Myanmar Food and Drug Administration
HARMONIZED SYSTEM CLASSIFICATION
FOR LOW RISK PRODUCT
8 February 2018
Status Report
Technical Assistance of
the World Bank Group
in Partnership with
Prepared by
Brian Thomas, Consultant
Sjamsu Rahardja, Senior Economist
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Status Report on Myanmar Food and Drug Administration
Background
The Food and Drug Administration (FDA) is the Myanmar authority tasked to ensure the safety of
drug and processed food in Myanmar. Over the last decade the imports of food by Myanmar has
risen manifold leading to FDA being severely challenged by the increased workload, caused both by
the increased volume of food imported, together with the import of many new food products.
The large increase of Myanmar Origins of imported foodstuff in Myanmar
import of foodstuff (food and RoW Aus. & NZ China
beverages, prepared or semi- EU15
9.3% 1.1% 4.0%
0.9%
prepared, for home or industry Korea
consumption) is a good example of India 0.3%
the significant increase in demand 17.6%
US
for FDA services. Value of imported 1.1%
processed foodstuff and beverage
ASEAN
topped $2.8 billion in 2016, 65.7%
increased about 169 percent since
20101. In that year, the most of
processed food are sourced from
Source: UN Comtrade database
ASEAN countries, particularly
Malaysia, Indonesia, Singapore and Thailand. Share of import of foodstuff from India is coming
second at 17.6 percent.
With increased demand for trade in food related products, Myanmar FDA is initiating changes in its
operating procedures. With the support of Asian Development Bank (ADB), it is currently developing
procedures to categorize risks of imported products that require FDA certificates. It is also reviewing
its internal proces to ensure certificates can be issued in a timely manner. In this regard, the World
Bank Group is teaming up with ADB team to support FDA in developing Harmonized System (HS)
classification on products that are categorized as low risk. Such work can help FDA to coordinate
better wtih Myanmar Customs Department which has to implement such policy at the border.
Current Procedures
Currently the import procedure for food in Myanmar is cumbersome and out of line with similar
processes in other countries. To manage risk associated with imported food, traders must undertake
the following process to get licenses and certificates:
The importer must first obtain a Letter of Recommendation from FDA.
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Using mirror data reported by exporters.
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The importer uses the letter of recommendation to obtain an Import License/Permit from the
Ministry of Commerce (MOC).
The Import Permit allows Customs to issue clearance of the imported consignment of food and
put it under seal at the importer’s premises.
Finally, the food importer must obtain an Import Health Certificate from FDA allowing Customs
to release the goods to the market.
Thus, FDA applies a two step procedure issuing both Import Recommendations and Import Health
Certificates, both of which require laboratory testing.
First on a sample of the food product to be imported.
Then on the food consignment when it arrives at the border.
These two steps are required for all foods. These procedures inflict unnecessary costs on importers
and consumers, and prevents FDA from utilizing its resources more effectively to tackle the most
hazardous products.
Future Procedures
FDA intends to shift food safety management towards a risk based approach. As such FDA is
developing a list of goods that it considers to be of risk to Myanmar.
In particular FDA is in the process of categorizing food products with respect to what it considers low
risk, and will seek to introduce a risk based approach, based on a list of these goods. FDA will
interact with Myanmar Customs to facilitate the importation of these goods based on risk
assessment.
A previously developed list that excempted certain products from the import recommendation
requirement has been difficult for Myanmar Customs to work with as the list was not developed in a
way that Customs could readily identify.
FDA is currently undertaking an Asia Development Bank (ADB) financed regional project to develop
its risk management program in a way that will establish a method by which FDA can improve its
collaboration with Customs. To achieve this FDA will classify the food lists in accordance with the
Myanmar Customs Tariff, which is based on the international customs classification system called
the Harmonized System (HS). Use of the HS will enable Customs to identify goods that FDA considers
a risk.
At present, FDA priority is to identify and classify goods that it considers low risk. It is considered
that the adoption of the risk assessment list will reduce the current need for Letters of
Recommendation.
