Adopting a Mongolian Child: International Adoption Procedure



Posted by ,

Adoption of a Mongolian child by a foreign individual or couple is a complex procedure requiring several stages. As we mentioned in our previous post, the adopting parents are firstly required to obtain approval for adoption in their home country.

The prospective parents must then submit their adoption application via their home country’s adoption system, which will forward the application to the appropriate body in Mongolia. If a prospective foreign parent has resided in Mongolia for over six months, the international adoption application shall be submitted directly to the government central administrative body in charge of population matters of Mongolia (the “State authority”).

The applicant must submit a report containing information on their personal characteristics, presenting their suitability of the adoption, their educational status, information regarding their family background and health information, their history of the disease, income and social status. The adopter must also describe their reasons for adopting.

After review and approval of the international adoption application the State authority will select a probable adoptive child and initiate contact with the prospective adoptive parents through the international adoption agency.

The Immigration Agency of Mongolia will review the relevant adoption documents, and will examine and make a decision on the condition of the child and suitability for adoption. An adoption commission will conduct a face to face interview with the prospective adoptive parents, as required by the Mongolian “Regulation on the Procedure to Interview Foreign National Requesting Adoption of a Mongolian Child”. The regulation is approved and implemented directly by the head of the Immigration Agency of Mongolia.

The purpose of interview with the prospective adoptive parents is obtain a better understanding of the parents ideas, goals, the reasons for adoption, and to gauge their parental fitness, education, employment, financial prospects, understanding of the responsibilities of adoption, understand their family history, determine future plans. The interview will also assess the prospective parent’s ability to care for the health of adoptive child, the appropriateness of the parent to match the characteristics of the child, as well as ensuring the adoptive parent’s attitude toward and ability to socialize and educate the child.

The final decision to approve the international adoption will be made by the majority vote of the members of the commission after the interview with adoptive parents. If the adoption is approved, the Head of the Immigration Agency of Mongolia will issue an approval order based on the decision.

Throughout the process, it is beneficial for prospective parents to have a local contact or legal support to liaise with government officials to assist in responding to questions or concerns of the reviewing officials.

Adopting a Mongolian Child: The International Adoption Framework



Posted by , , , ,

Every so often, our Mongolian lawyers receive an inquiry from a foreign couple, usually from the USA or Europe, seeking to adopt a Mongolian child.  When we get one of these inquiries, the first thing we do is explain some of the background to the international legal issues to the couple, then we get into the specifics of international adoption in Mongolia.

The adoption of a Mongolian child by a foreigner is governed under a few international Hague Conventions and by the Mongolia Family Law, Law on Legal Status of Foreign Nationals, and specifically by the Regulation on Procedure for Adoption of a Mongolian Child by Foreign Nationals.

From the international perspective, Mongolia has ratified the “Hague Convention on Protection of Children and Co-operation in Respect of Inter-country Adoption” and the “United Nations Convention on the Rights of the Child”. These two international conventions set specific rules for the protection of children and outline the rights and responsibilities of countries as regards international adoption.

In the event of suitable adoptive parents cannot be identified in the country of origin of the child, international adoption is allowed. Under these conventions, the best interests of the child is the primary consideration, and is a basic right of the child to be adopted and must be confirmed by the prospective adoptive parents. In an international adoption, the prospective adoptive parents must meet the legal adoption requirements of their country of residence. The adoption must also meet the same safeguards and standards as applied to internal adoptions within the child’s country of birth.

So, for foreign couples considering adoption of a Mongolian child, the first step will be to obtain adoption approval in the country of the couple’s current residence. In our next post we will review the specific international procedures, and local Mongolian process for adoption.

Mongolia Employees and Employers: Know Your Rights



Posted by , , ,

Mongolia has been a member of the International Labor Organization (ILO) since 1968 and has ratified 20 international conventions of the ILO, including all eight Fundamental Conventions, 2 of the 4 Governance Conventions, and 10 of 77 total Technical Conventions. Of the 20 Conventions ratified by Mongolia, 19 remain in force while 1 has been rescinded.

Through its ratification of all eight of the ILO’s fundamental conventions, Mongolia has recognized the following four fundamental principles and rights of the worker:

  • Ensuring freedom of association:
  • Eliminating child labour
  • Abolishing forced labour
  • Prohibiting non-discrimination in employment.

