Guidance

Overseas Business Risk: Myanmar (Burma)

Updated 9 August 2023

1. Political

On 1 February 2021, Commander-in-Chief Min Aung Hlaing, the Head of Myanmar’s Armed Forces, staged a coup d’état and overthrew the democratically elected civilian government led by the National League for Democracy (NLD). State Counsellor Aung San Suu Kyi and President Win Myint remain detained alongside a wide range of political prisoners. The opposition National Unity Government (NUG), formed by members of the former parliament, operates in exile and virtually.

A series of protests followed the coup alongside a Civil Disobedience Movement (CDM) focused on restricting the military regime’s control of vital services, particularly through peaceful strikes and a domestic boycott of military linked companies. This, alongside decisions made by the military regime, has impacted the public and private sector bringing severe disruption to basic services such as banking, health and transportation.

Political tension and unrest are widespread since the coup and general levels of violence have risen. Protests have become increasingly sporadic in order to avoid security forces. There has been an increased use of small explosive and arson attacks against targets such as buildings controlled by the Myanmar Security Forces.

Conflict has increased across Myanmar, including in Sagaing and Magway in central Myanmar, and in ethnic minority states in the north-east of the country and along the border with Thailand. The general situation remains volatile and unpredictable. The Myanmar Security Forces are responsible for serious human rights violations across the country and a campaign of ethnic cleansing against the Rohingya in Rakhine State. The UN Independent Fact Finding Mission has produced a number of reports which document the actions of the Myanmar Security Forces. The Assistance Association for Political Prisoners produces daily reports on the situation and statistics on the numbers killed, arrested and detained.

On 24 April 2021, the Association of Southeast Asian Nations (ASEAN) issued a five-point consensus calling for an immediate cessation to violence, access to humanitarian aid and for mediated dialogue between all parties concerned. The UK continues to support the ASEAN Five Point Consensus including through securing a UN Security Council resolution on the situation in Myanmar in December 2022. The Resolution demands an end to violence and urges immediate action by the military regime to fully implement the ASEAN Five Point Consensus and release all those arbitrarily detained.

Information on political risk, including political demonstrations, is available in the FCDO Travel Advice.

2. Economic

Myanmar is the 7th largest economy in ASEAN with a GDP of $63.99 billion (estimate) in 2023. With an estimated GDP (nominal) per capita of $1,180 (down from $1,527 in 2020), it remains a Lower-Middle Income country, the poorest in South East Asia (IMF, WEO April 2023). The World Bank reports around 40% of the population was in poverty in 2022 – a substantial increase from 24.8% in 2017. These GDP and poverty statistics highlight the status of a deteriorated economy after more than two years under the State-Administration Council (SAC) leadership. The decade-long economic reforms and hard-won development gains are now being reversed following the SAC’s dramatic policy changes after the February 2021 coup. Economic growth is forecasted to be a modest 3% in 2023 (World Bank, MEM January 2023) and largely restrained by the increasing conflict, double-digit inflation and electricity shortages.

Prior to the coup, COVID-19 had already started to hit the economy hard with a decline in GDP growth to 3.2% in 2020. During the quasi-civilian rule period from 2011 to 2021, liberalisation on economic governance, trade and investment resulted in the opening of the economy with positive impacts and an average of 6% growth. Since the coup the garment, tourism and retail sectors experienced significant slowdowns with implications for the poorest in society. FY2022/23 GDP per capita remains around 13% lower than 2019.

Myanmar has seen increased economic mismanagement with growing state control and a move away from the market system to one with increased restrictions, reversal to a relationship-based economy, and a decline in the rule of law. There have been some high-level withdrawals of international firms, with further risk of growing international economic isolation following the October 2022 decision by the Financial Action Task Force (FATF) to add Myanmar to the list of high-risk jurisdictions subject to action (also known as the blacklist) due to the country’s lack of progress on their anti-money laundering and counter-terrorist financing action plan.

There remain potential further economic risks if conflict and instability increase. Even if the situation remains unchanged, it can be expected that the economy will continue to ‘bounce along the bottom’ given the economic mismanagement from the regime, which is likely to maintain difficulties for consumers and businesses in terms of restricted access to banking and energy. Unless these issues get resolved, a significant rebound in growth remains unlikely in Myanmar.