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Status of Project
As at 31 December 2017, consulant (Mr Brian Thomas) had completed the following tasks.
Task 1
This was to classify the products that FDA considers to be low risk. On 16 November 2017, two lists
of products were obtained from ADB. The lists depict high, medium and low risk products.
The consultant classified the low risk products in accordance with the HS, however the following is
to be noted:
• The HS is a 6-figure classification system that is used by nearly all countries.
• Most national customs administrations make use of an eight figure tariff classification
system, with the 7th and 8th figures being used to satisfy any domestic requirements for
products that are not specifically listed within the HS.
• Myanmar is a member of the ASEAN regional group and as such incorporates the ASEAN
product data base within its 7th and 8th figure classifications. The addition of the ASEAN
product data base extends the number of classifications within the Myanmar tariff from
some 5,000 (HS classifications) to about 13,000.
• As FDA is only concerned with food products, the consultant is concerned with the product
descriptions that are listed within those chapters that cover food products only, that is
chapters 1 to 24.
• Many of the products listed are described in general terms. This has implications for the
classification process.
o In some instances, the classification of particular goods may be narrowed down to a
single HS 6-figure classification number, thereby resulting in a relatively
straightforward classification.
o However, due to the addition of the ASEAN product data base, there are many
instances where the HS 6-figure classification number is subdivided into many more
subdivisions (or subheadings) at the 7th and 8th digit level. These need to be
examined in order to complete the classification process.
o To take an extreme case, subheading 2106.90 is the HS subheading for food
preparations that are not covered by any other HS classification. The ASEAN product
data base (Myanmar tariff) further subdivides this into some 30 additional
subheadings.
• Where instances of the above occur, and the product description is in general terms, the
consultant has listed all the 7th and 8th figure subheadings he considers may be applicable.
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• As the classification list is for risk assessment purposes, the consultant has also considered
alternate classifications that the importer may put on their import documentation. Failure to
do this may result in products escaping detection, should the importer’s incorrect
classification not be detected.
• Initially there were a small number of products for which the classification had not been
determined. The consultant would seek additional information for these.
• The consultant passed on what had been completed to FDA during his mission to Myanmar.
Task 2
This was to undertake the first mission to Myanmar to consult with the FDA, GIZ, MOC, and
Myanmar Customs. This was undertaken during the week beginning Monday 11 December 2017.
The consultant undertook Task 2 in company with Mr Rahardja, who is stationed in Yangon.
GIZ
On 11 December the team (consultant and WB senior economist) met with officers of The Deutsche
Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH or, as it’s commonly referred to, GIZ.
One of its projects in Myanmar is providing technical assistance to Myanmar Customs.
Of interest to this project is GIZ’s arranging for HS Tariff classification training for both Myanmar
Customs officers, and officers of related government departments. The training is being delivered by
an ex World Customs Organisation officer. A number of training courses have been delivered in
2017, and it appears that HS training will continue to be provided in 2018.
MOC
On 12 December the team met with officers of MOC in Nay Pyi Taw to discuss the procedures by
which importers obtained import permits. We obtained or confirmed the following information:
• MOC receives a recommendation from FDA about a particular product.
• MOC classifies the product according to the Myanmar tariff and sends a copy of the product
details and its classification to Myanmar Customs, however Customs may over-ride the
classification.
• MOC makes use of its laboratories in both Nay Pyi Taw and Yangon.
• MOC is the authority that issues the Import Permit. Permits may be issued from Yangon, Nay
Pyi Taw, or from any of the MOC border posts.
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• The permits are valid for 12 months, but importer may apply for a 12 month extension. In
almost all instances, extensions are granted.
• At this stage MOC is only interested in FDA Letters of Recommendation on low risk products.
A process for high and medium risk products may be developed at a future date.
• FDA computer does not connect to MOC computer.
• MOC may also liaise with Department of Agriculture, when necessary - for primary
foodsfuffs or livestock.
• MOC receives tariff classification training, which is also arranged by GIZ.
