On 3 August 2018, the Ministry of Planning and Finance, Directorate of Investment and Company Administration (DICA) issued an announcement on the Anti-Corruption Code of Ethics for Companies and Body Corporates (the Announcement).
Jurisdiction
The Announcement applies to all companies and entities incorporated within the Republic of the Union of Myanmar, when they are dealing with ministries concerned or government organisations, and companies or organisation in the private sector.
Prohibited conduct – bribing
The prohibited activities are:
- making and offering, directly or indirectly, gift, entertainment and other preferential treatment;
- providing directly or indirectly, necessary assistance in travelling;
- conferring, directly or indirectly, a financial advantage to get a business opportunity;
- offering, directly and indirectly, charitable donations;
- conferring, directly and indirectly, political contributions; and
- providing, directly or indirectly, assistance to get employment in companies or organisations for personal interests.
The scope of the prohibited activities set out in the Announcement appears to very broad and of a general nature.
De Minimis
Pursuant to the President Office's Guidelines to Accepting Gifts effective from 4 April 2016 (the Guidelines), a single gift valued not more than 25,000 Kyats and multiple gifts of combined value not more than 100,000 Kyats per year can be accepted. For special occasions celebrated annually (e.g. Thadigyut present, Christmas), a gift valued not more than 100,000 Kyats can be accepted.
Receiving bribes
The activities expressly prohibited in the Announcement relates to the direct and indirect making, offering, providing and/or conferring of different forms of bribes. However, the Announcement did not address the receipt of bribes.
The act of receiving bribes is prohibited under the Guidelines. The Guidelines expressly prohibits public officials, government organisations and government employees from accepting any gift from a person or an organisation on account of their official positions. However, the Guidelines does set out situations where gifts may be received. In the event gifts are received in situations prohibited under the Guidelines, the consequences are as follows:
- the gift in question must be returned; or
- the recipient may compensate the equivalent of the value of the gift to the giver (i.e. provide reasonable consideration for the gift that is equivalent to market value); or
- the gift may be distributed to employees in the department where the gift is of perishable nature (fruits and flowers).
Moving forward
It is unclear, in deciding whether an activity falls within the broadly-worded scope of prohibited activities under the Announcement, whether there is a knowledge requirement (i.e. intent / mens rea element that the parties involved know or ought to have known objectively that their activities are corrupt).
It is also unclear if there is a presumption of bribery or when such presumption will arise.
Although not specifically written in the Announcement, it is likely that reasonable and bona fide expenditures may not fall within the scope of the prohibited activities.
The Anti-corruption Commission has powers of investigation. DICA may make a report / complain if it suspects that any company and corporate body has violated the code of ethics.
We can expect DICA to issue further notifications or announcements to clarify the above issues in near future, as well as clarification on the penalties and consequences of violation of the anti-corruption and anti-bribery laws in Myanmar.
Conclusion
The Announcement signifies Myanmar's move to join in the world's anti-corruption efforts. Despite its lack of clarity in specific areas highlighted above, the Announcement is a progressive step towards improving Myanmar's business climate.
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