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Myanmar Legal Update: Myanmar Lifts Restriction on Importation of Foreign Alcohol 

by Segolene Leffy

Published: May, 2020

Submission: June, 2020

 



In order to curb illegal importation, facilitate the sale and consumption of quality products in fulfilment of market demand and accurately assess and collect tax by the State, the Ministry of Commerce (“MOC”) issued Notification no. 38/2020 (“Notification-38”) on 25 May 2020 to remove foreign alcoholic spirits from the import restriction list. Although Notification-38 removes foreign alcoholic spirits from the list beer remains restricted. Following Notification-38, MOC also issued Notification no. 39/2020 on 25 May 2020 (“Notification-39”) regulating the procedures on importing foreign alcoholic spirits.


Under Notification-39, a Registration Certificate for Alcohol Importation (“RCAI”) is required to import alcohol. The applicant for the importation of alcohol must be a Myanmar company holding an importer-exporter registration certificate issued by the MOC and a director of the company must hold a wholesale license to distribute alcohol (“FL-11”). There is no clear definition or clarification on what ‘Myanmar company’ means or the permitted foreign investment ratio under Notifications 38 and 39 for importing foreign alcoholic spirits. Therefore, it can generally be presumed that a company with up to 35% of foreign shareholding is allowed to import foreign alcoholic spirits from the perspective of the Myanmar Companies Law 2017 (“MCL”). Moreover, the applicant company may either be an exclusive distributor of an alcohol brand(s) or the exclusive dealer for such a distributor. It is also compulsory for the applicant company to have duly licensed premises issued by the Ministry of Home Affairs (“MOHA”) for the distribution or storage of alcohol.


In respect of the Scope of Procedures (“SOP”) for importing alcohol, Notification-39 sets out the procedures involved such as the RCAI application, application for the alcohol import license and conditions related to alcohol importation.


In applying for the RCAI, company information such as the company name and company registration number and information on the alcoholic spirits to be imported must be listed. Such alcoholic spirit information includes the percentage of alcohol, brand name, trademark and type, ingredients and packaging, country of origin, the company’s address and FL-11 license. FL-4 (mixing, adding color and flavoring agents to foreign alcoholic spirits) and FL-5 (bottling of the imported alcoholic spirits) licenses are also required for importing pure alcohol/ethyl alcohol. The RCAI is valid for one year and its renewal must be applied for 3 months in advance of its expiry.


For the alcohol import license application, an original of the FDA approval, sample of how the importing company’s name will be affixed to the alcoholic spirit’s bottle, importer registration certificate and the pro forma invoice or sale contract relating to importing alcohol must be included.


Regarding the conditions on the importation of alcohol, importation shall only be conducted through Yangon Port or Yangon Airport. The cost, insurance and freight (“CIF”) per one liter of alcohol will be a minimum of USD 8.


In respect of labelling, the company holding an RCAI shall mention the type of alcohol, net volume, alcohol percentage, name of the importing company, registered office address or address of the distribution place on the packaging of imported alcohol. Moreover, it is necessary to affix the label “Tax Paid” before distributing the imported alcohol on the market. In terms of affixing the “Tax Paid” label, this must be performed under supervision by the Internal Revenue Department (“IRD”) within 21 days before the imported alcohol is moved from the customs warehouse.


The importation of foreign alcoholic spirits for hotels and duty free shops is not contemplated under Notifications 38 and 39 and the MOC will approve such importation via separate procedures.


The easing of restrictions on importing foreign alcoholic spirits through the issuance of Notifications 38 and 39 is a welcome development in terms of market liberalization given the country’s high and increasing demand for quality alcoholic spirits.


The information provided here is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.



Authors & Contacts



William Greenlee


Partner & Managing Director, Myanmar/Singapore


[email protected]



Nishant Choudhary


Partner, Deputy Managing Director & Head of Banking and Finance Practice, Myanmar


[email protected]


Mya Thita Oo


Mya Thita Oo


 Legal Adviser, Myanmar


[email protected]


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The post Myanmar Legal Update: Myanmar Lifts Restriction on Importation of Foreign Alcohol appeared first on DFDL.


 



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