Vice Chairman of State Administration Council Deputy Prime Minister Vice-Senior General Soe Win addresses Illegal Trade Eradication Steering Committee Work Coordination Meeting (4/2024)
NAY PYI TAW October 9
The Illegal Trade Eradication Steering Committee Work Coordination Meeting (4/2024) was held at the conference hall of the Ministry of Commerce in Nay Pyi Taw this morning and Chairman of the Steering Committee Vice- Chairman of the State Administration Council Deputy Prime Minister Vice- Senior General Soe Win delivered an address at the meeting.
Also present at the meeting were union ministers U Win Shein and U Tun Ohn, deputy ministers, the chairman of the Revenue Appellate Tribunal, members of the Nay Pyi Taw Council, permanent secretaries, director generals, chairmen of associations and responsible officials while chairmen of region and state special committees for eradication of illegal trade joined
the meeting through video conferencing.
First, the Vice-Senior General delivered an address, saying one of the main responsibilities of the steering committee and regional and state special committees at different levels is to relentlessly prevent illegal trade that delays and hinders the economic development of the country and undermines the competitiveness and abilities of domestic entrepreneurs who are carrying out manufacturing industries. Only then, can export and trade sectors gain growth, thus accelerating the domestic money circulation and eventually boosting export, which will facilitate foreign exchange flows
and contribute to the development of manufacturing, trade and service sectors of the country.
Therefore, our responsibilities and duties are enormous and illicit trade must be prevented without fail.
As Myanmar is abundant in natural resources and an agriculture-based country, it is necessary to encourage manufacturing products from natural resources and agricultural produce in exerting efforts for economic development while energetically promoting MSMEs, which are being implemented under government projects to boost productions and to manufacture new export items.
In exerting efforts for the development of the trade sector in accordance with the economic objectives of the State, illicit trade hinders the economic development of the country and negatively impacts the socioeconomic sector enormously.
The steering committee was formed to effectively eradicate illicit trade and work coordination meetings have been held 16 times. A total of 523 decisions have been made until the 15th meeting and action was taken against 14,659 cases roughly worth Ks- 300.028 billion during the two years and eight months period from January, 2022 to January, 2024. Compared with the trade sector of the country, the amount was not much. Emphasis must be placed on taking more action against illicit trade.
In July and August, 2024, the Customs Department made the largest number of arrests and confiscations and Mandalay Region saw the largest number of arrests and convictions, followed by Sagaing Region and Kachin State at the second and third places respectively.
In terms of goods categories, the number of seizures of unlicensed vehicles and freight trucks that transported illicit goods made up the largest number, followed by raw materials for production and investment materials at the second and third places respectively.
The World Trade Organization is closely monitoring the danger of illicit trade and helping member countries to cooperate by applying provisions of trade facilitation agreements, customs agreements, agreements on technical hurdles and copyright agreements related to trade to control sucd activities. According to findings of the World Economic Forum, illicit trade made up between five and 15 percent of the GDP of the world and was likely to have serious negative impacts on the world economy.
According to a report of the Transnational Alliance to Combat Illict Trade, the increase in online trading of small percals as illegal trade, online purchases, online markets and e-Commerce Platforms significantly raised the volume of illegal trade.
Moreover, although Free Trade Zones (FTZs) are established as special zones to boost legal trade and to attract foreign investments and allowed to conduct free trade, they are areas of serious concerns for illicit trade, according to the report. In Thilawa Special Economic Zone, some FDIs carry
out manufacturing as a front for importing cheap finished products from other countries by taking advantage of permissions to manufacture and distribute goods locally. it is necessary to combat illicit trade which flouts permissions to conduct legal trade. Cautious measures must be taken to prevent suchproblems in other FEZs under implementation and local industrial zones.
It has been found that no country in the world has been able to completely eradicate illegal trade, and countries are individually taking separate measures to prevent the trade of drugs, arms, and money laundering.
If countries cooperate and take joint action, those who comply with the rules may face delays, and it could also lead to difficulties in competing with other nations and markets.
For the country’s economic growth, it is essential to develop the manufacturing and trade sectors. To achieve this, industries based on agriculture and livestock farming must be encouraged.
The ministries assigned by the government are required to fully carry out the goals and responsibilities given to them in order to meet the basic needs of agricultural and livestock businesses. This includes ensuring the timely supply of fertilizers, pesticides, seeds, animal feed, and vaccines to farmers, based on seasonal requirements.
On the other hand, relevant organizations must also strictly prevent the transportation and mixing of unnecessary goods and unauthorized multiple shipments.
Additionally, if illegal goods are brought into the country through border smuggling, it could introduce foreign diseases that could infect domestic Vice Chairman of State Administration Council Deputy Prime Minister Vice-Senior General Soe Win addresses Illegal Trade Eradication Steering Committee Work Coordination Meeting (4/2024) agricultural and livestock industries, leading to significant losses. Moreover, illegal medical products and beauty products could pose health risks, while counterfeit household electrical products that do not meet quality standards could cause fire hazards.
