ONE YEAR OF AMENDMENTS TO THE CONSTITUTION OF MONGOLIA
It has been nearly one year since the amendments to the Constitution of Mongolia, enacted on 13 January 1992 (“Constitution”) became effective. On 14 November 2019, the State Great Khural of Mongolia (“Parliament”) made significant amendments (“Amendments”) to the Constitution and the amendments became effective on 25 May 2020. This was the second time that the Constitution was amended since its adoption in 1992.
ГАДААДЫН ХӨРӨНГӨ ОРУУЛАГЧ УУ? ЗАЛИЛАГЧ УУ?
Хөгжиж буй улс орнуудын иргэд, ялангуяа хөрөнгө санхүүгийн туршлага, мэдлэг дутмаг иргэд, хуулийн этгээдүүдийг онилж, хууран мэхлэх, залилах гэсэн үйлдэл байнга гардаг гэдгийг та бид бүгд мэднэ. Харин бизнес эрхлэгчид, хөрөнгө оруулалт хайсан компаниудыг онилсон хуурамч хөрөнгө оруулагч нарыг хэрхэн таньж мэдэх бэ? Эдгээр залилан хийх гэж буй этгээдүүдийг таньж мэдэхэд туслах боломжтой зарим нэг зөвлөгөө, анхаарах асуудлуудыг товч дурдъя.
MONGOLIA AMENDS ITS BANKING LAW
On 29 January 2021, the Parliament of Mongolia adopted the Law of Mongolia on Amendments to the Banking Law (“Amendments”). Together with the Amendments, the Parliament of Mongolia adopted the Law of Mongolia on Procedures for Implementing the Law on Amendments to the Banking Law (“Implementation Law”). The Amendments and the Implementation Law entered into force on 25 February 2021. Please CLICK THE LINK:
COUNTRY UPDATE-MONGOLIA: INSURANCE
In cooperation with Thomson Reuters, M&E’s article “Country Update-Mongolia: Insurance” has been published by Practical Law. This article highlights some of the key legal regulations commonly associated with the insurance market in Mongolia. PLEASE CLICK THE LINK:
MONGOLIA - DATA PROTECTION OVERVIEW GUIDANCE NOTE
In cooperation with One Trust Data Guidance, M&E’s article “Mongolia-Data Protection Overview Guidance Note” has been published at the website DataGuidance. This article highlights some of the key legal issues relating to data protection in the financial, health and telecommunication sectors.
PLEASE CLICK THE LINK:
MINING IN MONGOLIA: OVERVIEW
In cooperation with Thomson Reuters, M&E’s article “Mining in Mongolia: Overview” has been published at the website Practical Law, in the global energy and natural resources section. This article highlights some of the key legal issues commonly associated with the exploration and extraction of mineral resources in Mongolia. Please see the link below:
LEGISLATIVE UPDATE: MONGOLIAN TAX REFORM
The Parliament of Mongolia adopted the revised General Taxation Law (the “GTL”), the Law on Corporate Income Tax (the “CIT Law”) and the Law on Personal Income Tax (the “PIT Law”, together the “Taxation Package Laws”) on 22 March 2019, which became effective from 1 January 2020. In connection with these revised laws, approximately 23 laws were amended. Revised methodologies on valuation of minerals licenses and land rights for tax purposes were approved by the Ministry of Finance and officially published as of 20 January 2020.
IMPACT OF THE FATF GREY LISTING ON FDI INTO MONGOLIA
In October 2019, the Financial Action Task Force (“FATF”) included Mongolia into its watchlist (the so called “Grey List”). From the outset, this could increase the concerns of investors around economic stability, smooth international transactions, and free flows of currency. If the Grey List status lasts for a significant length of time, this could develop into more serious problems, but we believe this status should be corrected within a short-term period and do not expect that it will have a material medium or long-term impact on FDI. Some of the potential short-term risks and the main points underpinning this are set out below.
