Union Attorney General’s Office received EuroCham Advocacy Groups
EuroCham Myanmar met with the Deputy Attorney General, U Win Myint and the Director Generals, Daw Khin Cho Ohn and U Min Swe and Director, Dr. Kyi Kyi Than Aung. EuroCham was represented by the Executive Director, Mr. Filip Lauwerysen, the Head of Advocacy and EU Affairs, Mr. Marc de la Fouchardière, the Nay Pyi Taw Government Affairs Manager, Ms. Khin Soe Htaik and Legal Advocacy Group Co-Chair, Mr. Nishant Choudhary and Mr. Myo Win.
The co-chair Mr. Nishant Choudhary elaborated on the following points constraining European investors in their business development ambitions:
-The Section 228 of the Companies Law 2017 (“Companies Law”) grants right in favour of companies (foreign and Myanmar) to create mortgage and charge either directly or through a security agent, for securing the financial assistance undertaken by such company. Section 228 specifically states that such an act would not be deemed to be a breach of Transfer of Immovable Property Restrictions Law 1987 (“TIPRA”). However, section 464 states that provision of Companies Law as far as it related to foreign companies shall not affect the operation of TIPRA. The intention of the legislature is clear that 228 grants right to create security over any immovable property or rights arising out of such property, section 464 is restrictive for any transfer by way of conveyance etc. of any immovable property in relation to foreign companies. However, the drafting of the law creates ambiguity, especially since under Myanmar law mortgage is also a form of transfer. This ambiguity would create interpretational issues for authorities, while dealing with foreign companies.
-The Myanmar Registration Act. 1908 or related draft Registration Law (collectively “Registration Laws”) mandates registration of any instrument in respect to rights arising out of immovable property (like lease or mortgage). Without such registration, the instrument would not be admissible in a court of law as evidence and nor would the transfer created by such instrument would be affected. The despite the relevant provisions under the Registration Laws and no specific prohibition in this regard, the Office or Registrar of Deed (“ORD”) or the Land Records Department (“LRD”), as applicable, refuse to register any lease or mortgage involving foreign companies and foreigner lenders. This creates difficulties in effective security creation for any financing, which should be addressed as a policy matter.
The Deputy Attorney General highlighted the following:
-The section 228 of the Companies Law, is facilitating creation of mortgage or charge over right arising out immovable property (either directly or through security agent) in favour of any financial institution or other third party lenders. The section 464, is reaffirming that other provisions of TIPRA would still be applicable in case of foreign companies. The intention is to allow creation of security over rights arising out of immovable property for securing financing, while restricting any other form of transfer, say by way of conveyance. Deputy Attorney general duly noted the concerns of drafting of these two provisions and affirmed that Attorney General’s Office (“AGO”) would look into this issue.
-The concerns in respect to the difficulties faced by foreign companies in registering instrument with ORD and LRDs is duly noted and the AGO would look into this matter.