Tag Archives: New Law

Important Changes to Permitting Extensions and Renewals



Posted by , ,

In our previous post, we looked at the new Law on Permitting and the goals of the government to reduce and standardize permitting requirements overall. This week, we will look at how the new Law on Permitting will simplify the process for application to extent a permit.

Under the revised law, a permit holder shall apply to the competent authority 30 days in advance to renew the permit.

An interesting aspect to the revised law provides that where a permit holder is able to show they meet certain qualifying conditions, for example, having fully paid taxes due, and having a good record of reliable employment, the initial period of the permit will be automatically doubled. In other words, if the permit is issued for 3 years, it can be extended for 6 years.

Also under the revised law, the reviewing authority is required to issue a decision (acceptance or denial) on the application for extension within 10 working days from the receipt of the application and the materials submitted. If no decision has been issued within the 10 day period, the permit will be automatically extended. This system is designed to avoid a common problem encountered in the past in which business found their permits revoked solely to due to delay in timely processing, even where the application for extension had been submitted on time. This had resulted in substantial difficulty and wasted resources for business forced into administrative and litigation battles to regain operating permits.

Another new regulation in the draft law is to establish electronic database of permits. The electronic database for permit shall be maintained by the Secretariat of the Council under the Prime Minister. Permission granted, extended, suspended, revoked, terminated, pledged or transferred shall be registered in the electronic database of permit.

Revised Law on Permitting Aims to Reduce Regulatory Burden



Posted by , ,

The newly submitted Law on Permits is being discussed before the Parliament and approval is expected. One of the key goals with this new update to the Law on Permits will be a reduction in the number of permits required to be issued by the state authorities with the aim of allowing citizens and legal entities more flexibility to conduct business.

The current Law on Licensing specifies the types of licensed activities. The law authorizes the relevant state administrative authority to issue licenses for specific business activities. However, various government agencies continue to create new licenses and expand licensing requirements within the scope of their authority. Over time, the situation has developed to the point where there are 1,600 separate a company may be required simply to conduct it’s target business . Originally, the Law on Licensing provided for the issuance of about 200 unique licenses. Currently, at least 8 different permits are required to operate a simple supermarket business; whereas the revised law aims to reduce that number to only two, a license for the sale of alcohol, and a separate license for sale of tobacco products. The revised Law on Permits will provide for 365 different types of permits, a reduction of 77%.

The new Law on Permits regulates only those activities that require a permit in order to allow citizens and legal entities to conduct businesses freely. Under the revised Law, permits will be classified as a “License” or a “Permit”, depending on the purpose, conditions and level of operational risk.

Under the new law, Licenses will be issued for a period of at least 5 years while ordinary Permits will be valid for a period of at least 3 years. The permit shall be extended for at least the period for which it was originally issued. Permits may be granted indefinitely in cases provided by law.

In general, the updated law calls for a decision on whether to grant a license to be made within 30 days of receipt of the application, this is an extension of the 21 days provided for under the current law.

This blog provides general reasons for the adoption of the Law on Permits. The next blog will cover other new features and a discussion of implications.

What to Consider when Entering into an Employment Agreement (Part 1)



Posted by , , ,

Let’s look into what should both employer and employee consider when concluding an employment agreement.

Pursuant to Labor Law, depending on legal status of employer, there are employment agreement with individual-employer and employment agreement employer, which is legal entity. About regulation of employment agreement with individual-employer is briefly discussed in previous article.

Aside from common employment agreement, where employer is a legal entity and where it is concluded for permanent positions, Labor Law (Law) distinguishes seven other types of employment agreement.

Apprenticeship employment agreement

In order to provide an employee with work experience and skills employer may conclude an apprenticeship employment agreement. Term of regular apprenticeship employment agreement is up to three months with possibility of extending once for no more than three months. However, term for professional apprenticeship employment depending on characteristics of the profession and professional experience and skills to be acquired may be up to two years with possibility of extending once for no more than one year. Salary of an apprentice must be determined by agreement based on his/her duties, work experience and skills, and must not be less than 70% of the salary of a full-time permanent employee performing similar work.

Employment agreement for trainees

An employer, student and educational institution may conclude a tripartite traineeship agreement in order to provide vocational education and training to students of vocational educational institutions, combine theoretical knowledge with practical experience, gain work experience and skills. Term of employment agreement for trainees is up to three years, depending on the profession to be acquired. Salary of a trainee must be negotiated but not less than minimum wage, taking into consideration the ratio of study and working time, the quality and volume of work performed, as well as financial aid received from the educational institution.

