A/HRC/42/CRP.3 55. MEC is reportedly fully owned and controlled by the Ministry of Defence and, as such, is a direct source of revenue for the military.118 According to reports, MEC is controlled by the Tatmadaw’s Quartermaster General’s Office. MEC also has a wholly owned private subsidiary, Myanmar Economic Corporation Limited (MEC Ltd). The Board of MEC Ltd is reported to include the Chiefs of Staff of the Army, Navy and Air Force, the Defence Permanent Secretary and the Directors of the Directorates of Supply and Transport, Signals, and Electrical and Mechanical Engineers.119 MEC Ltd is reported to be audited, whereas MEC is not.120 Moreover, because DICA is not required to publicly disclose any financial or annual reports or filings received from MEC,121 it is difficult to track financial flows between MEC and its subsidiaries, as well as sources of MEC revenues and where such revenue is spent. 3. Revenue 56. Information about the revenues of MEHL and MEC is scarce. Both holding companies were exempt from income and commercial tax between 1998 and 2011. To date they have never made their financial reports available to the public.122 Much of the funds generated through MEC and MEHL bypasses formal government channels, with indications that billions of USD in government revenue from the oil and gas, copper, jade, rubies, amber and forestry sectors remain unaccounted for.123 In the jade sector, in which MEHL and MEC are major players, investigations and analyses have found that jade worth tens of billions of USD is smuggled each year into China, while only a small fraction of jade is officially sold through the government-run Myanmar Gems Emporium and taxed.124 57. Tatmadaw-owned resource companies and government revenue collecting agencies publicly disagree on the amounts of tax paid by MEHL and MEC and their subsidiaries. 125 For MEC, the discrepancy between what the company reported paying and what the government reported receiving amounted to Ks 9.8 billion (approximately 6.4 million USD), equating to two per cent of all extractive industry revenues collected nationwide each year. 126 118 119 120 121 122 123 124 125 126 Michael Peel, “Myanmar: The Military-Commercial Complex,” Financial Times, 2 February 2017 (https://www.ft.com/content/c6fe7dce-d26a-11e6-b06b-680c49b4b4c0). Digital record 2008. Digital record 2008. Thiha, “Companies Must Submit Annual Reports to DICA Starting February 2019,” ConsultMyanmar, 17 September 2018 (https://consult-myanmar.com/2018/09/17/companies-must-submitannual-reports-to-dica-starting-february-2019/); Nan Lwin, “Companies Law to Take Effect in Shadow of Rakhine Crisis, Civil War,” The Irrawaddy, 28 June 2019 (https://www.irrawaddy.com/business/lauded-companies-law-to-take-effect-in-shadow-of-rakhinecrisis.html); Company Directors Guide: A Guide to the Myanmar Companies Law 2017, Directorate of Investment and Company Administration, see: “Submit an Annual Return Each Year” and “Lodgement of Forms and Documents”. As of the date of publication, the financial reports of MEHL and MEC were not publicly available through the Directorate of Investment and Company Administration (DICA). This is despite MEHL’s transition into a public company in 2016 and Myanmar’s new Companies Law, which requires the registration of all companies and submission of corporate reporting to DICA. See paragraph 52 of this report. Discrepancies highlighted in Extractive Industries Transparency Initiative reports (https://eiti.org/document/myanmar-20152016-eiti-report) cited in Kevin M. Woods, “The Conflict Resource Economy and Pathways to Peace in Burma,” USIP, November 2018. Global Witness, “Jade: Myanmar’s Big State Secret,” 23 October 2015. For examples of such differences in the 2016 and 2017 fiscal years, see: Myanmar Extractive Industries Transparency Initiative (MEITI): The Fourth Myanmar EITI Report For the Period 1 April 2016 to 31 March 2017 (FY 2016-2017), Oil and Gas, Gems and Jade, Other Minerals and Pearl, 30 March 2019 (https://myanmareiti.org/sites/myanmareiti.org/files/publication_docs/4th_meiti_report_30_march_20 19_1.pdf), pgs. 164-165, 169. Myanmar Extractive Industries Transparency Initiative (MEITI): The Fourth Myanmar EITI Report For the Period 1 April 2016 to 31 March 2017 (FY 2016-2017), Oil and Gas, Gems and Jade, Other Minerals and Pearl, 30 March 2019 (https://myanmareiti.org/sites/myanmareiti.org/files/publication_docs/4th_meiti_report_30_march_20 19_1.pdf). 21