Category Archives: Economy

How a New EU-Funded Project is Boosting Foreign Trade in Mongolia



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In an exciting move for Mongolia’s foreign trade, the European Union-funded “Foreign Trade Support Project in Mongolia” is working closely with the General Department of Customs to enhance trade facilitation and promote economic growth. On August 8, 2024, the project team met with Deputy Head G. Enkhtaivan to discuss strategic actions aimed at streamlining customs processes, fostering stronger business partnerships, and improving coordination across government agencies.

Key Goals of the Project:

  • Simplifying foreign trade processes
  • Promoting the export of non-mining goods
  • Reducing trade costs and operational time
  • Boosting Mongolia’s economic competitiveness

Empowering SMEs and Removing Barriers This project is particularly focused on creating opportunities for Mongolian small and medium-sized enterprises (SMEs) to access European markets by addressing non-tariff barriers, and ultimately diversifying the country’s export portfolio.

Customs Policy Reform: The General Department of Customs is also playing a pivotal role, prioritizing reforms such as updating cross-border legislation, conducting impact analyses, and fostering public-private partnerships to ensure smooth implementation of these changes.

Deputy Head Enkhtaivan noted the collaboration as essential to ensuring Mongolia’s competitiveness in global trade.

With a promising road ahead, this project is poised to transform Mongolia’s foreign trade landscape by facilitating more efficient processes and increasing opportunities for local businesses.

#MongoliaTrade #ForeignTradeSupport #CustomsReform #EUProjects #EconomicGrowth #TradePolicy #SMEs #MongoliaEconomy #TradeFacilitation #MongolianExport #PublicPrivatePartnership #BusinessGrowth #Mongolia #ExportDiversification #CustomsEfficiency #NonTariffBarriers #InternationalTrade #EconomicCompetitiveness #TradeReform #SMEOpportunity #CustomsLegislation #CrossBorderTrade #TradeInnovation #MongolianBusinesses #GlobalTrade

Seed Industry Law: Building a Sustainable Future for Mongolia’s Cultivated Plants



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The Seed Industry Law of Mongolia is a critical legislative framework that governs the development and sustainability of the seed industry for cultivated plants. This law fosters innovation, supports fair trade, ensures food security, and protects genetic resources by regulating everything from the creation of new plant varieties to seed trade and quality control.

The law is designed to cover all aspects of seed industry development, from research and innovation to seed propagation and sale. It applies to both domestically produced and imported seeds of cultivated plants, ensuring that the genetic resources and biodiversity are maintained and that the rights of plant variety creators are protected.

Key Definitions Under the Law

  • Seed: Defined as living seeds, implants, seedlings, embryos, and reproductive organs used for the reproduction of cultivated plant varieties.
  • Variety: A group of plants within a botanical community that are distinguished by the expression of stable characteristics resulting from specific genotypes and their combinations.

Areas of Regulation

The law encompasses various aspects of seed industry regulation, including:

  1. Seed Production: Encouraging the sustainable and efficient production of seeds.
  2. Seed Quality Control and Assurance: Mandating strict control over seed quality to ensure that only high-quality seeds reach the market.
  3. Seed Trade: Regulating the trade of seeds to foster fair competition and protect the rights of traders and consumers.
  4. Registration of Varieties: Implementing a structured process for registering new plant varieties, allowing for the protection of intellectual property rights of plant breeders.
  5. Protection of Cultivated Plant Varieties: Safeguarding the innovations and efforts of variety creators by granting them exclusive rights and ensuring the sustainable use of cultivated plant genetic resources.

Government Involvement

At the national level, the implementation and management of seed-related policies are overseen by the state central administrative body in charge of agricultural matters. Local farming departments and agricultural units play key roles in administering these policies within their respective regions, ensuring consistency in the enforcement of quality standards and fostering the growth of the seed industry.

By establishing a legal framework for seed production, quality control, and innovation, Mongolia is building a robust foundation for agricultural sustainability, food security, and economic growth in its farming sector.