Key figures at a glance

• population: 54 million (IMF, 2023)
• GDP: USD 64 billion, (IMF, 2023)
• GDP per capita: $1,180 (IMF, 2023)

3. Sanctions

The UK government, alongside international partners, have imposed financial, trade and immigration sanctions in respect of Myanmar. The UK’s autonomous sanctions regime is established by the Myanmar (Sanctions) Regulations 2021 (“the Regulations”), which have replaced the Burma (Sanctions) (EU Exit) Regulations 2019. Further information and guidance is available regarding the UK’s sanctions regime relating to Myanmar.

Since the coup, the UK Government has announced several sanction designations targeting the military’s access to arms, equipment and revenue. The most recent sanctions were announced in March 2023.

See full guidance on the trade, immigration and financial sanctions. Businesses should review the UK Sanctions List which identifies entities and individuals designated under the Regulations, and details of the sanctions regimes in respect of which they have been designated.

The Regulations apply to conduct in the United Kingdom or in the territorial sea by any person, and to UK persons (a United Kingdom national, or a body incorporated or constituted under the law of any part of the United Kingdom) worldwide.

As regards finance, the Regulations prohibit a person knowingly, or with reasonable cause to suspect, from: dealing with funds or economic resources owned, held or controlled by a designated person; making funds available directly or indirectly to a designated person; making funds available to any person for the benefit of a designated person; making economic resources available directly or indirectly to a designated person; and making economic resources available to any person for the benefit of a designated person.

Furthermore, it is prohibited intentionally to participate in activities knowing that the object or effect of them is, whether directly or indirectly, to circumvent any of the above financial prohibitions, or to enable or facilitate the contravention of any such prohibition.

The Regulations currently impose trade restrictions on military goods and technology, on dual-use goods and technology, and on specified goods and technology which may be used to repress the civilian population in Myanmar, or for interception or monitoring purposes. It also imposes further trade restrictions in respect of the provision of interception and monitoring services to, or for the benefit of, the Government of Myanmar, or the provision of certain services, funds or armed personnel to, or for the benefit of, the Myanmar Armed Forces. “For military use” is defined in Chapter 3 of the UK Myanmar (Sanctions) Regulations 2021.

As regards trade, the trade prohibitions in the Regulations cover the export or supply and delivery of certain items to, or for use in, Myanmar, and the making available of certain items to persons connected with Myanmar or for use in Myanmar, as well as the provision of certain related ancillary services. This means that, even if the initial destination is not Myanmar, the prohibition may still apply. Exporters should check the ultimate end use of goods and may apply for a licence or contact the Export Control Joint Unit (ECJU) if they know or think the items may be used in Myanmar.

For general guidance on export controls and trade sanctions, contact the Export Control Joint Unit: exportcontrol.help@trade.gov.uk, +44 (0)20 7215 4594.

4. Business and human rights

The UK Government is clear in its opposition to the coup and is pushing for the restoration of democracy, the protection of rights and freedoms and unobstructed humanitarian access.

In association with our allies and partners, the UK Government has tailored its response to the coup and sought to impose a cost on the military regime while protecting the poorest and most vulnerable. We recognise that the complete collapse of the economy will significantly impact the most vulnerable, destabilise the wider region and cause issues for years to come. International trade and investment have a key role to play in poverty reduction, economic development and the prevention of oligopolies in markets thereby providing the citizens of Myanmar choices.

Businesses should be aware that the commercial interests of the Myanmar Security Forces, and associated individuals, are wide-ranging. Businesses operating in Myanmar should remain aware of developments in relevant sanctions.

If procuring natural resources from Myanmar, particularly teak, businesses should be aware of sanctions and should ensure they conduct thorough supply chain due diligence to ensure that they are not supporting the military or its associated businesses.

We recommend that gem importers conduct thorough supply chain due diligence to ensure that they are not supporting the military or its associated businesses, even if their supply chain seems to be outside of Myanmar. Ruby, jade and pearl exports are known to be heavily controlled and associated with the military and may enter into the UK market through other countries.

The Myanmar military regularly uses air strikes against civilian targets. If dealing with any entity linked to Myanmar’s aviation sector, businesses – including those in the insurance sector – should conduct thorough supply chain diligence to ensure that commodities such as jet-fuel do not reach the military. Businesses operating in Myanmar should remain aware of targeted sanctions on individuals and entities in the aviation fuel sector.

The UK Government has undertaken an extensive consultation with civil society and UK businesses trading with Myanmar and has determined the following issues are of most concern to UK businesses.

