Myanmar News - Changes for the Use of Free Trade/Consignment Warehouses in the Thilawa Special Economic Zone

On 14 July 2017, the Management Committee of the Thilawa Special Economic Zone issued two Instructions in accordance with sec. 11 (f) Myanmar Special Economic Zone Law (2014) and rule 51 (ii) Myanmar Special Economic Zone Rules (2015), making amendments to the previous Instruction on Warehouses and the Procedures for Handling Cargos Held on Account in Special Economic Zones (Instructions No. 05/2016 and No. 06/2016 dated 7 October 2016).

Please find below a short summary of the most important changes.

On 14 July 2017, the Management Committee of the Thilawa Special Economic Zone issued two Instructions in accordance with sec. 11 (f) Myanmar Special Economic Zone Law (2014) and rule 51 (ii) Myanmar Special Economic Zone Rules (2015), making amendments to the previous Instruction on Warehouses and the Procedures for Handling Cargos Held on Account in Special Economic Zones (Instructions No. 05/2016 and No. 06/2016 dated 7 October 2016).

Please find below a short summary of the most important changes.

Under Instructions No. 05/2016 and No. 06/2016, “Cargos Held on Account” were defined as “Cargos in transit for storage in a Free Zone Warehouse pertaining to the temporary storage of Cargos from a Foreign Supplier without the payment of duties and other taxes until such time that such Cargos are withdrawn for consumption in Myanmar or shipped to another location outside of Myanmar; (…).”

Under Instructions No. 05/2016 and No. 06/2016, “Cargos Held on Account” were defined as “Cargos in transit for storage in a Free Zone Warehouse pertaining to the temporary storage of Cargos from a Foreign Supplier without the payment of duties and other taxes until such time that such Cargos are withdrawn for consumption in Myanmar or shipped to another location outside of Myanmar; (…).”

Pursuant to the new Instructions No. 01/2017 and No. 02/2017, this definition shall be replaced as follows: “Cargos Held on Account” means “Cargos in transit for storage in a Free Zone Warehouse pertaining to the temporary storage of Cargos from a Supplier without the payment of duties and other taxes until such time that such Cargos are withdrawn to be imported for consumption in Myanmar or shipped to another location outside of Myanmar; (…).”

“Supplier” is forthwith defined as “a foreign person or entity, whether or not doing business in Myanmar, or a domestic importer who is a Myanmar citizen or a resident entity incorporated in Myanmar, which has shipped Cargos from foreign country into Myanmar for the purpose of storing the Cargos as Cargos Held on Account in a Free Zone Warehouse”.

Comment Luther: The Instructions No. 01/2017 and No.  02/2017 further liberalize the cargo market, generally allowing the use of free trade/consignment warehouses in the Thilawa Free Zone (i.e. outside of the customs territory of Myanmar) for both foreign businesses, as well as Myanmar importers.

Cargo (i.e. chattel, merchandise, consumer goods, food products, raw materials, semi-finished materials, components and packaging materials or otherwise any finished or unfinished goods which are not prohibited by the Law and the Rules and orders made thereunder and which have been brought into Myanmar and which are not otherwise classified as a Regulated Article) may now be shipped from a foreign country to a warehouse in Thilawa’s Free Zone by either a foreign person or entity (whether or not doing business in Myanmar), or a domestic importer who is a Myanmar citizen or a resident entity incorporated in Myanmar.

The government recently published the (Draft) Law concerning the Registration of Deeds. Upon enactment, the Deeds Registration Act (The Registration Act, India Act XVI) (1909) will be repealed and replaced by the new law. The rules, regulations, by-laws, notifications, orders, directives and procedures issued under the Deeds Registration Act (1909) will, however, continue to apply unless contrary to the new law.

Annexes

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		Alexander Bohusch Rechtsanwalt/Attorney-at-law (Germany) Luther Law Firm Limited Myanmar Phone +95 1 500021 alex.bohusch@luther-lawfirm.com
		Fabian Lorenz, M.A. Rechtsanwalt/Attorney-at-law (Germany) Luther Law Firm Limited Myanmar Phone +95 1 500021 fabian.lorenz@luther-lawfirm.com
		Nicole Schwiegk Rechtsanwalt/Attorney-at-law (Germany) Luther Law Firm Limited Myanmar Phone +95 1 500021 nicole.schwiegk@luther-lawfirm.com
		Fanny Tatin Avocat/Attorney-at-law (France) Luther Law Firm Limited Myanmar Phone +95 1 500021 fanny.tatin@luther-lawfirm.com