#SeedIndustryLaw #MongoliaAgriculture #PlantVarieties #SeedTrade #CultivatedPlants #FoodSecurity #SeedProduction #AgricultureLaw #SustainableFarming #VarietyProtection #SeedQualityControl #AgriculturalInnovation #FarmingPolicy #PlantBreeding #SeedRegulations #Biodiversity #GeneticResources #FairTrade #IntellectualProperty #Farming #FoodSafety #CultivatedVarieties #AgriculturalDevelopment #SeedInnovation #MongolianLaw

Unlock the Benefits of Trade: How to Obtain a Certificate of Origin in Mongolia



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A Certificate of Origin is essential for businesses exporting products, as it certifies that the goods are partially or fully produced in Mongolia. Issued by the Mongolian National Chamber of Commerce and Industry (MNCCI), this document plays a key role in international trade by verifying the origin of goods for tariff benefits, trade agreements, and legal requirements.

What is a Certificate of Origin?

According to Article 6.2 of the Mongolian Law on Chamber of Commerce and Industry, the MNCCI issues certificates of origin under the “Regulation on determining the origin of export products derived from Mongolia and on issuing the certificate of origin.” This legal document is proof that goods exported from Mongolia are either entirely or partially manufactured within the country.

Types of Certificates of Origin:

The MNCCI issues several types of Certificates of Origin based on specific trade agreements, including:

  • Certificate of Origin Form A
  • Certificate of Origin Form E
  • Certificate of Origin Form APTA
  • Certificate of Origin Form B
  • Certificate of Origin Form-D

These forms are crucial in enabling products to qualify for tariff reductions or exemptions under various trade agreements, ensuring smooth international transactions.

Required Documents for Obtaining a Certificate of Origin

Entrepreneurs looking to obtain a Certificate of Origin must submit the following documents:

  1. Copy of foreign trade contract (buying/selling)
  2. Application form
  3. Invoice (English sample with Mongolian explanation)
  4. Packing list (Invoice & Packing list in Russian/English)
  5. Copy of Incorporation Certificate (individuals provide a copy of their identity card)
  6. Document detailing product composition (if raw materials were imported, include the customs declaration)
  7. Copy of product license
  8. Quality conformity and hygiene certificates
  9. Additional documents may be required for certain certificates, including an additional examination.

Easy Online Submission

For added convenience, businesses can now submit their requests for certificates of origin online by uploading the necessary documents to the MNCCI’s platform. This streamlines the process, making it easier for businesses to meet their export requirements efficiently.

By obtaining a Certificate of Origin, businesses not only comply with international trade laws but also unlock tariff benefits and access to global markets.

Why It Matters

Securing a Certificate of Origin from Mongolia ensures your products are recognized internationally, facilitating smoother transactions, securing tariff advantages, and opening doors to global opportunities.

#CertificateOfOrigin #MongoliaExports #ChamberOfCommerce #MNCCI #TradeLaw #ExportDocuments #BusinessCompliance #TradeAgreements #MongolianProducts #GlobalTrade #ProductLicensing #QualityControl #Exporting #InternationalBusiness #ForeignTrade #BusinessGrowth #TariffBenefits #ExportersGuide #CustomsCompliance #LegalDocumentation #TradeRegulations #OnlineCertification #CommerceIndustry #ExportSuccess #DocumentPreparation

“Mongolian Social Insurance Reporting: Avoid Costly Mistakes and Penalties!”



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In Mongolia, accurate and timely social insurance reporting is more than just a legal obligation; it’s critical for protecting your business and employees. Employers must navigate the precise requirements set by the Mongolian government to report social insurance contributions properly. Failure to do so can lead to steep penalties, reimbursement demands, and costly audits. Here, we’ll guide you through the essential steps and consequences to keep your company compliant and running smoothly.

Timely Submission of Reports

Every employer in Mongolia is required to submit a monthly social insurance contribution report to the relevant social insurance institution. This report is due by the 5th of the following month and must be certified with an electronic or digital signature. Missing this deadline can result in financial penalties, so it is crucial to remain diligent with reporting.

If the 5th of the month happens to be a weekend or a public holiday, the report is due the next working day. This flexibility ensures that businesses can maintain compliance even during holidays without incurring penalties. However, it’s important to stay on top of your deadlines to avoid unnecessary complications.

Compliance and Potential Consequences

The Mongolian regulatory framework is strict about ensuring that employers comply with the laws surrounding social insurance contributions. Violations are taken seriously, and businesses found to be in breach may face reimbursement demands and other penalties.

