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.

Mongolia Passes New Law on Food Enrichment



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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



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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.

THE 2019 FALL SESSION OF THE STATE GREAT HURAL



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The 2019 fall plenary session of the State Great Hural started on Tuesday, 1 October 2019 at the State Palace.

At the opening of the fall plenary session, the Speaker of the State Great Khural Mr G.Zandanshatar remarked that only two regular session left for the parliament, formed as a result of the 7th parliamentary election in 2016. There is a spring session in 2020 after this session. Therefore, the fall session of parliament requires to work under the tight schedule and high pressure.

Many bills, draft amendments and resolutions are expected to be discussed and passed by the fall session, especially a draft amendment to the Constitution of Mongolia and a bill on elections must be adopted six months ahead of the next year’s parliamentary election.

In addition, Parliament is scheduled to review around 28 legislative proposals in despite of the resolutions during the autumn session as namely below:

  • Drafts of State budget in 2020,
  • Law on the Legal Status of the Capital City.
  • Draft Law on Legal Status of Cities and Villages;
  • Draft amendments to the Law on Food Supplement and the Law on Food Security;
  • Revised draft to the Law on Family;
  • Revised draft to the Law on Labor;
  • Draft amendments to the Law on Infringement Proceeding;
  • Draft amendments to the Criminal Code;
  • Draft amendments to the Law on Criminal Proceeding;
  • Bill on advocacy;
  • Revised draft to the Law on Tourism;
  • Bill on Transparency in Mineral Resources;
  • Revised draft to the Law on Competition; and
  • Bill on Patriotic Purchasing etc.

Shareholder’s Meetings VS Board of Director’s Meetings



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The Company Code of Mongolia allows the companies to decide on the organization and management of the BoD upon the approval of their Company Charter, and unless otherwise provided in a company’ s charter, the chairperson of the Board of Directors shall convene and preside at its meetings and supervise the preparation and retention of minutes of such meeting.  

Moreover, the same Company code does not provide any explicit procedure on the convocation of the BoD’s meeting, in other words does not specify what type of communication / eg tele- and/or online conference/ shall be used for the such meetings. This ‘open’ regulation might be of interest to the foreign investors or businessman who live and work abroad and have company operations in Mongolia.

The subjects to be discussed at the BoD meeting and the Shareholder’s meeting also differ The Article 76 of the Company Code of Mongolia provides the list of subjects, which belong to the full authority of the Board of Directors, including but not limited to the ones listed below:

  • The holding of regular and special shareholders meetings;
  • Election and modification of the company’s executive body and determining its authority;
  • Selection of the company’s auditor and establishment of the terms of the contract to be concluded with such auditor;
  • Conclusion of the company’ s annual report of business operations and financial statements.

Such subject matters stated above shall be decided at the BoD meetings, and the Shareholders Meeting shall make a decision regarding the decision and/or conclusion made by the BoD.  In other words, the Shareholders meeting shall approve the decisions made by the BoD.  In particular, the Authority of the Shareholders’ Meeting includes:

  • Consideration and approval of reports prepared by the Board of Directors with respect to the company’ s annual operations and financial statements;
  • Other proposals submitted to the meeting by the decision of the Board of Directors and others. For such reasons, the companies shall know the different legal provision concerning these two authorities in order to avoid any adverse legal consequences that might occur.

Patent Maintenance Fees



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A patent owner shall pay the following fees to Intellectual property office of Mongolia (IPOM) in order to maintain the validity of their patents:

  • 10000 MNT /~ 3.77 USD/ for the 1st three years;
  • 20000 MNT /~ 7.54 USD/ for the 4th-6th years;
  • 30000 MNT /~ 11.31 USD/ for the 7-10th years;
  • 40000 MNT /~ 15.09 USD/ for the 11th-15th years;
  • 50000 MNT /~ 18.86 USD/ for the 16th-20th years.

The payment for the patent validity of 1st three years shall be paid within 6 months after the decision on the issuance of patent, and the payment of further fees are to be paid 6 months prior to the commencement of the preceding fee payment. In case the patent owner failed to make the payment on time, the IPOM may grant an additional 6 months and in such case the patent owner shall pay additional fees equivalent to the non-paid duration fee.

The IPOM is entitled to invalidate the patent in case of non-payment of fees within the additional 6 months. However, if the patent was invalidated on the grounds of failed payment, the patent may be renewed upon the request of patent owner within the general valid term of the patent (20-50 years).

Well Known Trademarks in Mongolia



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In case of a dispute in connection to the unfair competition and conflict of interests of your trademark, the trademark owner is entitled to apply a request for declaration of your mark as well-known in Mongolia him/herself or through representation of an authorized intellectual property agent to the Dispute Settlement Committee of the Intellectual Property Office of Mongolia.

