Myanmar Profile 2016Burma 2016 Profile
Burma is a resource-rich country in a region of strong economic growth, bordering India, China and Thailand.
Burma Corruption Report
In Myanmar, bribery is a high risk area. Businessmen see bribery, a fragile constitutional state and complicated and non-transparent license regimes as serious obstacles to investments and commerce in Myanmar. It is suffering from high level of bribery in all areas. Myanmar hosted its first nationwide elections in November 2015, ending 50 years of reign.
Whilst the country's governance is becoming more and more concerned with the issue of corrupt practices, they are still entrenched and ubiquitous in the civil and commercial world. It criminalises proactive and proactive forms of corporate governance, misuse of authority and attempts at corrupt practices in the state. Fifteen years in prison and a financial penalty are the highest sentences for corrupt practices. Businesses are at high risks of corrupt practices and policy intervention in Myanmar's justice system.
In two out of five cases, most or all magistrates are considered guilty (GCB 2017). Nevertheless, only a small proportion of companies regard the judicial system as a great restriction (ES 2016). There is omnipresent institutional bribery in the judicial system, and there is the impression of de facto judicial and governmental oversight (HRR 2016).
In the course of the BTI 2016 constitution revision trial, the Supreme Court has taken the first step towards asserting its autonomy. Nonetheless, the challenge remains enormous; there is a shortage of funds and insufficient training in law (BTI 2016). Myanmar's Parliamentary Judiciary Commission receives over 10,000 appeals about issues in the field of justice, notably due to bribery (BTI 2016).
Enforcement of a treaty in Myanmar lasts almost twice as long as the local mean (DB 2017). Businesses find the judicial system ineffective in resolving litigation and disputing state rules (GCR 2015-2016). Burma has included the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 2016 in its national legislation, which allows businesses to request arbitrations in a third state ("ICS 2017").
ICS 2017 has no sound success in winning international recognition in Myanmar. Burma is not a contracting state to the International Centre for the Settlement of Investment Disputes (ICSID). Myanmar's domestic and international law enforcement system entails high risk of bribery. Almost half of the population believes that most or all policemen are dirty (GCB 2017).
Governments do not retain effective oversight of the country's military personnel and policing is unpunished (HRR 2016). Legislative frameworks for investigating bribery are seldom used and are ineffective under HRR 2016. Approximately one in seven companies reports suffering loss through larceny and acts of violence (ES 2016).
In many cases, policing demands significant bribery from the victim to start an investigation and the policing service regularly blackmails civil men (HRR 2016). Beyond areas of war, the peacekeepers generally observe the constitutional state, and a number of organisations have signaled a decline in the ubiquitous and menacing impact of the peacekeepers on the people under the new administration (HRR 2016).
Myanmar has a very high level of risks of corruption in the provision of government service. Over a third of companies anticipate an operational licence, almost half anticipate a building licence and more than a third anticipate the same when it comes to the application for an electricity supply (ES 2016).
Approximately every seventh company claims to give presents "to do things" (ES 2016). There is also a high risk of risk of corrosion when applying for capital expenditure approvals (ICS 2017). About one in five people consider most or all members of the administration involved to be guilty of fraud (GCB 2017). Liaisons with top public servants and corruptions are more important than individual abilities in the public sector competition (BTI 2016).
This is a severe liability due to state regulation (GCR 2015-2016). In the past, all rules were amendable without prior notification or writing (ICS 2017). Currently, Ministers have begun to consultation the general public before adopting new rules (ICS 2017). Myanmar Investment Law, recently adopted and coming into force in April 2017, is designed to streamline the rules (ICS 2017).
Setting up a company requires more action and the cost is significantly higher than the local mean, but the amount of gel is much less (DB 2017). Myanmar's country authorities are at high risk in terms of corrupt practices. Almost half of the companies state that they are expecting presents for a building permission (ES 2016).
International tenants can conclude long-term lease agreements with landowners or competent authorities (ICS 2017). Proprietorship of large properties is often controversial, as after half a hundred years of wide-spread expropriation and taking of lands, proprietary laws are often not well entrenched (ICS 2017).