UPDATE: OVERVIEW OF THE MONGOLIAN LEGAL SYSTEM AND LAWS
In cooperation with New York University, M&E’s article “Overview of the Mongolian Legal System and Laws” has been published at the website GlobaLex, an electronic legal publication dedicated to international and foreign law research. Please see the link below:
LEGISLATIVE UPDATE: MONGOLIA AMENDS ITS RENEWABLE ENERGY LAW
The Parliament of Mongolia approved the amendments to the Renewable Energy Law (the “Amendments”) on 6 June 2019. The Amendments have now been published in the State Gazette, bringing it into force.
WILL MONGOLIA IMPLEMENT CURRENCY CONTROLS?
One of the headline issues giving rise to concerns among investors in Mongolia right now is the effect of a new Currency Law being approved by Parliament, and its implications both for existing and potential FDI.
OVERVIEW OF THE MONGOLIAN LEGAL SYSTEM AND LAWS
Since the establishment of the Mongol Empire in 1206, the development of the Mongolian legal system can be divided into four main historical stages: Mongol Empire Period this is the period of the formation of the roots of Mongolian legal system. Chinggis Khan's Ikh Zasag Law, commonly known as Yassa, written sometime between 1206 and 1218, was for the most part a codification of the general principles of law already held by the tribes under his command.
STEPPE ON THE GAS
Recent announcements and developments regarding construction of a gas pipeline between Russia and China, transiting Mongolia, have been gathering steam and if the project moves forward would be a major boon for the Mongolian economy with a number of potential side benefits. These developments have built on the concept of an “economic corridor” between China and Russia routing through Mongolia.
FALL SESSION AGENDA
It’s always an exciting moment for lawyers when the Parliamentary agenda for the next session is published and there are some interesting legislative developments penciled in for discussion during the fall session of Parliament. While this time is typically dominated by debates around the state budget, a number of other interesting points are worth highlighting.
THE INVESTMENT CLIMATE
As we head into the first week of September, conference season is upon us, with a number of investor-related events taking place in the space of just 5 days, including traditional annual events such as Coal Mongolia, Discover Mongolia and the IWFCI Global Women’s Trade Summit.
SOME TAXING QUESTIONS
Effective from 1 January 2018, Mongolia introduced changes to its Minerals Law, Land Law, Law on Registration of Legal Entities and various tax specific laws, with the aim of increasing tax revenues by way of a 30% tax on the direct or indirect transfer of rights in land and minerals licences.
Developing the vast Erdenes Tavan Tolgoi coal deposit has been one of the biggest strategic challenges that Mongolia has faced over the past ten years, with various different unsuccessful attempts having been made. These range from the failed auction of 2010, the abortive international IPO in 2012-13, the blocked deal with Shenhua in 2015, and on the operational side, a difficult contract with Chalco that has kept the business locked down to onerous long-term obligations, and the shift of operations from Macmahon to the mysterious TTJVCo. Meanwhile, the 1072 citizens shares issue remains unresolved and confusing.
Mongolia has a rich tradition of nomadic pastoralism, constituting a key element of the nation’s culture and traditions. With the onset of significant urbanization, and just under half of the country’s population now residing in or around Ulaanbaatar, these traditions are slowly changing, exacerbated by the infamous Mongolian dzud which reduces the livestock population and damages the livelihood of nomadic herders.
VISA ISSUES FOR FOREIGN BUSINESS
Several immigration issues have been prevalent over the course of 2018 as a result of various factors which are impacting both on foreign invested major projects, including Oyu Tolgoi, and now trickling down to impact on smaller businesses.
CONSULTATION AND THE IMPLEMENTATION OF LAWS
A number of important pieces of legislation are slated in the books for the upcoming spring session of Parliament, including extensive amendments to tax legislation, a new law on Mining, the revised Labour Law and various amendments to laws in the banking sector aimed at implementation of the ongoing IMF program.