Last updated: 14 Feb 2013
Business risks
Australian companies are advised to spend time investigating the market, obtain professional advice where appropriate and thoroughly investigate the issues in entering the market and establishing business relationships.
Australian firms wishing to operate in this country should commit to the highest level of corporate behaviour and familiarise themselves with Australia's law and penalties pertaining to bribery of foreign officials.
Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. Further information on the regulations governing bribery of foreign public officials is available.
For further information on frauds, scams, personal and asset security, intellectual property protection and other business risks please visit www.austrade.gov.au/Legal-issues/default.aspx
As Myanmar is an emerging market undergoing a political and economic reform process, doing business there is subject to risk. It is recommended that Australian companies thoroughly investigate the market and obtain professional advice where appropriate, including legal advice and relevant advice on sanctioned trade (see below).
Companies are advised to undertake in-depth discussions with the ministries responsible for their sector to identify relevant government policies and regulations and how they apply to foreign businesses or investors. Individuals and companies doing business with Myanmar should be aware that individuals and companies with close ties to the military, continue to exercise influence across many sectors of the economy, including – but not limited to – the oil, gas and timber sectors.
Australian firms entering Myanmar are encouraged to adhere to the highest standards of corporate behaviour and compliance with the law. They should conduct appropriate due diligence, exercise all reasonable precautions about who they are doing business with and, where necessary, obtain independent legal advice.
Australians involved in or considering doing business with Myanmar should familiarise themselves with the scope of the arms embargo under the Autonomous Sanctions Regulations 2011 which prohibits the supply, sale or transfer of arms and related materiel and the provision of related services to Myanmar, including the Myanmar military and military-affiliated companies.
Australian companies operating in Myanmar are advised to familiarise themselves with Australia’s laws and penalties pertaining to bribery of foreign officials (see below). They should consider implementing the guidance set out in such corporate responsibility frameworks as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. The UN Guiding Principles set a global standard for preventing and addressing the risk of adverse human rights impacts linked to business activity. They outline the responsibilities of companies to respect, protect and remedy the human rights of individuals and communities impacted by their operations. The Australian Government strongly supports the Guiding Principles and encourages companies to engage with, and implement, them.
Since transitioning to civilian rule, the Myanmar Government has adopted a Labour Organisation Law and a Labour Dispute Law, with assistance from the International Labour Organisation (ILO). Despite these positive changes, violations of basic human rights are still reported to exist. Australian companies doing business in Myanmar should take appropriate precautions to ensure they are not perpetrating or contributing to a continuation of unacceptable business practices.
Due diligence checks
As there is presently no company register in Myanmar, conducting due diligence checks on companies or potential business partners can be challenging. There are auditors and accountants operating in Myanmar and some are capable of identifying and providing advice on potential partners.
One indicator of an importer’s credit standing is their ability to raise Letters of Credit from approved banks in a reasonable time frame. A company’s business licence can also be used to establish important basic information such as amount of registered capital, establishment date and period covered by the licence, however, information such as this is limited and deeper due diligence should be conducted on the ground.
It is essential that any Australian company considering the establishment of an office or the appointment of an agent or distributor in Myanmar seek legal and taxation advice. Intellectual property protection is also difficult and adherence to international business practices and norms is not well established.