Myanmar Companies Are Now Allowed to Import Foreign Alcohol Legally Into MyanmarMay 29, 2020
The Ministry of Commerce (“MOC”) issued its new Notification 38/2020 on 25 May 2020 (“Notification 38”), allowing the importation of foreign alcohol and ending a decades-old ban in Myanmar. This is the second instance of the ban being relaxed, following the first time in 2015 when the MOC allowed local importers to import foreign wine only. The additional relaxation introduced by Notification 38 now presents a potential investment opportunity as well as a way of controlling and the preventing the illicit importation of liquor through the black market. Despite the importation of foreign wine being allowed since 2015 and the ban on foreign alcohol importation also now being lifted, beer still remains a prohibited item for importation into Myanmar.
Also on 25 May 2020, the MOC issued Notification 39/2020 (“Notification 39”), providing detailed guidance on licensing rules and requirements for alcohol importation. According to Notification 39, a Myanmar company incorporated in accordance with the Myanmar Companies Law can be a liquor importer if it meets the criteria stated in notification 39. As there is no clear definition of a Myanmar company in Notification 39, it is presumed that a company with up to 35% foreign shareholding can now become a liquor importer. This is indeed an improvement compared to the previous Notification 18, where only 100% local-owned companies had been able to import foreign wine into the country.
In addition, it should be noted that importation of liquor by duty-free shops and hotels will not be subject to notifications 38 and 39.
Who can be a liquor importer?
Notification 39 sets out certain criteria that a Myanmar company must meet in order to apply for a Liquor Importer Registration Certification (“LIRC”) with the MOC, such as:
- Having a valid importer and importer registration certificate issued by the MOC
- Having a valid relevant alcohol license (i.e., FL11, FL4, or FL5) issued under one of directors’ names
- Having a valid storage license issued by the relevant district General Administration Department
- Being granted the exclusive distributorship or exclusive dealership by a foreign liquor manufacturer and distributor
Term of the LIRC
The LIRC is valid for one year, and the application for renewal of the certificate must be submitted to the MOC at least three months before the expiration of the certification.
Terms and conditions for the importation of liquor
Notification 39 also sets out certain terms and conditions for liquor importation:
- Liquor shall be imported through Yangon port or Yangon airport
- The minimum import price is set at CIF (Cost, Insurance, and Freight) US$8 per liter
- Liquor importers shall comply with requirements on the label
- Liquor importers shall affix the tax stamp on liquor bottles within 21 days, under the supervision of the Internal Revenue Department, before moving liquor bottles out of the customs warehouse
- Liquor is to be stored only at licensed premises
Wholesale license is indeed required
Although it is not mentioned in Notification 39 that a liquor importer must also obtain a wholesale license with the MOC, it does mention that the liquor importer must comply with the relevant rules for distribution and opening a shop in the country. Hence, it is likely that a wholesale license will be required, especially in the case of a company with up to 35% foreign shareholding.