Pursuant to Law at the end of agreement term employer is not obliged to hire apprentice or trainee on permanent basis, unless otherwise agreed by parties. Other provisions and regulations of Law, including provisions and regulations regarding employee allowances, surcharges and compensations also equally apply to apprentices and trainees.

Probationary employment agreement

When hiring an employee, employer may conclude probationary employment agreement to ensure that the employee meets the requirements of the job or position. Term of probationary employment agreement is up to three months with possibility of extending once for no more than three months. Salary of probationary employee must be not less than salary offered for the job or position. If employee is hired for one-time seasonal work, as replacement of a permanent employee or for temporary job or position to conclude a probationary employment agreement is prohibited.

Types of Employment Under the New Labor Law



Posted by , , ,

As previously discussed here, the revised Labor Law came into force on January 1st of this year. Many of our clients have already have updated their employment agreements and internal labor regulations. However, some are still in progress in this matter. In some cases client have asked our Mongolian lawyers what types of employment agreements are permitted under the new Labor Law?

The revised Labor Law (Law) provides for a wider variety of employment agreement types. Even though Law provides general rules and requirements for all types of employment agreements, depending on legal status of employer, occupation characteristics, job description and other factors, the type of employment agreement shall vary.

The Law provides for slightly different regulation for employment agreement between employee and an individual as employer than common employment agreement, where the employer is a legal entity. Pursuant to Law such employment agreement should be concluded between the individual employer and and the worker. This uniquely type of labor arrangement is intended to accommodate a more rural employment environment. Due to the characteristics of rural work, the working schedule and resting hours are more flexible than in a typical employment arrangement. With this type of contract, the parties may agree for the employee to live and work directly in the employer’s residence or other facility, and in this case, the employer is required to provide normal living conditions to employee.

With regards to common employment agreement, Law distinguishes following types of employment agreements: apprenticeship employment agreement, employment agreement for trainees, probationary employment agreement, part-time employment agreement, employment agreement for employees working from home, remote employee employment agreement and employment agreement with special conditions (such as an executive employment agreement). Even though some types of employment agreement may sound to be somewhat similar to each other, they do differ in purpose and regulation. Also, Law separately regulates agreement for supply of labor. However, Law specifies that job placement services are not regulated by this Law, but are regulated by Employment promotion law.

Constitutional Change Improves Environmental Impact Transparency



Posted by , , , ,

The Parliament of Mongolia amended the Constitution of Mongolia on November 14, 2019, according to the second part of Article 6.2 of the Constitution of Mongolia “… By using subsoil resources within the right of citizens to live in a healthy and safe environment have the right to know about the impact on the environment”.

In order to exercise this constitutional right, the Law on Environmental Protection and the Law on Environmental Impact Assessment provide for measures to be taken by citizens to monitor the status of subsoil use, environmental impact, rehabilitation and monitoring by the authorities. The legal regulation of the right to know and the legal regulation of the exercise of constitutional rights are in the process of being approved.

This is very important regulation. There are frequent tripartite disputes between citizens and company using subsoils or project implementer and local authorities such as Governor and Citizens’ Representative Meeting.

Citizens complain that companies using subsoil in local area and project implementers are destroying the environment and failing to rehabilitate it, and demand that action be taken to stop the activity.

The reason for this is that citizens are not given the right to know and the information they want has not been provided. In other words, failure to provide information or access to information on the current status of subsoil use, its impact on the environment, and the process and results of rehabilitation, the lack of access to information has led to a number of negative consequences, such as misinformation and misunderstandings.

On the other hand, due to the failure of the local government to provide the above information to the citizens, the citizens have lost trust in the local governors and the Citizens ‘Representatives’ Meeting and therefore there have been many cases that citizens criticized local government that not protecting their rights and interests instead protecting and serving the interests of the company using subsoil and project implementers.

As a company using subsoil and project implementer, they have spent a certain amount of money and have conducted certain activities, such as employing local people, providing financial support for local development, and conducting regular rehabilitation work. Lack of information or access to information has led to many misunderstandings and conflict among citizens due to a lack of information about their work and investments.

Therefore, it is important to ensure that citizens have access to information and right to know, and that local governments and project implementers are required to report their work and the results of their activities in connection with proving information to citizens.

