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Mayanmar legal profile

Proelium Law LLP

LEGAL SYSTEM OVERVIEW

Myanmar has a unique legal system consisting of a combination of English common law, customary law and post-independence Burmese legislation. Article 198 of the Constitution affirms the Constitution as Myanmar’s supreme national law and states that laws inconsistent with it are effectively void. National legislation enacted by the Assembly of the Union is subsequent to the Constitution, followed by legislation enacted by the Regional and State Assemblies.[1] In the absence of statutory law, Myanmar’s general law is applied, which is based upon English common law and thus moulded by Burmese case law. The judiciary is hierarchical, with the Supreme Court of the Union at its apex, followed by the regional and state High Courts and district courts. The Constitutional Tribunal of the Union is separate and is responsible for interpreting the Constitution; its rulings are final and conclusive, as well as applied to all cases that relate to the ruling.[2]

Judicial independence is guaranteed by Article 19 of the Constitution.[3] Nevertheless, it is not autonomous. Judges are appointed and approved by the government, which may also decide which cases are brought to court, as it maintains oversight with the Myanmar Police forces which files court cases. The giving of bribes, payments and gifts to judges in exchange for favourable judicial rulings are common. Similarly, these corrupt practices exist across all political and economic sectors, including natural resources, public procurement and the security apparatus.[4] Anti-corruption legislation exists, but enforcement remains poor and anti-corruption institutions are largely chaired by former-military officers or members of the ruling party. As such, impunity is widespread.[5]

A number of Myanmar’s laws originate from the British Burma Code. Contract law is governed by the Contract Act 1872, although judicial interpretations have also shaped contract law.[6] There are a number of further major commercial laws which include: the Myanmar Companies Law 2017, which has modernised regulatory frameworks regarding companies and seeks to build an attractive investment climate, as does the Myanmar Investment Law; the Private Industrial Enterprise Act meanwhile regulates entrepreneurship in industrial activities as well as the rights and duties of the entrepreneur.[7] The since updated 1861 Penal Code is the primary criminal law in Myanmar and define a range of crimes and punishments, including forms of corruption; the Anti-Corruption Law further builds upon the Penal Code and together they cover most forms of bribery in the public sector.[8] Also, the Electronic Transactions Law effectively criminalises political activism online and mandates fines or prison for acts deemed detrimental to state security, national culture and the economy.

Myanmar has a signatory to several international treaties and agreements. These include the Framework Convention on Climate Change, the Geneva Conventions and the Covenant on Economic, Social and Cultural rights. Myanmar is also a member of a number of international organisations including the Association of Southeast Asian Nations, World Trade Organisation and World Health Organisation. Myanmar has repeatedly faced criticism for systematic human rights violations, most recently over the Rohingya crisis which has also seen accusations of genocide levelled against the country.

BUSINESS OVERVIEW

The Myanmar economy has benefitted from the democratic transition, and economic growth is set to remain amongst the highest in the region. Nevertheless, inflation will remain high, at around 6.5% owing to expansionary policies.[9] The economy remains undiversified and underdeveloped whilst agriculture forms a large part of the economy, as well as employing up to 70% of the population. The export economy is similarly undeveloped, with petroleum gas, foodstuffs and textiles forming around 75% of export earnings.[10] Myanmar is ranked 171 of 190 in the World Bank’s 2017 Ease of Doing Business Index and 155 of 190 in their Ease of Starting a Business Index.[11] Indeed there are major obstacles to doing business or investing in Myanmar. These include an unskilled workforce, an underdeveloped banking sector, poor communication and transport infrastructures, limited energy infrastructure and the weak rule of law, as well as endemic corruption.[12]

Nevertheless, the economy is continuing to open up to foreign investment, and the strategic position of Myanmar, between the world’s two largest markets, India and China, means that the country has huge potential. Indeed, it has been theorised that Myanmar’s GDP could quadruple by 2030.[13] Therefore, opportunities exist in almost every sector including infrastructure, transportation, communications, tourism, agriculture, energy, healthcare, mining, and franchising. In particular, Myanmar has significant oil and gas reserves which have not been fully exploited nor explored, as there are believed to be large unproven reserves. Expertise in energy logistics and insurance are in high demand.[14] Similarly, large mineral resources such as precious metals and stones can be found in Myanmar, which accounts for 90% of global jade and ruby production. As such, there is high demand for heavy equipment, mining and refining technology.[15] Myanmar has also allocated $26.8 billion to the development of transport infrastructure until 2030 and is encouraging foreigners to purchase land in Myanmar, which has helped drive a construction boom; the high demand for construction materials, project planning and machinery all represent opportunities. It is highly likely that China will also continue to fund infrastructure projects in Myanmar in the near future, as part of their One Belt One Road Initiative.[16]

