LEGISLATIVE UPDATE: 2022 SPRING SESSION AND MONGOLIA’S NEW REVIVAL POLICY

We provide information on key legislative changes introduced during the previous Parliamentary session and legislation to be discussed and approved during the current spring Parliamentary session.

APPROVAL OF NEW REGULATION ON THE CHANGES TO THE SHARE CAPITAL AND SHAREHOLDING STRUCTURE OF BANKS AFTER IPO

In January 2021, the Parliament of Mongolia adopted the Law of Mongolia on Amendments to the Banking Law which required systemically important banks to become open joint stock companies by 30 June 2022. In light of this, on 5 October 2021, the BoM and the FRC adopted a Joint Order approving the “Regulation on the Approval of Changes to the Share Capital and Shareholding Structure of a Bank in the form of a Joint Stock Company”.

LEGISLATIVE UPDATE: REVISIONS TO THE MONGOLIAN LABOR LAW

After long discussion and debate since the submission of its initial draft on 26 March 2018, a revised Labor Law (the “Revised Labor Law”) was adopted by the Parliament of Mongolia on 2 July 2021, which will come into force and effect on 1 January 2022.This briefing focuses on some select changes of interest to employers and businesses operating in the private sector.

LEGISLATIVE UPDATE: MONGOLIA REVISES ITS VISA REGULATIONS

On 7 July 2021, the Government of Mongolia adopted Resolution No.192 which approved the Regulation on Issuance of Mongolian Visas (the “Visa Regulation”). The Visa Regulation became effective on 16 August 2021. Below we highlight some of the key changes introduced by the Visa Regulation.

MONGOLIA’S LEGAL FRAMEWORK ON COAL BED METHANE

With vast amounts of proven coal reserve, there is significant potential for development of the methane gas industry in Mongolia. Below we provide general information on certain regulatory matters that may be of interest to those involved or looking at this sector.

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. https://bit.ly/3bAxC14

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: https://bit.ly/3dVIZVj

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: http://shorturl.at/duHJZ

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: https://lnkd.in/eT2Qh8S

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: https://global.practicallaw.com/w-017-7372

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: https://www.nyulawglobal.org/globalex/Mongolia_Research1.html

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.