan Shin Kong Commercial Bank Co., Ltd., (vi) First Commercial Bank, Ltd., (vii) Cathay United Bank Co., Ltd. and (viii) E.SUN Commercial Bank, Ltd..
The remaining five banks are: (i) State Bank of India, (ii) State Bank of Mauritius Ltd (now known as SBM Bank (Mauritius) Ltd), (iii) KB Kookmin Bank, (iv) Shinhan Bank and (v) BIDV.
Members of our team advised on the previous round of foreign bank licensing and have been involved in tenders and transactions involving the government and state owned enterprises. Please feel free to contact us for further information.
Update on applications for fourth telecoms operator licence
It has been reported that seven companies have submitted non-binding expressions of interest to participate in the fourth telecoms operator in Myanmar, comprising: (i) Singapore Telecommunications Limited (Singapore), (ii) Viettel (Vietnam), (iii) China Telecom (PRC), (iv) Free SAS (France), (v) MTN Group Ltd (South Africa), (vi) 1COM (Hong Kong) and (vii) Beijing Xinwei Telecom Technology Group Co., Ltd. (PRC).
The chosen foreign operator will own a minority stake in a joint venture which will receive the fourth telecoms operator licence. The joint venture will be formed together with a local consortium of 11 public Myanmar companies, as well as a government stakeholder.
It is reported that the government hopes the fourth operator will be able to cater to rural areas, in an effort to extend the benefits of telecoms reforms to such areas.
See our August 2015 postcard for more information.
Myanmar Investment Commission (MIC) approves 31 investments in January 2016
The MIC approved 31 new local and foreign projects in January 2016, according to figures published by the Directorate of Investment and Company Administration (DICA). Out of the 31 approvals, 15 were awarded to foreign companies, comprising primarily of players in the real estate and garment sectors.
According to the Director General of DICA, Mr Aung Naing Oo, foreign investors appear to be monitoring Myanmar’s political situation, but foreign investment is likely to rise once the new cabinet is in place and it is expected that Myanmar’s investment targets will be met by the end of the financial year.
Myanmar aims to achieve US$6 billion in foreign investment for the July 2015-2016 financial year. A level of US$5.2 billion has been achieved as at the end of January 2016, according to statistics published by DICA.
BLP participates in Seminar on Myanmar’s Transport Infrastructure needs and the role for the UK
On the occasion of the visit of Rt. Hon The Lord (Tariq) Ahmad of Wimbledon, Minister of Transport, the British Embassy and the Union of Myanmar Chambers of Commerce and Industry (UMFCCI) hosted a panel discussion on ‘Myanmar’s Transport Infrastructure needs and the role for the UK’.
Lord Ahmad in his introductory remarks emphasised the importance of developing transport infrastructure for the development of the Myanmar economy. He announced that UK Export Finance has increased its cover capacity to US$300 million to help UK companies export to Myanmar. This being important for UK companies looking at exporting to Myanmar as well as for Myanmar’s economic development.
BLP’s Yangon managing partner, Chris Hughes, gave the keynote speech, discussing key issues to consider for Myanmar to successfully upgrade its transport infrastructure. He discussed the role which public private partnerships may play in successfully attracting investment into the transport sector and how to better facilitate private financing in Myanmar.
The panel, including BLP partner Nomita Nair, discussed specific transport requirements, which are constraining Myanmar’s economic development and what could be done to enable more investment in the sector.
Visit the official UMFCCI website.