ASEAN Regulatory Brief: New Shipment Inspection in the Philippines, Regulatory Shifts in Thailand, and Dollar Restrictions in Myanmar

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In this edition of ASEAN Regulatory Brief, ASEAN Briefing covers opposition by shippers in the Philippines to new inspection regulations, the splitting of the Thai aviation authority, and restrictions on the use of dollars in Myanmar’s tourism sector.

Philippines: Business Bodies, Exporters against Proposed pre-Shipment Inspection

Several business bodies including the Philippine Chamber of Commerce and Industry (PCCI) and exporters are against a proposed legislation which mandates inspection by a third-party inspector prior to export to the Philippines. The groups have instead urged the government to adopt trade-facilitating mechanisms instead of the pre-shipping inspection (PSI) to fight smuggling and protect import revenues.

Export groups have further stated that the implementation of the PSI scheme will add to further delays and costs, particularly in Manila.

The PCCI has further stated that such restrictions add a hurdle to the ease of doing business. Instead the group wants a risk management system, which allows the customs department to fast track low risk imports as well as the modernization of customs administration. In addition, it also argues that the PSI system has been discontinued in developed countries and is applied only in less-developed countries. The Philippine Exporters Confederation, Inc (PHILEXPORT) had suggested that the PIS can be implemented on a voluntary basis. It is unclear, if the PIS will be implemented; however opposition to the legislation remains strong, which may just urge the government to abandon the idea.

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Thailand: Government to Split Aviation Authority to Address Aviation Shortcomings

 The government will split the country’s Department of Civil Aviation (DCA) into two separate agencies in a bid to address concerns raised by the International Civil Aviation Organization (ICAO) over the conflict in allowing the DCA to license airlines while also operating airports. The changes are expected to be implemented in the coming months. The Thai cabinet has approved four proposed laws that will replace the DCA with two new authorities. Under the new arrangement the Office of Civil Aviation will act as a regulator while the Airport Department, will operate DCA’s 28 provincial airports.

Meanwhile, US authorities are on a three day visit since 26 October to inspect progress made in the country’s aviation safety standards. The US’ Federal Aviation Administration (FAA) in July gave Thai aviation authorities until October to take corrective measures to improve aviation standards or else face a downgrade. The shortcomings included a shortage of staff qualified to carry out inspections of airline air safety measures. Thai authorities have stated that they have rectified 35 problem areas identified by the US regulator. If there is a downgrade, Thai registered carriers will be barred from entering the US. Earlier in March, China, Japan and South Korea stopped Thai based carriers from operating charters and new routes because of safety concerns raised during an international audit.

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Myanmar Limits use of US Dollar; Expected to Affect Tourist Industry

The country’s central bank issued a statement restricting the use of US dollars in a bid to stabilize the domestic currency, the kyat. The central bank has given several businesses, including hotels, restaurants and golf clubs until 30 November to stop charging customers in US dollars. Such businesses will be required to return their foreign-exchange licenses and will not be able to trade in dollars. However, official moneychangers and banks are exempt from the restriction.

Experts have stated that the dollar, which is widely used in the tourist industry, is in great demand and has led to the depreciation of the kyat. The kyat has depreciated between 20-25 percent since the beginning of the year. The current exchange rate is about 1,200 kyat to the dollar, which means that business travelers and tourists will be required to carry large amounts of cash to make purchases. The bank has further stated that it intends the use to promote the use of the kyat and hopes to cut down the use of cash by using domestic debit cards, credits cards, internal payment cards and an online payment system.


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