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Myanmar: Declaration of A One Year State of Emergency Effective 1 February 2021

From our friends at Baker McKenzie in Myanmar we have received the following notice describing the consequence of the State of Emergency

In brief

In the early morning of 1 February 2021, the Tatmadaw, Myanmar’s military forces, detained State Counsellor Daw Aung San Suu Kyi, President U Win Myint, leaders of the ruling party National League for Democracy, some Members of Parliament and several other prominent civilians. Subsequently, Order No. 1/2021 was issued under the authority of the President’s Office by Vice President U Myint Swe (in his newly stated capacity as President Pro Tem) declaring a state of emergency under the Constitution and the transfer of the legislative, executive and judicial powers to the Commander-in-Chief of the Defence Services (“CIC”) for the period of one year from 1 February 2021.

This client alert discusses the effects of a state of emergency under the Constitution on existing businesses and potential investors.

Key takeaways
Under the Constitution, following the declaration of a state of emergency, all legislative functions performed by the Houses of Parliament are suspended from the date of declaration of the emergency. The CIC is then vested with powers to exercise the powers of the legislature, executive and judiciary during the state of emergency.

The Office of the CIC has issued an Announcement No. 1/2021 listing the tasks to be completed during the state of emergency. The announcement states that fresh general elections will be held and the responsibilities of leading the country will be transferred to the new government formed by the winning party.

As the situation remains very fluid, businesses are encouraged to monitor any announcements by the CIC on a regular basis and monitor the impact, if any, on their operations in Myanmar.

It is noteworthy that all laws, rules and regulations in force immediately prior to the declaration of the state of emergency continue to be valid and effective unless and until amended by the CIC’s exercise of legislative powers.

The declaration of a state of emergency
Under Order No. 1/2021, the President Pro-Tem stated that the failure of the Union Election Commission (UEC) to ensure free, fair and transparent general elections in November 2020 had led to the loss of sovereignty and national solidarity among the various ethnic groups in Myanmar. This led to the exercise of the powers under Article 417 of the Constitution to declare a state of emergency in the country for a period of one year from 1 February 2021. As a result, the CIC has the right to exercise the powers of legislature, executive and judiciary. Specifically, he may exercise the legislative powers either by himself or by a body including him. He could also appoint an appropriate body or a suitable person to exercise the executive and judicial powers.

Under Announcement No. 1/2021, the CIC listed the following tasks to be completed during the state of emergency:

  1. the reform of the UEC, which shall carry out necessary measures to address the purported irregularities in the general elections including verifying the voter lists in accordance with law;
  2. ensuring that preventative and ameliorative measures are taken to address the COVID-19 pandemic without interruption;
  3. remedying the adverse impact on the economy and businesses caused by the pandemic; and
  4. the implementation of the provisions under the Nationwide Ceasefire Agreement to ensure peace in the country.

The CIC indicated that upon the completion of the above-mentioned tasks, fresh general elections will be held and the responsibilities of leading the country will be transferred to the new government formed by the winning party.

It also bears highlighting that the National Defence and Security Council may, upon the CIC’s request, permit two extensions of the duration of the state of emergency with a term of six months per extension.

Since the declaration of a state of emergency, the CIC has issued subsequent orders that enable the existing judges across all levels of the courts (including the Supreme Court which is the apex court in the country) to continue with their judicial functions. It has also been reported that the CIC has appointed 11 new ministers to perform the executive powers during the state of emergency.

These measures appear to provide, at this critical juncture of Myanmar’s political journey, some positive indications that the CIC intends for businesses to – as much as possible – go about their affairs as usual despite the political uncertainty.

Conclusion
The situation in Myanmar remains fluid and we will continue to issue updates on the political and legal developments in the country. Businesses are encouraged to monitor any announcements by the CIC on a regular basis and monitor the impact, if any, on their operations in Myanmar.

Feel free to contact Andre Gan, Managing Partner or Kenneth See at Baker McKenzie in Yangon for further details.