PAF uses the ~ (tilde) as the first character on a Notes line to mark the note as Confidential.
The recommendation is to not export Confidential Notes, by unchecking the box in front of Confidential Notes as you can see in the images below. If you are using PAF, you may also want to define the ~ (tilde) as the Prefix for private notes in your Import Settings.
To export UTF-8, you must
You should always export UTF-8 if your mySQL database is defined as utf8_xxxxxxxx_ci
To export ANSI, you must
You should always export ANSI if your mySQL database is defined as latin1_xxxxxxxx_ci