According to the two laws mentioned above, on the one hand, the law allows a citizen may request information from the aimag, capital city, soum and district governors, project implementer on the condition of natural resource use within the territory, its impact on the environment, rehabilitation process and control measures taken by the state authorities and project implementers.

On the other hand, aimag, capital city, soum and district Citizens ‘Representatives’ Khurals and Governors shall openly inform citizens about the conditions of land use, environmental impact, rehabilitation and control measures within the territory, and provide relevant information upon request, and therefore obliged to report it to the Citizens’ Representatives Meeting.

As a project implementer, they are obliged to provide or provide information on the status of subsoil use, environmental impact, rehabilitation process and results related to its activities at the request of the citizen.

Mongolia’s New Law on Virtual Assets Providers



Posted by , , , , ,

In recent years number of companies and organizations have come out and sold various “coins” and tokens. Although virtual asset services have the advantage of using technological advances to increase access to finance at low cost, the process of trading coins and tokens is carried out in very short term and at high prices. As a result, special legal regulations became necessary due to high risk of possible increase of cybercrimes, and as consequence individuals and investors to become victims of cybercrimes, or even unknowingly get involved in money laundering and terrorist financing crimes said lawmakers. Thus, the first draft of Law on Virtual asset service providers was submitted by the Government on May 12, 2021 and the parliament adopted it on December 17, 2021. The law came into force on February 25, 2022.

Pursuant to law public offerings and trading of virtual assets now can be done only through companies registered as virtual asset service providers. Companies that want to provide virtual asset services and that meet requirements set in law and ancillary regulations on combating money laundry, terrorist financing and risk mitigation can be registered with Financial Regulatory Commission (FRC) as virtual asset service providers. Once registered virtual asset service providers shall be obliged to identify its customers, determine the legality of their assets, and inform customers in advance about risks of becoming victims of technical and fraudulent crimes in the process of possessing and trading of virtual assets.

Pursuant to law eight ancillary regulations must be adopted, which are currently being developed by FRC. FRC is currently conducting survey on some of the draft regulations. You can read the draft regulations (only Mongolian versions are provided) (the link http://www.frc.mn/a/3910) and send your proposal by March 27, 2022.

FRC shall not register any company as virtual asset service provider within four months from the date the law came into force. This period is given for FRC to develop and adopt aforementioned ancillary regulations. Companies that provided virtual asset services before the law was adopted shall satisfy all requirements set in law and ancillary regulations within three months after expiration of the four-month period and may be registered with FRC as virtual asset service provider.

The law expressly provides that registration of a company as virtual asset service provider is not considered as guarantee for the virtual asset. The government shall not be responsible for any damages resulting from activities related to virtual asset service, and public offerings and trading of virtual assets through a company not registered as virtual asset service provider is prohibited.

An individual or legal entity that violates the law shall be subject to liability specified in Criminal Code or Law on Infringements. Administrative penalty for violation of law for individuals is fine in the amount equal to from 1 million MNT up to 3 million MNT, for legal entities is fine in the amount equal to from 10 million MNT up to 200 million MNT.

So, it looks like in October virtual asset market will start to be more regulated and well-ordered.

Revised Law on Personal Information Protection for Digital Age



Posted by , , ,

The parliament adopted a revised Law on Protection of personal information on December 17, 2021, and this law will come into force on May 1, 2022. This law is a revised version of current Law on Individual secrecy, which will be repealed on the date when revised law comes into force.

Current Law on Individual secrecy was adopted in 1995. It has passed over 20 years since then and social relations have changed and evolved a lot. The revised law covers a wider range of personal information than the current law, and regulates protection of personal information rather than “personal secrets”. Law on Protection of personal information covers personal information (such as name, date and place of birth, citizenship, educational background, membership, information on property, etc.) and sensitive information (such as nationality, religion, gender, key to digital signature, criminal and medical records, sexual orientation, correspondence, etc.), which also include genetic and biometric information.

The revised law introduces several novelties. One of them is that any personal and sensitive information must be collected, processed and used with a written consent from owner of the information (either written on paper or electronically), with exception of cases specified in laws. Pursuant to current Law on Individual secrecy only owner of personal information has responsibility to protect his/her own “personal secrets”. When the revised Law on Protection of personal information comes into force the responsibility to protect one’s personal information shall be imposed also on government bodies, individuals, legal entities and organizations without the rights of a legal entity that legally collected, processed and used personal information. Also, lawmakers differentiated criminal liabilities for disclosure of personal information via telecommunications and the Internet, and toughened criminal penalties.

