Welcome to the latest edition of our regular legal update from the A&P Myanmar office.
This week, we highlight tighter lending criteria, a major report on transparency and corporate governance, and the latest government guidelines on COVID-19.
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Central Bank Urges Greater Checks on Lending
Lenders are being urged to take a closer look at their customer’s disclosed income before agreeing to grant loans, following a request from the Central Bank of Myanmar.
The call for greater due diligence – designed to combat laundering and tax avoidance – comes after an international taskforce put Myanmar on its ‘grey list’ of countries at risk of illicit financial transactions earlier in 2020. This move could heap pressure on domestic financial institutions, as it could lead international markets to consider Myanmar a higher risk.
Following the decision of the Financial Action Taskforce, the central bank has warned that it will take action against lenders who fail to tackle such activities.
Transparency and Corporate Governance Improving
Standards of business transparency and levels of corporate governance are rising, according to the latest report from the Myanmar Centre for Responsible Business (“MCRB”).
Established in 2014, the MCRB is a joint initiative of the Institute for Human Rights and Business and the Danish Institute for Human Rights. It is designed to encourage responsible business activities through dialogue, events and seminars based on the UN Guiding Principles on Business and Human Rights.
The MCRB’s latest Transparency in Myanmar Enterprises (TiME) report, published on 21 December, looked at public information and corporate disclosures of 260 companies and rated them based on criteria from the ASEAN Corporate Governance Scorecard. In 2020, it included 52 public companies, 174 private enterprises, 28 state-owned enterprises, and 6 companies listed on the Yangon Stock Exchange.
The report found that levels of disclosure have improved overall, with the top-three highest-scoring companies named as uab Bank, City Mart Holdings Group and Shwe Taung Group. It also highlighted that listed companies outperformed both state-owned and private enterprises, which have room to improve in terms of their corporate governance and information disclosure.
Public Requested to Maintain Public Health Measures in the ‘New Normal’
The COVID-19 pandemic will continue to affect the world for the foreseeable future, according to the Ministry of Health and Sports. Therefore, in order for essential public services such as education and healthcare to operate like normal, public health measures will have to become routine.
Speaking on 22 December, the Ministry said that regular hand washing, social distancing and face masks must continue in order to protect lives, livelihoods and economic development. It added that – while vaccines are being developed and approved – further research is required to determine their effectiveness.
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