Recently, Mongolia hosted a National Workshop on International Labour Standards for members of the judiciary and lawyers. The workshop focused on application of labor rules by the courts domestic courts, and was organized in cooperation with the Mongolian Bar Association, the International Training Center of ILO and the ILO Country office for China and Mongolia (CO-Beijing).

Judges, attorneys and government officers participated in the training for 5 days. The training consisted of review of the ILO and international labour standards system, the use of the work of ILO’s supervisory bodies; and discussions as to when and how domestic judges and lawyers can use international labour law to effectively resolve labour disputes. Of key importance was ensuring the relevance of international labour standards in key situations with widespread practical application.

The workshop found that in practice, the international labour standards set out in the various conventions were not widely referred to or implemented by Mongolian lawyers and courts. This is determined to be primarily due to lack of knowledge of many of these professionals as to Mongolia’s ratification of these conventions, and the fact that due to inadequate translation into Mongolian, many professionals were not certain of the actual contents of the conventions.

The workshop focused on the importance training in strengthen participants’ knowledge and skill to effectively utilize these international labour sources to resolve employment and labor issues within Mongolia.  All participants noted that these international labour standards may be used directly to resolve the labour disputes or to interpret a relevant domestic provision to fill a gap and resolve ambiguities in the domestic law.

Proper awareness of and application of these international standards are vital for both Mongolian employees and expatriates working in Mongolia. Expatriate employees in Mongolia are granted equal  legal rights and protections, and should never feel their foreign employer has the upper-hand in cases of unfair termination or discrimination in Mongolia.

Major New Mongolia Wind Energy Project Secures Funding



Posted by , ,

An international conglomerate has now closed a deal on financing to construct and manage a new 55 MW wind energy facility in Mongolia.

Located in Dornogobi province, the project will be Mongolia’s third and eventually its largest ever wind energy park. Turbines to power the park of 25 V110-2.0 MW turbines in 2.2 MW power-optimized mode, will be supplied by Danish company Vestas. European Investment Bank and the European Bank for Reconstruction and Development provide financing.

Traditionally Mongolia’s energy industry has been dominated by coal. Now, Mongolia’s wide open spaces and abundant wind allow for greater reliance on wind energy.

The new wind energy project will help Mongolia meet its energy needs resulting from higher demand, increased industrialization and urbanization trends.

Political Unrest in Mongolia Threatens IMF Review of Funding



Posted by , , , , ,

The Executive Board of the International Monetary Fund (IMF) on May 24, 2017 approved a three-year extended arrangement under Extended Fund Facility (EFF) for Mongolia to support the country’s economic reform program. Other financing partners, including the Asian Development Bank, the World Bank, Japan, and Korea, have also committed to provide budgetary and project support, and the People’s Bank of China has agreed to extend its swap line with the Bank of Mongolia. In sum, the total financing package amounts to about $5.5 billion. The Board’s approval of the arrangement enabled the immediate disbursement of about $38.6 million. Addition of these funds to reserve currency of Bank of Mongolia had positive impact on the country’s economy and improves outlook for foreign investment.

Prior to each quarterly disbursement, IMF staff monitors and reviews if the country’s progress in meeting the conditions under the program justifies the continuation of disbursement. By this standard IMF staff team visited Ulaanbaatar from July 19 to August 2, 2017 to conduct discussions on the first review of the EFF arrangement. At the end of the visit the IMF staff team concluded that performance under the program has been good, with all quantitative targets on track. According to Bank of Mongolia’s report, the IMF staff’s positive conclusion enabled subsequent funding from above mentioned financing partners within the EFF arrangement. The IMF staff conclusion is subject to review by the management and Executive Board of the IMF. The Board is expected to consider the first review in late September, and this could lead to a disbursement of about $37.82 million.

In the midst of this positive news, Mongolian politics remains unwieldy. On August 23, 2017 thirty members of Mongolian People’s Party (MPP) group in the parliament signed and submitted a petition to dismiss the Prime Minister J.Erdenebat, and consequently, the Government. This is likely to cause some level of political destabilization. History of some countries (e.g. Argentina, Greece) shows that political destabilization may cause IMF to suspend or even cancel its financial aid altogether. Though we have high hopes that these political issues will not escalate to that point in Mongolia.

It is critical that this happens not long after the stir occurred during the Presidential election, in connection with payout of children’s money by the Government. The IMF staff team disapproved such action by the Government. Therefore the Government committed itself to target the Children’s Money Program to less affluent families, which partially led to overall positive preliminary findings of the IMF staff team. Thus any kind of political destabilization may not only affect the further implementation of EFF arrangement, as well as country’s further economic well-being.