Here are some common violations that could trigger compliance issues:

  • Concealment or Incorrect Reporting: If a company intentionally misreports or conceals the actual salary fund for social insurance contributions, it’s a serious violation. Employers must ensure that their contributions reflect the true financial activities of their business. This includes reporting all income subject to social insurance correctly.
  • Underpayment of Contributions: Employers who fail to pay the correct amount of social insurance contributions may face financial penalties. Conducting regular internal audits of payroll and contribution systems is essential to ensure that payments are accurate and reflect the correct figures.
  • Late Payments: If social insurance contributions are submitted late, penalties may apply. This could lead to reimbursement obligations and additional fines. It’s vital for employers to establish a consistent calendar of deadlines to stay compliant.

Why Compliance is Essential

Beyond avoiding penalties, compliance with social insurance reporting is an integral part of maintaining a stable business in Mongolia. By fulfilling your obligations, you contribute to the social safety net, which benefits both employees and employers. Accurate contributions ensure that your employees have access to social services such as healthcare, pensions, and unemployment insurance. It also protects your business from government audits and financial risks.

Employers are urged to stay informed of any regulatory changes to avoid non-compliance. The government may update regulations, and businesses must adapt to these changes promptly. With diligent record-keeping and a proactive approach to regulatory shifts, your company can remain compliant and support the welfare of its employees.

Final Thoughts

While the rules surrounding social insurance contributions in Mongolia can seem complex, staying compliant is critical for the smooth operation of your business. By prioritizing accurate and timely reporting, you not only meet your legal obligations but also contribute positively to your workforce’s welfare.

For any employer, navigating these regulations carefully will ensure the protection of both the business and its employees. Keeping up with the evolving legal landscape will enable you to avoid fines, audits, and penalties while fostering a secure and compliant workplace.

New Criteria for Savings and Credit Cooperative Activity: A Comprehensive Guide to Financial Health and Risk Monitoring



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On June 5, 2024, Mongolia’s Financial Regulatory Commission passed Resolution No. 286, introducing new “Criteria for Appropriate Ratios of Savings and Credit Cooperative Operations.” This critical update requires savings and credit cooperatives to assess and mitigate risks by adhering to four essential groups of indicators:

  1. Asset Quality and Security Indicators
  2. Indicators of Efficient Financial Structure
  3. Indicators of Costs and Expenses
  4. Indicators of Ability to Quickly Execute Payments

Each group has specific methodologies designed to ensure precise evaluations. These indicators collectively measure the financial health and risk exposure of cooperatives, leading to an overall assessment that is vital for operational stability.

Quarterly Reporting Obligations

Savings and credit cooperatives must calculate these ratio indicators every quarter, submitting detailed reports to the Financial Regulatory Committee by the 10th of the month following each quarter. The reports include various appendices covering areas such as:

  • Lending and Loan Allocation
  • Deposit Interest Rate Surveys
  • Large Borrower and Affiliated Entity Loan Reports
  • Capital Contributions and Large Depositor Reports
  • Financial Structure Efficiency
  • Income and Expense Ratios
  • Payment Execution Capabilities

The goal is to ensure transparency, maintain the financial stability of the cooperative, and protect member interests.

Protecting Financial Stability

By implementing these guidelines, the Financial Regulatory Commission is aiming to safeguard the integrity of savings and credit cooperatives in Mongolia. This initiative enhances the trust and security within the country’s financial system, ensuring that cooperatives operate effectively while minimizing risks.

#MongoliaFinancialRegulations #SavingsAndCreditCooperatives #FinancialRiskManagement #CooperativeFinancialHealth #FRCResolution286 #MongolianCooperativeStandards #FinancialStability

“Unlocking Financial Inclusion: Establishing a Savings and Credit Cooperative in Mongolia”



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Setting up a savings and credit cooperative in Mongolia is a strategic move toward fostering community-driven financial empowerment. As a not-for-profit legal entity, a cooperative operates on the principles of common ownership, allowing members to unite and meet their shared economic, social, and cultural needs. By pooling resources, cooperatives improve members’ livelihoods while sharing risks and accessing valuable financial services.

