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Contents The State-Owned Economic Enterprises Law 1989 Chapter IV Pages

4.1 The State-Owned Economic Enterprises Law 1989 4.1.1 Kinds of Economic Activity 4.3 Joint Venture between Government and Others 4.4 Procedures for Economic Enterprises 4.5 Prohibition 4.6 Right to carry out other Economic Enterprises 4.7 Right to Form Organizations 4.8 Penalties 1 2 4 6 9 11 11 15

Chapter IV The State-Owned Economic Enterprises Law 1989

4.1The State-Owned Economic Enterprises Law 1989 The State-owned Economic Enterprises Law was adopted in 1989. It contains 12 Sections. The law is provided to identify the areas of economic activities that shall be solely undertaken by the State.

This Law shall be called the State-owned Economic Enterprises Law.

Section - 2 of this law provides that the expression Government contained in this Law includes departments, Corporations and other organizations under the Government.

4.2 Kinds of Economic Activity

Under Section 3 of this law, the Government has the sole right to carry out the following economic enterprises as State owned economic enterprises:-

(a) extraction of teak and sale of the same in the country and abroad; ( )

(b)

cultivation and conservation of forest plantation with the exception of owned fire-wood plantation cultivated by the villagers for their

village-

personal use; ( )

(c)

exploration, extraction and sale of petroleum and natural gas and

production of products of the same; ()

(d)

exploration and extraction of pearls, jade and precious stones and

export of the same; ()

(e) breeding and production of fish and prawns in fisheries which have been reserved for research by the Government; ( )

(f)Postal and Telecommunications Service;

( )
(g) Air Transport Service and Railway Transport Service;

( )
(h) Banking Service and Insurance Service;

()
Broadcasting Service and Television Service;

( )
exploration and extraction of metals and export of the same;

( )

(k) Electricity Generating Services other than those permitted by law to private and Co-operative electricity generating services; ()

(l)

manufacture of products relating to security and defence which the

Government has, from time to time, prescribed by notifications.

( )

4.3 Joint Venture between Government and Others

According to Section 4, the Government may, by notification, permit in the interest of the Union of Myanmar any economic enterprise which is prescribed under section 3 to be operated solely by the Government to be carried out by joint venture between the Government and any other person or any other economic organization or under conditions by any person or any economic organization subject to conditions.

Under Paragraph 3 of procedures relating to permission to carry out economic enterprises defined under Section 3 of the State-owned economic enterprises law, the Government may, in the interests of the State, permit any enterprise which is prescribed under Section 3 of the State-owned Economic Enterprises Law to be carried out solely by the Government, in any of the following form;

(a)

Joint-Venture between the organization and citizen or a foreigner;

(b)

Joint-Venture between the organization, a citizen and a foreigner;

(c)

Joint-Venture between a citizen and a foreigner;

(d)

Enterprise by a citizen or a foreigner.

4.4 Procedures for Economic Enterprises

According to Paragraph 4 of this procedure, when any citizen or any foreigner applies to carry out any economic enterprise which is prescribed under Section 3 of the said law, the following procedures are required:-

(a)

Application shall be made in attached Form (A) to the State Economic Organization concerned;

( )

(b)

The organization shall submit the proposal to its ministry together with its

(c)

If the Ministry concerned considers the proposed enterprise submitted by the organization is not covered by the Union of Myanmar Foreign Investment Law and is also in the interests of the State, the ministry

concerned shall submit the following particulars together with explanations and its comments, to the Government:-

* Type of business to be carried out;

* Type of organization to be formed;

* Estimated amount of capital to be invested;

* Financial amount of capital to be invested;

* Duration to be carried out;

* Estimated income and expenses;

* Economic and social justification for the State;

* Condition to be prescribed.

(d)

If the proposal submitted by the organization is covered by the Union of Myanmar Foreign Investment Law, the ministry concerned shall obtain the approval of the Government.

(e)

If the proposal submitted under Sub-paragraph (c) and (d) is considered to be in the interests of the State, the Government or the Ministry authorised for this purpose may, by notification, permit it to be carried out, with appropriate conditions;

()

()

(f)

If the ministry concerned considers the proposal submitted by the organization to be not in the interests of the State or if the Government does not permit, the proposal may be rejected. Such rejection shall be communicated to the applicant.

4.5 Prohibition
The Government may, by notification, prohibit or prescribe conditions regarding the purchase, procurement, improvement, storage, possession, transport, sale and transfer of products derived from or produced by or used by economic enterprises which are prescribed under Section 3 to be carried out solely by the Government, in accordance with Section 5 of this law.