The revised law also regulates matters and restrictions related to installation of cameras, voice recording devices and making of recordings in public places, offices and/or at home, processing and use of such recordings.

Intellectual Property Law Reform in Mongolia



Posted by , ,

Over the past decade or so due to rapid development of technologies more new types of works and creations are starting to be protected by intellectual property rights. Hence the relations and transactions related to intellectual property rights are becoming more complex and multifaceted. Naturally, reform of intellectual property legislation becomes necessary. So, new Law on Intellectual property was adopted on January 23, 2020 and came into force on December 1, 2020. Law on Intellectual property establishes general regulations related to intellectual property rights, legal status of intellectual property authorities and institutions. In one of our previous blogs, we have covered highlights of this law. And matters related to specific types of intellectual property are regulated by separate relevant laws.

As part of said reform several key laws were renewed and amended on May 6, 2021, particularly, Law on Patents, Law on Copyrights, and Law on Trademarks and Geographical indications.

Revised version of Law on Patents was adopted and it implements several new significant regulations. Here are highlights of these new regulations:

  • new law provides to grant patents for utility models, whereas previously certificates were granted for utility models;
  • patentability criteria of inventions, utility models and industrial designs are redefined, in the sense that they are more clarified;
  • patent application filing procedures have become more detailed, particularly, formal examination of application is split into two stages: composition check of application documents and examination of application documents;
  • due to the fact that terms in the Patent Cooperation Treaty (PCT), to which Mongolia is a party, are long and the need to bring the law into line with PCT, patent application filing terms and prior art search and substantive examination terms have been extended. Also, other relevant regulations have been brought into line with international treaties, to which Mongolia is a party;
  • regulation of electronic filing of patent applications have been updated, while previous regulations were very vague;
  • more clarified regulation is added concerning third-party observations (third-party objections);
  • regulation on international patent application filing procedures, and licensing agreement regulations have become more detailed.

Overall, the new law has implemented more detailed regulations and precise terms of patent application filing, application examination and patent granting procedures, and has eliminated any previously existing inconsistencies and overlaps of regulations.

In our following blogs we shall discuss about new regulations established in Law on Trademarks and Geographical indications and Law on Copyrights.

Mongolia Passes New Law on Food Enrichment



Posted by , ,

According to the 5th National Survey “Nutrition of the Mongolian population”, the there is a common high deficiency in vitamin and minerals among children and women in Mongolia.

The World Health Organization (WHO) recommends the Government of Mongolia to consume enriched food daily and provide a large portion of the day to day calories by a large proportion of the population.

Therefore, the State Great Khural of Mongolia (Parliament) adopted the Law on the Enriched Food on 03 May 2018, which shall be effective from 31 December 2019.

The food enrichment is aimed at preventing and monitoring vitamin and minerals’ deficiencies among the populations and is a cost-effective and efficient public health measurement.

The Government of Mongolia approved the “List of Mandatory Enrichment Food ” by the Resolution No. 336 of October 31, 2018. According to the resolution, wheat flour, bread flour and salt are required to be enriched. This also applies to flour and salt imported to Mongolia.

According to the WHO recommendation, the enrichment preparation for wheat flour is a combination of vitamins B and D vitamins, iron and zinc. However, salt for food is enriched with potassium iodate (KIO3).

In the framework of the Law on Enriched Food, it is planned to approve the rules of the registration of the enriched food, the creation of its database, the production and storage of fortified foods and the procedures of indicating the enriched food’s emblems and symbols.

Mongolia Passes New Law on Advocacy



Posted by ,

Today, on 18th October 2019, during its Parliament session, the State Great Khural had its final discussion of the draft Law on the Advocacy and other proposed law drafts, and 53.3% voted for the adoption of the Law on Advocacy.

The Law on Advocacy became void in 2012, and there has been no specific law on advocacy or the legal professional since that time. According to supporters of the law, the legal profession has faced severe hindrances since 2012. Even the independent Attorney Association had collapsed, leaving legal professionals in uncertainty as to many aspects of the practice of law.

This new law contains detailed regulations concerning the rights, duties, and professional code of ethics for attorneys, as well as a description of procedures for settlement of potential violations thereof.

This Law on Advocacy shall enter into force from the 01st February 2020.