Key Requirements for Establishment

In Mongolia, establishing a cooperative comes with distinct requirements based on its type:

  • Ordinary Cooperatives: Must have at least 9 members.
  • Savings and Credit Cooperatives: Require at least 20 members.
  • Joint Cooperatives: Must be founded by 2 or more legal entities.

Obtaining a Special License for Savings and Credit Activities

Savings and credit cooperatives must apply for a special license from the Financial Regulatory Commission (FRC)after registering with the state’s legal entity register. This special license allows cooperatives to conduct deposit and credit operations and expand into various financial services, such as:

  • Financial leasing services
  • Project and program financing
  • Electronic payment agent services
  • Insurance agent activities

To obtain the special license, the cooperative must submit an application and supporting documents to the FRC. Within 45 working days, the FRC will decide on whether to grant the license.

Member Responsibilities and Legal Context

Members of savings and credit cooperatives are actively involved in decision-making processes, contributing capital, and adhering to the cooperative’s bylaws. The cooperative must comply with legal frameworks promoting transparency and good governance, ensuring that operations adhere to both national and international best practices.

The establishment of cooperatives in Mongolia is designed to enhance financial inclusion, improve livelihoods, and build resilient communities. By leveraging cooperative structures, members can access essential financial services, all while adhering to robust legal frameworks that promote accountability and transparency.

#MongoliaCooperatives #FinancialInclusion #CommunityDevelopment #CreditCooperative #SavingsCooperative #CooperativeLaw #FinancialServices #MongoliaBusiness #FinancialEmpowerment #CooperativeMovement #LegalServices #SocialInclusion #FRC #MongolianLaw #CooperativeGovernance #FinanceMongolia #EconomicDevelopment #SocialFinance #CreditUnion #CorporateLawMongolia

Obtaining a Construction Permit in Mongolia



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As in many countries, Construction activities are required to have appropriate permits. Construction a construction permit will typically be issued for a period of 5 years. If the term of the construction permit expires, it may be extended for a further 5 years. Legal entities with a construction permit are allowed to perform construction activities as described by the permit within a target plot of land.  Construction projects without a permit are subject to official fines.

Different types of permits are available for different types of construction related work. Activities are classified in three separate areas i) construction of a new structure, ii) expansion and renovation of an existing structure and iii) demolition and removal of a structure. Each is also further subdivided according to the nature and complexity of the specific project and may be categorized as “low, “average” or “high” complexity. A construction permit is project specific and must match the work being performed. For example, a “high complexity” renovation permit will not allow a company to perform “low complexity” new structure construction.

A Construction permit is granted by the local provincial or from the city Governor. When a developer files to obtain the construction permit the developer should prepare and file an application describing the details of the construction along with relevant technical documentation.   Upon submission of the application the reviewing authority make a decision and issue the construction permit within 10 business days.

Changes to Mongolian Central Bank Guarantee Independent Operation



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Finishing our series (part one here, part two here) reporting on changes to the operations of the Mongolian Central Bank we present here the new provisions which will work to solidify and encode in the law the bank’s operations as an independent entity, not directly under the control of the executive branch of the government.

Independence of the Central bank from Government.

The amendments explicitly provide for the independence of the Central bank from the government. It is clear that the government should not provide any direction to the Central Bank regarding the agreements and transactions the bank enters into or in any other matter unless explicitly provided for in the law. The Central Bank of Mongolia should not directly or indirectly grant credit to the Government of Mongolia and may only purchase long and short-term securities of the Government from primary or secondary market except where explicitly provided for in the law.

Granting Credit to the Government

Under the new law, the Central bank of Mongolia may grant temporary credit or buy a short- term Government Bond in order to meet seasonal liquidity needs of the government, subject to repayment before the end of the financial year. If the Central Bank of Mongolia bought bond/securities issued by the Government, it will be added to the credit balance of the Government. In the frame of open market operation, the long -term securities of Government purchased by the Central Bank of Mongolia contingent upon repayment in short terms will not be included in the total amount of the balance of temporary credits.

Supervision of Bank Activities

The Central Bank of Mongolia will have authority to establish procedures, regulations and instructions, and make decisions, and carry out supervision and enforcement activities relating to the licensing to establish banks and operating activities of banks. This includes matters relating to the maintenance of adequate paid in capital and liquidity of bank assets, improving the security of the banking system, and regulation of banking activities for the purpose of protecting the interests of depositors and customers.