In many cases, international companies are confronted with local authorities' appeals for insufficient advice and reimbursement (ICS 2017). In 2016, the federal administration introduced a new National Land-Use Policy, including providing the general population with information on managing the use of agricultural lands and the development of autonomous conflict settlement mechanism (ICS 2017). Burma has not included the principles of non-discrimination in its investments; there is no special law protecting against compulsory dispossession (ICS 2017).
Myanmar's new Law on Capital Expenditure bans nationalisation and states that authorised FDI will not be completed during the life of the project (ICS 2017). Registration of real estate in Myanmar is taking slightly longer than elsewhere in the area ("DB 2017"). Myanmar's corporate sector is exposed to a high level of corrupt practices in its fiscal authorities.
Every fifth company claims to give presents at meeting with taxpayers (ES 2016). About a third of the population believes that most or all taxpayers are dirty (GCB 2017). Enterprises make significantly more payment and expend significantly more to pay their duties than elsewhere in the area ("DB 2017").
On the Myanmar frontier, there is a high level of danger of corruption when goods are imported and exported (GETR 2014). One-fourth of companies claim to give presents in order to obtain an entry permit (ES 2016). Bribery of custom officers to prevent tariffs and rules is also usual (ISDP 2015).
Permits for imports and exports are granted on a case-by-case or case-by-case principle, with discretion for civil servants (BTI 2016). As the most problematical factor for imports, the enterprises name onerous entry proceedings, customs duties and bribery at the frontier (GETR 2014). Trading error accounts are the dominant conduit through which illegal assets are transmitted to and from Myanmar; trading error accounts account for 89.
The underinvoicing of imports was recognized as the major cause of incorrect billing of commercial transactions. Estimates put the sum of possible revenue losses in the 1960-2013 phase to between $2.9 and $3.6 billion (GF Integrity 2015). In 2017, cross-border traffic in Myanmar was hampered by a high number of delay and increased costs for the handling of inbound freight in the Yangon harbour (DB 2017).
Tariff compliance takes much longer than elsewhere in the area, while the cost is broadly in line with the local average (DB 2017). In Myanmar there is a moderate level of risks of corruption in government sourcing. Corrupt money and occasional payment are often replaced when issuing government orders and licences (GCR 2015-2016).
The redirection of publics funding is frequent and favouritism often affects the choices of civil servants (GCR 2015-2016). For Myanmar, open bidding is not the standard purchasing methodology (The World Bank 2017). Purchasing materials such as legislation and ordinances, invitations to bid, bidding documentation and contract notice are not available to the general public as such.
A number of industries in which non-German companies are not eligible to bid, such as the defence industry (The World Bank 2017). Since SEEs are proving expensive for the public authorities (ICS 2017), the federal administration has begun the privatization of some state-owned companies (SOEs). Whereas traditional SEEs made up a large part of the local economies, the federal administration has begun to promote developing the domestic market (ICS 2017).
Under the SEE Act of 1989, they have the sole right to engage in business activity in a number of industries such as finance, telecommunications and petroleum and gas, but, in reality, it is possible to develop the privatector, often in the shape of a common enterprise (ICS 2017). Myanmar's abundant reserves of nature are at high risk of being corrupted.
Myanmar's Human Resources Governance Institute points out that it has an enviroment that allows it to face rampant levels of bribery compounded by low approval processes, low levels of regulation and low levels of public sector responsibility (NRGI 2017). Businesses should be aware that Myanmar's commodity industry is typically dominated by state-owned corporations, but in reality it is possible for individuals to invest (ICS 2017).
Investigations are ongoing into claims that nearly USD 100 million in taxes from the sale of shares in jades have been embezzled under former government (FT, Jun. 2016). In Myanmar, trading in jades is characterised by low level of openness and high level of bribery (FT, Jun. 2016). Myanmar's domestic dispute is also said to have been fueled by jet mines ('NRGI 2017).
Burma is a member of the Extractive Industry Transparency Initiative (EITI 2017). Burma has revealed part of the title to the country's petroleum, natural gas and coal exploration businesses (EITI 2017). Up to eighty per cent of gemstones are not declared and bypass the official system (EITI 2017).
Myanma Timber Enterprises (MTE), a state-owned company, has been widely alleged to engage in abusive practice and fail to meet global industry practice (Frontier Myanmar, March 2017). The European Environmental Investigation Agency (EIA) has cautioned that the use of sub-contractors in the award of harvest entitlements is associated with high risk of fraud and fraud due to a failure of the necessary processes (Myanmar Times, Aug. 2017).
