The Central Bank of Myanmar has backlisted nearly 200 companies and their directors for violating foreign exchange regulations designed to line the regime’s pockets with hard currency.
A total of 197 companies, mostly trading firms in Yangon, were blacklisted for failing to deposit foreign currency export earnings in junta-controlled banks as required by the Myanmar Foreign Exchange Supervisory Committee (FESC), the bank said Monday.
Among those punished is a company linked to regime-aligned Karen warlord Saw Chit Thu, who has been sanctioned by the U.S. for his involvement in cyber scams along the Thai border.
Since the 2021 coup, Myanmar’s military regime has faced international sanctions, the exodus of foreign investment, and trade disruption, resulting in a hemorrhage of foreign currency reserves.
That prompted a flurry of regulations by the junta trying to squeeze every scrap of hard currency out of businesses and overseas labor, including the Foreign Exchange Management Law.
Previously, the CBM required exporters to deposit their earnings within four months on pain of one year in prison and/or a fine.
But in December 2023, CBM ordered companies that export to Asian countries to deposit their income in a designated bank in Myanmar within 30 days, and companies that export to other parts of the world within 60 days.
Exporters must then convert 25 percent of their dollar earnings into kyats through authorized dealers at the derisory official rate of 2,100 kyats per dollar. The market rate is around 4,500 kyats.
A local businessman explained that the huge gap between the official exchange rate and real market rate is the reason companies have failed to comply.
He said one possible scenario is that blacklisted companies will simply rename themselves.
In May, Commerce Minister Tun Ohn warned businesses against renaming themselves.
But the current blacklist is probably a shot across the bow. The CBM said the blacklisted companies were those that had failed to deposit their export earnings between 2016 and 2020.
In June 2022, the CBM also blacklisted the 137 companies for similar violations. Some 56 of them were removed from the blacklist once they deposited their export earnings in September 2024.