Continuing business operations in Myanmar

In line with the UK Government’s objective to protect the most vulnerable and to encourage market diversification, we advise that UK businesses currently operating in Myanmar may continue to do so while the political, economic and societal environment allows and that businesses should comply with standards of responsible business conduct, including respecting human rights. They will also need to ensure they are taking account of FCDO Travel Advice. The UK Government is clear that UK businesses must fully comply with relevant sanctions and not enter relationships that benefit the military regime.

We also encourage all businesses operating in Myanmar to assess the impact of a potential withdrawal from the market in line with United Nations Guiding Principles on Business and Human Rights. Please refer to our guidance on due diligence below.

Responding to workforce concerns and human rights violations and abuses

The UK Government is seriously concerned about the increasing human rights violations being observed in Myanmar. Businesses should work closely with their suppliers and partners to ensure that the safety, security and wellbeing of their workforce is a primary concern and that employers are respectful of individual rights, including the right to protest. We encourage businesses to retain workers undertaking lawful and peaceful protest wherever possible and to remain compliant with their terms of employment, including not to dismiss workers for taking part in peaceful protest. For more information on the human rights situation please consult the UK’s Annual Human Rights and Democracy Report.

The UK has ratified all eight of the fundamental International Labour Organisation (ILO) conventions, including CO87 (Freedom of Association and Protection of the Right to Organise) and CO98 (Right to Organise and Collective Bargaining) and we expect businesses to ensure they and their suppliers and partners are compliant with these conventions. The OECD and International Labour Organisation have issued guidelines for multinational enterprises on responsible business conduct including regarding these conventions. More information and advice on the OECD guidelines can be sought from the UK National Contact Point.

The Independent Investigative Mechanism for Myanmar (IIMM) is collecting evidence of the most serious international crimes and violations of international law committed in Myanmar since 2011, this includes violations since the 1 February 2021. We encourage businesses to report any observed human rights violations or abuses to the IIMM.

Remaining compliant with sanctions for the transit of goods

Businesses should work with logistics partners to undertake all practical efforts to minimise exposure to military owned supply chains and ports. Some information on subsidiaries and affiliate companies of Myanmar Economic Holdings Ltd (MEHL) and Myanmar Economic Cooperation (MEC) can be found in the 2019 United Nations report detailing the economic interests of the Myanmar military. However, this is not an exhaustive list and it is up to businesses to conduct their own due diligence.

Making funds or economic resources available to, or for the benefit of, a designated person (directly or indirectly), without a licence or valid exception, is prohibited under financial sanctions legislation.

The Office of Financial Sanctions Implementation (OFSI) has published guidance including specific FAQ guidance for importers and exporters. Any suspected breaches of financial sanctions should be reported to OFSI.

Paying taxes and other fees

Businesses should remain compliant with the laws of Myanmar unless these violate relevant sanctions, international law or are illegal under the UK Bribery Act (see Section 5 below) or other UK laws. In all cases we recommend businesses seek independent legal advice.

Selling goods and services via third parties

Businesses with supply chain links to Myanmar face reputational, economic and legal risks and should ensure that third parties are aware of their own legal obligations and international frameworks such as OECD guidelines. Businesses trading in goods or services outlined in Chapter 1 of UK sanctions guidance should consider seeking legal advice noting that even if the immediate destination is not Myanmar, the prohibition may still apply.

In general businesses should consider the reputational and legal risks of goods or services being linked to, or utilised by, the Myanmar Security Forces and work to limit supplies through third party distributors accordingly.

Conducting safety critical maintenance on equipment linked to Myanmar Security Forces

Businesses seeking to trade with sanctioned entities or individuals (i.e. “designated persons”) should be aware of the technical assistance provisions contained in the UK sanctions guidance and should consider Chapter 3 regarding authorisation and licencing for a sanctioned activity.

Applications for trade sanctions licences can be made through SPIRE. Enquiries for applications for certain items and services that are not processed on SPIRE can be made to tradesanctions@trade.gov.uk.

Financial sanctions are distinct from trade sanctions and Chapter 6 of the Office of Financial Sanctions Implementation (OFSI) general guidance deals specifically with exceptions and licensing. The guidance covers the most common exceptions relating to financial sanctions as set out in legislation.

A licence is written permission from OFSI permitting an act that would otherwise be prohibited under sanctions regulations. A licence from OFSI does not compel any party to undertake any transaction. Further information on OFSI licencing, as well as compliance and enforcement and the OFSI consolidated list of financial sanctions targets, can be found at www.gov.uk/ofsi. Completed licence application forms and queries can be submitted to ofsi@hmtreasury.gov.uk. OFSI prioritises urgent and humanitarian cases, i.e. cases that involve a risk of harm or threat to life. In all cases OFSI recommends applicants seek independent legal advice.