According to the Constitution of Mongolia, the petition to dismiss Prime Minister should be discussed and resolved by the parliament within 15 days. We will keep you informed here of the outcome, and potential consequences.

Enforcing Foreign Court Judgments and Arbitration Awards



Posted by , ,

As we work with many foreign clients engaged in a range of international businesses, one of the most comment questions asked by our clients is whether a foreign arbitral award or court decision will be enforceable in Mongolia.

Generally speaking, Mongolian courts will generally not recognize or enforce judgments rendered in a foreign state unless Mongolia has concluded a treaty with that state concerning the mutual recognition of judgments. In this case, we would have to look at the relationship between the particular state from which the court decision originated to determine if there is a treaty, however, Mongolia has ratified very few such treaties and changes are slim such court judgment will be enforceable.

So what to do? The Mongolian Enforcement Agency will generally enforce a foreign arbitration award, so long as enforcement would not violate any public policy.

Mongolia has ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, in 1994 and the courts of Mongolia will enforce an arbitral award in Mongolia provided that such award:

  • is given by an arbiter of competent jurisdiction;
  • imposes on the judgement debtor a liability to pay a liquidated sum for which the judgement has been given;
  • is final;
  • is in relation to a dispute which is commercial in nature;
  • is confirmed by a judicial order in Mongolia;
  • is not in respect of taxes, a fine or a penalty; and
  • was not obtained in a manner and is not of a kind the enforcement of which is contrary to the public policy of Mongolia;

There are a few specific circumstances under Mongolia’s Arbitration Law in which a foreign arbitration will not be enforced:

  • one of the parties to the arbitration agreement is incapacity or arbitration agreement is invalid;
  • proper notice of the appointment of an arbitrator or of the arbitral proceedings was not given to the respondent party and unable to participate to the arbitral procedure and provide the response;
  • arbitral award is not contemplated by or not falling within the terms of the submission claim, or arbitral award is beyond the scope of the claim;
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties and law of the country;
  • award is not binding or valid or suspended;
  • the subject-matter of the dispute is not capable of settlement by arbitration under the law of Mongolia;
  • the recognition or enforcement of the award would be contrary to the public policy of Mongolia.

Mongolia is in the Middle of a Constitutional Amendment Process



Posted by , , , ,

Mongolian Constitution has been in force for the last 25 years, dating from its adoption in 1992. It has been amended once in 1999 and again in 2001. It is the fourth Constitution of Mongolia since the first was adopted in 1924. Subsequent constitutions were put into place in 1940 and in 1960.

Mongolians today pay close attention to issues connected with the recent constitutional reform. A series of public consultations for Constitutional reform have been held in the Ulaanbaatar and in local aimags.

Several recommendations have been put forward for public discussion:

  • maintaining the current balance of power between the legislature and the executive branches of government;
  • strengthening the unity of the country;
  • consolidating how local administration is structured;
  • developing a professional, independent civil service;
  • strengthening the judiciary to improve the legal structure; and
  • creating a bicameral legislature that would include the State Great Hural and the State Congress. (Mongolians Discuss Constitutional Reform, supra.)

Taking the outcome of the public consultations into consideration, a consolidated proposal will be finalized and submitted to the parliament during the upcoming autumn session this year. However, the Democratic Party disagreed with this procedure and issued a statement demanding to hold a public referendum to hear voices of the people rather than organizing public consultations taking place in limited scope.

According to the Constitution, Constitutional amendments may be initiated by the President, members of the Parliament and the Government, as well as being proposed by the Constitutional Court to the parliament. A national referendum on constitutional amendment may be held where it is supported by at least two-thirds of the legislature. An amendment to the Constitution will have the same force as the Constitution when adopted by not less than three fourths of votes of all members of the parliament.

 At the moment, the general public is encouraged to provide inputs to the proposed amendments. More information may be found at the following website:  http://forum.parliament.mn/projects/171.

Everything you Need to Know about Corporate Guarantees in Mongolia: Part II



Posted by , ,

In our most recent blog post we introduced the concept of the corporate guarantee in Mongolia, its basic function in a commercial transaction, and some unique aspects of such guarantees under Mongolian law.

Today, I wanted to briefly summarize the basic roles and responsibilities taken on by the Guarantor and as well as the Obligee.