With regard to conditions and prohibitions, Paragraph 5 and 6 provide that, if it is required to prescribe conditions or to prohibit under Section 5 of this law with respect to the purchase, procurement, improvement, storage, possession,

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transport, sale and transfer of products derived from or produced by or used by economic enterprises which are prescribed under Section 3 of the law to be carried out solely by the Government, the Ministry concerned shall, in order to so prescribe or prohibit submit to the Government, mentioning fully the particulars and circumstances of the case. If the Government approves the submission contained in Paragraph 5, the Government or the Ministry authorized for this purpose may, by notification prescribe conditions or prohibition as are necessary.

4.6 Right to carry out other Economic Enterprises

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With regard to right to carrying out other Economic Enterprises, Section 6 states that any person shall have the right to carry out any economic enterprise other than those prescribed under Section 3 to be carried out solely by the Government.

Under Section 7 of this law without prejudice to the provision of Section 6, the Government may, in addition to those economic enterprises which are prescribed under Section 3 to be carried out solely by the Government, also carry out any other economic enterprise if it is considered necessary in the interest of the Union of Myanmar.

4.7 Right to Form Organizations

Right to form Organizations is provided in Section 8, (a) in order to carry out the economic enterprises mentioned in Section 3 and section 7, the Government may, by notification:-

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( )

(i) constitute organizations which are to undertake responsibility, and prescribe their duties and power;

( )

(ii)re-constiture, if necessary, such organizations which are in existance at the time of this Law, amend and prescribe their duties and powers;

( )

(b)

The respective organizations constitute under sub-section (a)

shall be a

body corporate having perpetual succession and a common seal, and shall have the right to sue and be sued in its corporate name.

( )

( )

In section 8-A ( a ), in order to contribute towards the development of State economy, to mitigate the expenditure from State finances and in the interests of the welfare of State employees, the Government may, by notification constitute any organization to enable economic enterprises to be carried out without subscribing from State finances but by causing investment to be made from the funds owned by the relevant employee's organization.

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( )

( b ) The notification issued under sub-section ( a ) shall include the following particulars : -

( 1 ) the types of economic enterprises permitted ;

( 2 ) the formation of an administrative body and the duties and powers thereof;

( 3 ) the formation of subordinate working bodies and the duties and powers thereof ;

( 4 ) capital investment and property ;

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( 5 ) financial matters ;

( 6 ) audit matters ;

( 7 ) other necessary particulars.

( c ) In order to supervise the function of the organization constituted under sub-section ( a ) powers shall be conferred on any organization formed under the relevant Ministry or any organization formed separately.

()

( )

( d ) The respective organizations constituted under Sub section ( a ) shall be a body corporate having perpetual succession and a common seal, and shall have the right to sue and be sued in its corporate name.

( )

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4.8 Penalties
9 and 10 give and penalties as follows: whoever is convicted of an offence of carrying out, without the permission of the Government, any economic enterprise prescribed under Section 3 to carried out solely by the Government shall be punished with imprisonment for a term which may extend to a period of 5 years and may also be liable to a fine. Furthermore, property both movable and immovable relating to the economic enterprise may be confiscated.

Whoever is convicted of an offence of violating an order or any condition notified under Section 4 or Section 5 shall be punished with imprisonment for a term which may extend to a period of 3 years and may also be liable to a fine.

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General provisions are given in Section 11 and 12, for the purpose of carrying out the provisions of this law, the Government may prescribe such procedures as may be necessary, and the respective Ministries may issue such orders and directives as may be necessary. The law conferring powers for Establishing the Socialist Economic System, 1965 was here by repealed.

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EEY TERMS Joint-Venture Petroleumnatural gas Pearls Air Transport Service Railway Transport Service Banking Service Insurance Service Broadcasting Service Television Service metals -

Exercise Questions

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1. What does contained in the press in Government in the State Owned economic enterprises Law 1989 include? 2. How many kinds of economic activity to be carried out by the state? 4.2 3. What are the forms of economic enterprises to be carried out soley by the government with permission of union government by notification? 4. Does are person shall have right to carry out any economic enterprise other than to be carried out solely by the Government? 4.7 5. Describe when does the right to form Organization of economic enterprise?4.8 6. Enumerate the economic activities in which private investment is restricted and reserved to be carried out solely by the State under the State-Owned Economic Enterprises Law.(Chapter 4)4.2 Explain the right to form organizations under the State-Owned Economic Enterprises Law.(Chapter 4)4.8

7.