FDA
On 13 December the team met Task 2’s prime objective, in meeting with officers of FDA, to discuss
the product list. During the meeting the consultant conducted an introductory presentation on the
HS, which induded the following:
• What the international classification system is – together with a little background.
• How the international classification system is structured / set out.
• How the Myanmar tariff is derived - how it incorporates the ASEAN regional data base.
• How the classification process operates - the classification rules.
9 FDA officers were involved. All were very engaged during meeting and presentation.
During the presentation, the consultant discussed the list of low risk products, that he had classified.
The consultant indicated there were some areas where he needed clarification as to what the goods
were.
FDA officers indicated that they required more formal HS training, which specifically targeted their
areas of concern, that being the products of Chapter 1 - 24.
FDA officers also gave the consultant a list of high, medium and low risk food items. Although this list
contains a number of the products that are set out in the lists obtained on 16 November, it does
describe some products that were not previously mentioned. The consultant will compare this list
with that obtained from ADB and provide classifications for those low risk products not already
covered.
FDA officers also suggested that staff from Medicine and Drugs also need to have some exposure to
this topic. They indicated that anything swallowed or put on the skin needs a certificate.
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The consultant also met with the Director (Food Safety), Dr. Tun Zaw during the session. Dr. Tun Zaw
indicated:
• He was concerned about the interaction between FDA, MOC and Myanmar Customs in
respect to the treatment of the low risk products that are imported into Myanmar.
• He was very keen to see that his officers were proficient in HS classification (or at the very
least, have experience with the HS) and he was pleased about the meeting and the
presentation.
• He hoped the presentation would be followed up with a more formal training course. He
was convinced that there is a demand for further capacity building on HS classification.
• He would be changing work position at the end of 2017, and he was concerned that the
program might therefore not progress as fast as he had hoped. Nevertheless, he expressed
gratitude that the World bank was driving the proposed new system.
Myanmar Customs and JICA
On 14 December the team met with officers of both the Myanmar Customs Department and Japan
International Cooperation Agency (JICA) in Yangon. JICA is a governmental agency that coordinates
official development assistance for the government of Japan. JICA is chartered with assisting
economic and social growth in developing countries.
JICA is involved in the development of information technology services within Myanmar Customs. In
particular, JICA has developed the Myanmar Automated Cargo Clearance System (MACSS). JICA
officers were unsure of how the FDA products that are subject to risk assessment and accompanying
classification information are transferred to Myanmar Customs. JICA were also unsure of the role
played by the Myanmar Customs HS unit.
A subsequent meeting with the HS unit revealed they were aware of the FDA risk assessment
program. They confirmed that FDA does not have the capacity to classify goods in accordance with
the HS. They also confirmed that Customs collects information from its field officers and, together
with a knowledge of the past experiences of FDA practices, determines the list of products that
Customs considers must have certificates or be subject to some sort of FDA control.
The HS unit indicated that they examine the classification of the risk products and amend where
they do not agree with the classifications that are submitted by FDA. Once Customs are satisfied
with the HS classification, Customs input them into the MACSS database.
At this point in time, having spoken to all that were available for comment, both Mr Rahardja and
the consultant are of the opinion that there is a disconnected view between Customs and FDA on
the scope of products requiring Import Health Certificates. Also, it seems that overall, there is some
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overlap between the practices that are conducted by FDA, MOC and Customs, and that
communication between Customs and FDA is minimal. More communication between FDA and
Customs (and MOC) and the capacity for FDA to, at least, be more precise in defining their list of
products according to HS, is needed.
Current Status of Project
The consultant has examined the lists from ADB (received 16 November) and FDA (received 13
December) and has finalised the classification of the all the products therein that are deemed to be
of low risk to Myanmar. The consultant has combined the three product lists into one classification
list.
Potential Follow up
The consultant will need to determine whether or not there are additional low risk food products
that have not been identified. If so, they will need to be classified.
Depending on interest of FDA, the consultant can prepare a HS Tariff training course, which targets
the area of the HS that is of concern to FDA (Chapter 1 – 24).
This report is submitted for consideration.
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