Firstly, remember that the Obligee has a positive obligation to report to the Guarantor if and when the Obligor has failed to perform its duties. An Obligee will lose its right to claim against the Guarantor if the Obligee doesn’t properly perform this notification. The Obligee should also provide further information relating to the circumstances of the failure of Obligor as requested by the Guarantor.

As for the Guarantor, it is entitled to claim all rights and defenses as to non-payment which the original Obligor would be entitled to. The Guarantor will keep such rights and defenses even where the Obligor has taken action to relinquish or waive such rights.

If the Obligor is a natural person, in case such individual dies, the estate is primarily responsible for meeting the original obligations utilizing the funds and resources at its disposal. The Guarantor is only required to pay any amounts which cannot be covered through the estate.

The Guarantor of course has the ability to challenge a claim raised by Obligee if there are legitimate concerns.

As to potential liabilities of the Guarantor, beyond the obvious chance that the Guarantor may be made to pay in the event the Obligor doesn’t, the Guarantor may be required to pay any expenses in relation to early contract termination, or legal fees and expenses relating to any judicial proceedings required to adjudicate claims made by various parties. The guarantee contract may also specify that the Guarantor is required to pay for any damages or loss caused to the Obligee by the Obligor’s failure to meet its end of the agreement. The Guarantor will also be made to pay for any interest accrued do to the non-payment. Where Guarantors are more than one individual persons, they will each be jointly liable for the Guarantee regardless of any specific agreement between them.

There are many moving parts and considerations which we cannot address fully and effectively in this blog post. If you may require a corporate guarantee in Mongolia, you should seek assistance from a Mongolian lawyer.

Everything you Need to Know about Corporate Guarantees in Mongolia



Posted by ,

One of the firm’s Mongolian lawyers was asked recently to assist a longstanding client to confirm the legality of a corporate guarantee in connection with one of this client’s commodities trading transactions. The corporate guarantee is common in varies business transactions in Mongolia.

This particular client had some questions about the corporate guarantee, based on the client’s experience using similar instruments in the UK. A corporate guarantee in Mongolia has some special features, so it is worth taking a look at what makes a Mongolian corporate guarantee unique, and what the main laws are governing this vital business tool.

Under a typical guarantee contract the Guarantor undertakes to guarantee to an Obligee to accept a specific obligation in case of the failure of the Obligor to fulfill that obligation. The Guarantor’s obligation is normally limited by the Obligor’s obligation to the Obligee under the guarantee contract, and the Guarantor will not be responsible for obligations of the Obligor relating to separate agreements concluded after the date the guarantee is issued.

The guarantee contract itself may specify future obligations that come due at a certain time in the future, or conditional obligations which only arise in the event of the occurrence of a certain defined situation.

The guarantee contract must be concluded in writing. This is a formal requirement which is stated in the law. It’s always better to specify a limit to the Guarantor’s potential liabilities in case of the failure of the Obligor to meet its own obligations.

If the guarantee contract is to be valid for a period over 5 years, or by its terms is valid for an indefinite period, Mongolian law requires the Guarantor to notify the Obligee and Obligor at least three months in advance of any termination of the guarantee contract by the Guarantor;

If the guarantee contract is terminated on any party’s initiative, the Guarantor is legally required to fulfill its obligations arising before the termination of the contract.

Our next post will review some specific obligations of the parties to the guarantee contract under Mongolian law.

Mongolia Continues Cooperation with China on Mutual Free Trade Zone



Posted by , , , ,

Chinese news media is reporting that China and Mongolia are beginning a new process of conducting a feasibility study regarding development of a new Free Trade Zone (FTZ).

This comes in the contest of the second China-Mongolia Expo, held in Hohhot, the capital of China’s Inner Mongolia region. The conference will occur in late September, and will serve as a forum to discuss issues of mutual cooperation and development between China and Mongolia.

Mongolia’s trade with China in the first six months of 2017 has been USD $3.1 billion. This is a 44.2% increase year-on-year. China mainly exports gas, diesel, food, machinery and equipment to Mongolia, and imports natural resources, fur and raw materials.

Talk of the new FTZ comes after the China-Mongolia Cross-border Economic Cooperation Zone (CECZ) was announced in 2015. The CECZ is a 18 square kilometer  territory evenly divided along the China-Mongolia border. The CECZ is intended to facilitate import/export processing, logistics, warehousing, and e-commerce.

The increase in economic cooperation between China and Mongolia is a core part of the wider China-Mongolia-Russia economic corridor, which seeks to facilitate integration of Mongolia with the economies and infrastructure of China’s northern territories and Russia’s far east.