New amendment also updated the range of Central Bank’s activities.

In order to implement its objectives, the Central Bank of Mongolia will conduct the following activities:

  • issuing and regulating currencies into transaction;
  • formulation and implementation of monetary policy;
  • acting as the Government’s fiscal intermediary;
  • supervision of banking and entities specified in the law activities;
  • organizing, reconciling and supervising of local/national payments and settlements system;
  • holding and management of the State’s reserves of foreign currencies;
  • protecting right and interest of customer, depositor;
  • implement balanced/proper macro policy.

Changes to Mongolia Central Bank Managment



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New Amendments to the Law of Mongolia on Central Bank

In our previous post, we introduced changes to the law on the governance of the Mongolia Central Bank. In this post, we will take a closer look at the most important changes.

Monetary Policy Committee

According to the new amendments to the Law of Mongolia on Central Bank, major changes are coming for the management committees’ roles. For instance, the Monetary Policy Committee will consist of 7 members including 4 adjunct members, and members will be appointed in terms of 6 years. Monetary Policy Committee will discuss and decide following matters: a) a draft of state monetary policy; b) determine interest of instrument of monetary policy; c) determine required reserves amount of bank, requirement of proper balance of percentage and amount. Form/ Formula of Monetary policy committee’s activity will be meeting.

The Monetary Policy Committee will decide matters via a majority vote of members participating in the meeting and the chairman will make a final decision in case of a tie. The meeting of the monetary policy committee will be held no less than 4 times a year. If President of Central bank of Mongolia or not less than 3 members of committee proposed to hold a meeting, special meeting will be conducted. Monetary policy committee’s decision will be issued by resolution type/form/format and certified by the signature of the chairman of meeting.

Monetary Policy Instrument

The Central Bank of Mongolia will use the following instruments to implement the state monetary policy.

1) Setting of the amount and proportion of compulsory reserves to be maintained by banks;

2) Grant a credit to the banks and use financial instruments;

3) pursuing a unified policy on interest rate;

4) conducting open market operations;

5) imposing a ceiling on credit outstanding to be granted by banks.

The Central bank will develop/draft the procedure for the determination, assessment, supervision of the required compulsory reserves of banks.

Supervision Committee of Bank:

Supervision Committee of Bank will discuss and issue recommendations on the following matters regarding to implement power of Central Bank to supervise on the banks.

  • To implement to supervise banks, regulate bank’s activity pursuant to the law, a draft of resolution, methodology, procedure, guidance, rule in connection with enforcement measure to the bank;
  • Report on the supervision of the banks;
  • Proposal to grant credit to the bank, Corporation of Savings Insurance in order to stabilize banking and financial system under the law.

The composition and rule of Supervision committee of Bank will be approved by the President of Central Bank of Mongolia.

Parliament Confirms Changes for Central Bank of Mongolia



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The Parliament of Mongolia has approved amendments to the law governing the Central bank of Mongolia. The changes will effect the legal status of the bank and its independence. The Bank’s decision making process has been adjusted based on the standards, practices and principles implemented by central banks in other countries so the operations of the Central bank of Mongolia will comport with the international standard. The amendments will enter into force from the April 1, 2018.

One big change coming is that the bank’s involvement and influence with matters such as the state budget will be circumscribed, making the bank more independent from the Government. At the same time, there will be a mechanism in place to ensure clear lines of communication between the government and the bank.

This amendment will contribute to the increase of independence of the Central Bank, proper development of monetary policy, improvement of implementation of legal circumstance, promotion of further price stability at the macroeconomic level and will help to provide greater financial stability, and to maintain and promote long term economic stability for the slowly growing Mongolian economy

Most of world’s Central banks are responsible for balancing inflation and price level, and such responsibilities are clearly provided for in relevant laws. However, the Mongolian Central bank’s mission had been to balance and stabilizing the National currency. The new amendments help to more clearly define the Central Bank’s goal. The amendment defines the Central bank’s objective as the “Price Stability”, this objective and goals is meeting and complying with international level and standard.

This is undoubtedly a positive development for the Mongolian economy. We will keep you updated and will have a more detailed discussion regarding the exact nature of the new amendments in an upcoming blog.