 COUNTRY OVERVIEW

The Union of Myanmar, or Burma, is situated in southeast Asia, bordering Bangladesh, India, China, Laos and Thailand. Myanmar has a population of 55.12 million with the largest metropole being the former capital, Yangon, with a population of 4.8 million inhabitants. The current capital is Naypyidaw which contains 1.03 million people. Burmese is the official language and the language of the largest ethnic group, the Bamar, although minority groups also have their own languages, such as Shan and Rakhine/Arakanese. The population is predominantly Buddhist, with small Christian, Muslim and Animist minorities.[17]

Myanmar is a very high-risk country with regards to its business climate and political-economic situation. There are severe economic shortcomings as well as extreme ethnic tensions between the Bamar majority and ethnic minorities.[18] Corruption is endemic in Myanmar and corrupt practices are rooted in the public and private sectors. As such, Myanmar is ranked 130 of 180 in Transparency International’s 2017 Corruption Index.[19]

Myanmar’s GDP is measured at US$66.97 billion and is forecast to expand to over US$111 billion by 2022. Real GDP growth is currently 7.2% and is expected to remain steady at around 7.5% over 2018-2022.[20] The official currency is the Burmese Kyat. Myanmar is a parliamentary republic, but one in which the military holds great power. The executive branch is headed by the President and State Counsellor, a role akin to Prime Minister. Win Myint is currently the elected President, whilst State Counsellor Aung San Suu Kyi also acts as Minister of Foreign Affairs. The legislative branch consists of the bicameral Assembly of the Union, which is formed by the House of Nationalities and House of Representatives. Members serve five-year terms, with the next elections scheduled for 2020, and 75% of the Assembly’s members are directly elected in single seat constituencies by majority vote. The remaining 25% of members are directly appointed by the military, which gives them an effective veto over any potential constitutional amendment.[21]

Report Footnotes

[1] https://www.constituteproject.org/constitution/Myanmar_2008.pdf?lang=en.

[2] http://www.nyulawglobal.org/globalex/Myanmar1.html#2s8eyo1; https://www.state.gov/e/eb/rls/othr/ics/investmentclimatestatements/index.htm?year=2017&dlid=269803#wrapper.

[3] https://www.constituteproject.org/constitution/Myanmar_2008.pdf?lang=en.

[4] https://www.business-anti-corruption.com/country-profiles/myanmar.

[5] https://www.bti-project.org/fileadmin/files/BTI/Downloads/Reports/2016/pdf/BTI_2016_Myanmar.pdf.

[6] https://www.law.ox.ac.uk/sites/files/oxlaw/briggsburrowsbook_-_thelawofcontractinmyanmar.pdf.

[7] https://www.dica.gov.mm/sites/dica.gov.mm/files/document-files/mcl_english_version_june_2017_abc_comments_clean.pdf; http://www.myanmartradeportal.gov.mm/kcfinder/upload/files/Myanmar%20Investment%20Law_English.pdf; http://www.burmalibrary.org/docs15/1990-SLORC_Law1990-22-Private_Industrial_Enterprise_Law-en.pdf.

[8]http://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=61342&p_country=MMR&p_count=110&p_classification=01.04&p_classcount=9.

[9] http://www.imf.org/external/datamapper/PCPIPCH@WEO/MMR.

[10] https://atlas.media.mit.edu/en/profile/country/mmr/.

[11] http://www.doingbusiness.org/Rankings.

[12] https://www.export.gov/article?id=Burma-market-challenges.

[13] https://www.gov.uk/government/publications/exporting-to-burma/doing-business-in-burma-burma-trade-and-export-guide#growth-potential.

[14] https://www.export.gov/article?id=Burma-energy-oil-and-gas.

[15] https://www.export.gov/article?id=Burma-mining-and-minerals.

[16] https://www.export.gov/article?id=Burma-construction-and-design.

[17] https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html.

[18] https://globaledge.msu.edu/countries/burma/risk.

[19] https://www.transparency.org/news/feature/corruption_perceptions_index_2017.

[20] http://www.imf.org/external/datamapper/NGDPD@WEO/MMR; http://www.imf.org/external/datamapper/NGDP_RPCH@WEO/MMR.

[21] https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html.

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