Remaining compliant with sanctions if facilities are built on land owned by sanctioned entities and individuals

OFSI will consider licensing activities that fall within the licensing grounds set out in the legislation. These licences, however, cannot be issued retrospectively so if an entity has carried out an act that required a licence, without having obtained one beforehand, they may have breached financial sanctions and should consult Chapters 5 and 7 of OFSI’s general guidance immediately.

You should consider whether a designated person owns or controls (directly or indirectly) any relevant land that relates to the payment of ground rent.

UK businesses should conduct thorough due diligence on land ownership before entering into a contract to avoid providing financial support to the Myanmar Security Forces or their associated businesses.

Remaining compliant with sanctions imposed by other nations such as the United States or European Union

If you have queries about sanctions imposed by the US, Canada, EU, or other states, you should consult relevant national guidance and legislation. You may also wish to take legal advice, as appropriate.

Guidance regarding due diligence

Businesses are ultimately responsible for conducting due diligence regarding their engagement and operations within Myanmar and should seek legal advice to ensure compliance with relevant sanctions, law and standards, as well as undertaking appropriate risk assessments.

The UK Government expects businesses to work with businesses that follow best practice on responsible business, including respecting human rights in Myanmar and to not enter or continue contracts, rent from or purchase from private sector entities that do not meet such standards.

The OECD has produced guidelines for multinational enterprises and on due diligence. The UK Government also encourages businesses to implement the United Nations Guiding Principles of Business and Human Rights (UNGPs). Since the whole of Myanmar can be considered a conflict-affected and high-risk area, businesses should conduct ongoing and heightened due diligence.

Businesses should be aware that under section 54 of the Modern Slavery Act 2015, certain businesses with a turnover of £36 million or more are required to produce modern slavery statements during each financial year setting out the steps they have taken to tackle modern slavery in their supply chains and any other part of its own business.

5. Bribery and corruption

The Bribery Act applies to non-UK companies operating in the United Kingdom, and to UK companies working overseas. It created four prime offences:

• two general offences covering the offering, promising or giving of an advantage, and requesting, agreeing to receive or accepting of an advantage
• an offence of bribing a foreign public official
• an offence of failure by a commercial organisation to prevent a bribe being paid to obtain or retain business or a business advantage (should an offence be committed, it will be a defence that the organisation has adequate procedures in place to prevent bribery)

The Act recognises that no bribery prevention regime will be capable of preventing bribery at all times. A company will have a full defence if it can show that despite a particular case of bribery it nevertheless had adequate procedures in place to prevent persons associated with it from bribing. Companies must therefore make sure that they have strong, up-to-date and effective anti-bribery policies and systems in place to prevent bribery by persons associated with them.

6. Terrorism and security

Please see the information provided in the FCDO Travel Advice Terrorism section

7. Intellectual Property

Myanmar is a country with limited support for intellectual property (IP) rights as IP laws remain unimplemented. The UK government’s advice globally is that it is essential to register your rights as soon as possible in order to be able to defend and enforce them. IP rights are territorial in nature which means that registrations in the UK or another country’s jurisdiction are not automatically enforceable in others.

Myanmar is a member of the World Intellectual Property Organisation (WIPO). However, Myanmar is not a signatory to any conventions.

The IPO has attachés based in Singapore providing IP business support to UK companies operating across Southeast Asia.

The IPO has information on protecting your intellectual property overseas.

Further information on the local IP system can be found at the Myanmar IPO website.

8. Useful information

The Myanmar Centre for Responsible Business (MCRB), an independent not-for-profit organisation based in Yangon, publishes guidance for companies to assist their human rights due diligence in Myanmar. MCRB also publish an annual report, “Pwint Thit Sa” , which benchmarks the disclosure practices of large Myanmar companies. This independent guidance may be useful for due diligence on local business partners; however, businesses should make final conclusions based on their own assessment.

See the 2019 UN Human Rights Commission independent report into the economic interests of the Myanmar Military (PDF, 1,894 KB).

9. Organised crime

Please see the information provided in the FCDO Travel Advice Safety and security section.

10. Further information

The Department for Business and Trade retains an office at the British Embassy in Yangon and can assist with general enquiries: Trade.Yangon@fcdo.gov.uk.