The import of illegal goods without paying taxes and without meeting standards and quality requirements strengthens the black market, leads to the manipulation of exchange rates by traders, and harms the stability of domestic prices. The increasing strength of illegal trade undermines the stability of the domestic market, affecting the prices of goods.
The long-term effect of illegal imports is that legal businesses may not be able to compete on prices in the local market, causing them to lose their market share. Over time, these legitimate businesses may find it difficult to sustain themselves, reducing their ability to grow, and some may lose their motivation to expand further. Ultimately, domestic production industries could come to a halt. If the country’s industries are unable to thrive, it would negatively affect the economic policies of the nation, leading to a decline in
production, trade, and exportimport activities.
One of the major challenges leading to the rise of illegal trade is the lack of security measuresin certain border areas, weaknesses in legal frameworks, insufficient personnel involved in combating illegal trade, and corruption. These factors pose significant challenges to efforts to eliminate illegal trade, and steps must be taken to mitigate them as much as possible.
Moreover, due to the country’s need to reduce foreign currency usage and limit imports, some domestic needs are being met through illegal imports during this time. Effective measures must be taken to curb this, or else the country may lose tax revenue, and illegal trade could expand, potentially sustaining armed insurgent groups. Therefore, the fight against illegal trade must be viewed as a national responsibility.
In each state and region, special units combating illegal trade must manage inspections at checkpoints to avoid unnecessary expenses and delays. It is necessary to effectively take preventative and control measures to ensure that there is no illegal extraction of the country’s resources.
They must also carry out systematic inspections along illegal routes and ensure that smuggling does not occur at unavoidable checkpoints. Furthermore, there must be stricter inspections of storage facilities and markets within the country to ensure no illegal trade takes place, and the illegal extraction of natural resources must also be effectively controlled.
Officials involved in combating illegal trade must fulfill their duties with integrity for the benefit of the country. Senior officials must lead by example and ensure that their subordinates are continuously monitored and supervised.
Intelligence is crucial in effectively preventing illegal trade.
During July and August 2024, 97 pieces of information were received, resulting in 91 verified reports, 3 false reports, and 3 delayed reports. The increase in accurate information has significantly contributed to the success of our operations. Our steering committee also recognizes those who provide accurate information and ensures timely reward payments according to set standards. As a result of these reports, 117 cases were successfully prosecuted, and illegal goods worth Ks-2,140.951 million were seized, including various timber, industrial goods, food products, and illegal vehicles.
Just as those who are engaged in illegal trade use a variety of methods, as well as those who prevent them, either according to procedures or investigations, to manage and prevent any weak spots. During this period, there have been five reports and the informant has been awarded a reward of about Ks-2 billion according to a certain percentage.
If we look and compare at the arrests of July and August in 2024, it is found that the arrests in August increased more. Being able to carry out illegal trade more effectively requires the supervision and control of special teams to combat illegal trade and due to the efforts of the Customs Department and OSS departments as well as the strong cooperation between relevant departments and organizations.
It is also necessary for the special teams and departments to follow the directives of the steering committee in a timely manner.
In carrying out anti-illegal trade operations, in addition to effective arrest, corruption-free environment and making legal trade fast and smooth, the main goal is to reduce illegal trade and to have access to legitimate trade routes. It is also necessary to continuously carry out awareness activities in order to make the public aware of the negative effects of illegal trade.
The SAC Vice Chairman urged to promote stronger cooperation between region and state special teams and relevant departments to effectively prevent and take action against the illegal production of local resources, to be free from bribery for employees in the fight against illegal trade, to have safety awareness and security precautions while working and to effectively prevent and enforce anti-illegal trade activities to combat illegal trade.
Then U Min Min, Deputy Minister for Commerce and Secretary of the Anti-Illegal Trade Steering Committee, made a clear presentation on the decisions
of the Steering Committee meeting (3/2024) and the operations of the Steering Committee.
After that, Director General U Aung Thwin Oo, the leader of the steering committee’s office task force, Director General U Thint Myat Thu of Transportation Planning Department, Director General U Han Win Aung of the Central Equipment Statistics and Inspection Department, Director General U Thein Swe of the Customs Department, Director General U Myint Thura of the Department of Trade, and the Deputy Director General of the Department of Food and Drug Administration read and presented the orders submitted to the Anti-Illegal Trade Steering Committee Work Coordination Meeting (4/2024).
Vice Chairman of the Steering Committee Union Minister U Win Shein, Union Minister U Tun Ohn, member of the steering committee, Deputy Minister for Defence, Member of Nay Pyi Taw Council, the chairmen and officials of the special groups to combat illegal trade in the regions and states reviewed findings on illegal trade, and discussed situations in which drugs, controlled chemicals, illegal timber, vehicles, fuel oils, food are being seized and taking action, prevention issues, export and import comparisons and commodity flow conditions at trading stations.
After that, it was reported the Chairman of the Anti-Illegal Trade Steering Committee, the Vice Chairman of the State Administration Council, and the Deputy Prime Minister coordinated the presentations and concluded the meeting.