Due to the absence of openness, Denmark has issued an interim order against all Danes that prevent them from marketing telecommunications wood from Myanmar on EU market (Mongabay, March 2017). China and Myanmar have an extensive illegal wood trading business valued at several hundred million US Dollar per year (EIA & EU 2015).
However, Myanmar has a legislative frame to combat corrosion, which is still insufficient despite further attempts to contain it ("FTA 2016"). Both the Criminal Code and the Anti-Corruption Act include most types of government contracts, which include forced and punitive bribes, blackmail, attempted and abusive practices (Conventus Law 2016).
The sentences for these offences included prison sentences of up to 15 years for civil servants and a penalty of up to ten years and a penalty for "agents" as well as a custodial sentence of up to seven years and a penalty for others (Conventus Law 2016). This law demands that all civil servants of the law, the judiciary and the legislature declaring their property and admitting sanctions for those who do not do so.
Relief is not expressly ruled out, so it can be regarded as a bribe (Conventus Law 2016). 2016 regulations provide that civil servants may receive up to 25,000 MMK (approximately $25) in presents, those based on a "personal relationship" (an unspecified term) or those worth up to 100,000 MMK on worship days (Conventus Law 2016).
Myanmar's Anti-Corruption Act mandates the Myanmar Anti-Corruption Commission to deal with corrupt practices and corrupt practices. However, the Anti-Corruption Commission is primarily made up of former army officials and members of the governing political parties, which worries its neutrality (BTI 2016). Myanmar's legislation does not have its own definitions of personal corrupt practices, but the definitions of corrupt practices included in the Anti-Corruption Act could be understood to cover certain high-ranking executives in state-owned companies and public-private partnership; there is still no concrete proof of this understanding (Conventus Law 2016).
Most of the ordinances are included in various guidelines; more information from the World Bank can be found here. Under the latest directive for state organisations, all contracts worth more than 10 million MMK are covered by tendering legislation. Businesses should be aware that recent changes in governance and lack of legality mean that legislation cannot always be uniformly construed by the state and the judiciary (Conventus Law 2016).
Burma has already acceded to the United Nations Convention against Corruption, but has not yet done so by signing the OECD Convention against Bribery. Freedom of the judiciary has greatly increased since the beginning of the shift from junta to democratic power, but the regime retains scrutiny of the mass media industry through slander and other legislation against opponents (FotP 2017).
More and more, the goverment has begun to restrict free expression of opinion on-line by persecuting those who are said to have offended or denigrated the army (FotP 2017). Policing will continue to supervise policy makers, reporters, authors and embassies (HRR 2016). Myanmar's media are considered'not free' (FotP 2017). In Myanmar, the right of association is limited, but the regime has recently taken measures to relax barriers (HRR 2016).
Civic groups are becoming more and more open and free to debate people' s concerns about their own lives and politics (HRR 2016). For the first year in 2017, Myanmar was rated "partially free" by Freedom Home (FotP 2017). Over the past five years, civic organisations (CSOs) have begun to lobby for policymaking, criticise the regime and support the interests of governing bodies (BTI 2016).
There is still a dearth of openness on the part of departments and less willingness on the part of regional governments to co-operate with them ("BTI 2016"). That was Doing in 2017. Myanmar 2017 Stakeholder Assessments. 2017 Investment Climate Declaration. Burma 2017. Burma 2017 profile. The Global Corruption Barometer 2017. Press Liberty 2017. The Myanmar Times:
"ERA alleges MTE to withdraw from reform commitments", 11 August 2017. Myanmar Frontier: "Timber Sector Wants MTE to get the Chop", March 27, 2017. Denmark bans businesses from the sale of Myanmar teak on European Union markets", 20 March 2017. Company survey - Myanmar 2016. Convent law: Myanmar 2016 anti-corruption.
Transform index 2016. 2016 Human Rights Report. "Burmese explores $100 million Jade Levy misappropriation claims," June 3, 2016. Air capital and illegal financial flows to and from Myanmar: 1960-2013, released in 2015. Fight against Myanmar's 2015 corruption challenge. Illegal surface timers trafficking between China and Myanmar, Sept. 2015. The Global Enabling Trading Report 2014.