For this purpose, the trademark owner shall file an application only in relation to one trademark and such request shall include, aside from providing basic personal and business information on the applicant and/or the authorized intellectual property agent, following information:

  • Description of the trademark for the declaration as well-known mark;
  • The name list of the well-known trademark product and services;                    
  • The date of the trademark declaration as well-known;
  • The status of the intellectual property rights of that particular trademark in Mongolia;
  • The justification/reasons for declaration of trademark as well-known mark along with their proofs and evidences.

Furthermore, the Intellectual property office of Mongolia is responsible for the public distribution of the well-known marks, yet unfortunately according to the unofficial statement, no such applications for declaration of trademark as well-known have been submitted and hence there is no list of the well-known marks in Mongolia as of today.

Well-Known Trademarks in Mongolia



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The Paris Convention for the Protection of Industrial Property, to which Mongolia joined in 1985, provides that the countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods.

These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well–known mark or an imitation liable to create confusion therewith. Accordingly, Article 3.1.3 of the Law on Trademark and geographical indication defines the well-known mark as “the well-known trademark in the respective sector of Mongolia and the one, which does not require any IP registration. Within its duty for drafting and adoption of the Regulation concerning the IP-related matters, the Intellectual property office of Mongolia adopted a “Regulation concerning the IP-related matters, on the determination of the trademark as being well-known” on 08th April 2014.

It is important to note that the Regulation applies only within the territory of Mongolia and covers the trademarks /it may be both national and international ones/ that are well-known to the general public of Mongolia. Those companies interested in settling the question whether their trademark may be considered to belong to this category, they shall file a request to the Dispute settlement committee of the Intellectual property office of Mongolia.

Domain Names and the Legal Framework: Part I



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Due to its singular and inimitable feature, the assigned website names constitute an “online” name card for business operators and serves as an essential tool aimed at building and maintaining their position in the market. Such assigned names of websites are extended by the so-called domain name extensions/ top-level domains/ such as .com, .de, edu.com or gov.mn, which illustrate the country of operation or the type of operation.

The legislations of very few countries including Singapore allow granting of the registration and usage rights of their country’s domain name extensions only to those companies, that have been duly registered in these respective countries. However, the laws and regulations of Mongolia do not provide such restriction or prohibitions. In other words, Mongolia’s official domain extension name “.mn“ may be registered not only by local companies, but as well as by any foreign entity, who wish to promote their operations to Mongolian consumers and/or perhaps to protect their world-wide known brand in Mongolian market.

In Mongolia, the relations concerning the establishment of communications network, the operations and protection thereof and the proper furnishing with the high-quality communications and information technology products and work services to citizens and legal entities is regulated by the Law on Communications. The Amendments to this Law dated 30th May 2019 provide that the Communications Regulatory Commission composed by the Government of Mongolia shall be in charge for the adoption of the Procedure related to the registration and usage of domain names and the execution monitoring thereof.

According to the unofficial statement from the Communications Regulatory Commission, the working group responsible for drafting of these Procedures has been established. As a whole, the state policy and the legal framework with regard to communications, in particular internet and domain names, are vague and unsophisticated. On 05th June 2019, the Provisional committee for digital policy at the Mongolian Parliament adopted a Resolution on the Directives to the Government of Mongolia /GoM/ and pursuant to Article 12 of the Resolution, the GoM shall establish the legal environment concerning domain names and define the state policy in relation to this matter.

Mining License Renewal



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Do the originals of the Mining Licences need to be taken physically to MRPAM for the annual registration?

The license-holder is obliged to pay license fees annually in order to keep the license valid.   When you pay the annual license fee the original mining license certificate is required to be taken physically to MRPAM  (Mineral Resources and Petroleum Authority of Mongolia) and make the appropriate record on the annex of the license certificate.

According to the internal rule of MRPAM, when MPRAM receives original documents such as mining license, request letter, license fee and MRPAM will provide the receipt confirmation. The receipt confirmation shall contain the documents received by the MRPAM and the date on which the license certificate was recorded the annual payment will be returned to the license holder or authorized person.  Practically speaking, the registration will take 3-7 days depending on the workload of MRPAM. Please note that if license holder is unable to do the annual payment and registration, an annual registration could be done with MRPAM if agent has a proper POA to act on behalf of the license holder. 

What’s the process for in case of the Mining Licences were lost or damaged and can the Mining Licences be reissued?

MRPAM will re-issue the mining license and following documents are required when apply for new license certificate:

–          Official request letter to reissue the license;

–          A receipt of the stamp duty fee of 250 000 MNT for mining license and 200 000 MNT for exploration license paid to MRPAM;

–          Announcement of invalidation of the lost license in the newspaper (piece of announced newspaper including the name, date, number of the newspaper);

–          A copy of Company certificate issues by the LERO;

–          Completed application form (reissuance of license) (available at MRPAM’s website to download)