On December 30, 2022, the Central Bank of Myanmar (CBM) updated its guidelines on the Thai baht to Myanmar kyat (THB-MMK) direct payment mechanism for Myanmar-Thailand border trade and other flows of capital. The CBM’s guidelines outline an expanded mechanism allowing more trade gates and more designated banks, stipulating banking arrangements for worker remittances, setting out a payment mechanism for exports, clarifying procedures for importing goods via the Myanmar-Thailand border trade, and instituting new reporting procedures. The THB-MMK mechanism came into being on March 3, 2022, as a pilot project for border trade in Myawaddy, Tachileik, and other areas approved by Myanmar’s Central Committee on Ensuring Smooth Flow of Trade and Goods. In this update, Myawaddy, Tachileik, Myeik, Kawthoung, Mawtaung, and other approved border trading zones are identified as open to the THB-MMK mechanism. During 2022, the following banks were approved to provide services for the THB-MMK direct payment mechanism: Approved March 4: Ayeyarwaddy Farmers Development Bank and Kasikornbank Public Company Limited Approved July 29: Myanmar Economic Bank and Bangkok Bank Public Company Limited (Yangon branch) Approved August 12: Kanbawza Bank (KBZ) and Bangkok Bank Public Company Limited (Yangon branch) Approved December 30: Ayeyarwady Bank and Bangkok Bank Public Company Limited (Yangon branch), CB Bank PCL and Bangkok Bank Public Company Limited (Yangon branch), UAB Bank and Krung Thai Public Company Limited, Myanmar Apex Bank and Siam Commercial Bank Myanmar Limited, Yoma Bank and Siam Commercial Bank Myanmar Limited Banking arrangements for workers’ remittances were also stipulated in the new update. In this regard, designated banks can process these remittances by partnering with CBM-permitted international currency transfer businesses, mobile banking service providers, and mobile money service providers after obtaining approval from the CBM. An addition to the direct payment mechanism is a requirement that exporters manage their received export

The Contract Committee of Thailand’s Consumer Protection Board has issued new requirements and prohibitions for consumer loan agreements. The Notification of the Contract Committee Re: Stipulation of Loan Business for Consumers as a Contract-Controlled Business B.E. 2565 (2022) was published in the Government Gazette on December 13, 2022, and will take effect after 90 days (i.e., on March 13, 2023). The notification repeals and replaces the Contract Committee’s previous notifications regarding the same subject matter, which were issued in 2001 (Nos. 1–2), 2002 (No. 3), and 2015 (No. 4). The notification enhances protection for consumers by extending the scope of application and stringently regulating the content of agreements for loans to individual consumers. Key Definitions The scope of the notification is largely indicated by its definitions of a few key terms: “Loan business for consumers” refers to a business in which the operator enters into an agreement to grant a loan to a consumer (i.e., not a juristic person) or to allow the consumer to borrow money from the business operator, whereby the consumer will spend money for a purpose other than their occupation or business to earn income. This includes granting loans to consumers through an electronic channel. The notification can also apply to personal loan businesses, digital loan businesses, and peer-to-peer lending businesses regulated by the Bank of Thailand. “Business operators” include financial institutions under the law relating to financial institutions; banks established under specific laws; individuals who carry out a loan business in their ordinary course of business; and juristic persons that engage in loan business, securitization business, or asset management of rights to monetary claim. Certain types of businesses and organizations—such as cooperatives—are excluded from the scope of this notification. “Interest” means legal interest in accordance with the Civil and Commercial Code, and it includes

On October 31, 2022, the Department of Trade in Myanmar’s Ministry of Commerce announced that payments for importation at the border are to be made via bank transaction. This announcement comes into force with Import/Export Newsletter No. 10/2022, dated October 31, 2022, issued by the Department of Trade, with the purpose of implementing a systematic payment system for import and export at the border, in accordance with a suggestion made by the Financial Action Task Force (FATF), an international financial watchdog. (This follows the recent news that the FATF has blacklisted Myanmar.) This requirement means that only bank transactions will be accepted for import payments in the border trade. Initially, this system will be applied to trade at the Myanmar-Thailand border only. The new requirement to pay for imports only via bank transaction states that export earnings and other types of foreign currency earnings (including salary and income remitted by Myanmar workers overseas) will be allowed to be used for imports. Importers are required to make the payments for import goods—using these earnings—via their banks. That is, Importers operating in the border trade must have foreign currency earnings received through official banking channels and must make import payments abroad through official banking channels using those earnings. In contrast to previous practices, they are unable to use other sources of income and are not able to make other payment arrangements that do not involve bank transactions. The procedures for importation at the Myanmar-Thailand border are as follows: Companies applying to the Department of Trade for an import license must produce credit advice and original bank statements that prove the receipt of export earnings or other earnings into their bank account. The Department of Trade will scrutinize the reported export earnings or other earnings, and approve the import license for an

On October 21, 2022, the Financial Action Task Force (FATF) added Myanmar to the list of high-risk jurisdictions having significant deficiencies to counter money laundering, terrorist financing, and financing of proliferation. The FATF is an international financial watchdog that aims to impede global money laundering and terrorist financing. It is a policymaking body that monitors implementation of FATF Recommendations and FATF Standards and is not binding as a supervisory authority for financial institutions. Myanmar will remain on the list of countries subject to a call for action until the country has implemented an action plan that: demonstrates an improved understanding of money laundering risks in key areas; demonstrates that onsite and offsite inspections are risk-based, and hundi (a type of informal remittance instrument for transferring money) operators are registered and supervised; demonstrates enhanced use of financial intelligence in law enforcement authorities’ investigations, and increasing operational analysis and dissemination by Myanmar’s Financial Intelligence Unit; ensures that money laundering is investigated and prosecuted in line with risks; demonstrates investigation of transnational money laundering cases with international cooperation; demonstrates an increase in the freezing, seizure, and confiscation of criminal proceeds, instrumentalities, and property of equivalent value; manages seized assets to preserve the value of seized goods until confiscation; and demonstrates implementation of targeted financial sanctions related to proliferation financing. Enhanced Customer Due Diligence Unlike other blacklisted countries, Myanmar is not applicable to countermeasures. Instead, the financial institutions of members and nonmember states of the FATF are urged to conduct “enhanced customer due diligence (CDD) measures” to mitigate the risk of money laundering, terrorist financing, and proliferation financing from Myanmar. Examples of these enhanced CDD measures to be applied to certain higher-risk activities include: Obtaining additional identifying information about the customer (available through public databases or internet sources) and regularly updating the identifying