ࡱ> @ bjbjFF 7,,(6 ^DDDDXsss8st,Xww:xxxx`=??????$f R &cDxxcDDxxx@@@DxDx=@=@@DDMxw iKs^, 0!, Z XMXXDDDD DML @, 8 ccXDd7L' 4XLtrade policy regime: framework and objectives General Institutional Framework Mongolia is a parliamentary democracy. It's Constitution, adopted on 13 January 1992, provides for free elections on the basis of universal, equal and direct suffrage by secret ballot; the minimum age for voting is 18 years. Parliament consists of a single house (the State Great Hural); its 76 members are directly elected for a fixed term of four years. Parliament is the sole body vested with legislative authority, based on the Constitution. Parliament appoints or removes the Prime Minister (with the consent of the President), senior officials of the Government (e.g. ministers), and members of other bodies accountable to Parliament as provided for by law. Parliament approves the Government's annual fiscal policy plans and the Central Bank's annual monetary policy plans; it also has authority to ratify international treaties or withdraw from them. The President of Mongolia is the Head of State; presidential elections are held every four years. Presidential candidates are nominated by political parties that have at least one seat in Parliament. The President has the right to veto laws and resolutions of Parliament; the veto can be overruled if two thirds of the members of Parliament present do not accept it. The President has the right to propose to Parliament a candidate for the Prime Minister, as well as the dissolution of the Government. The President may issue decrees in conformity with laws, and may conclude international treaties. The Constitutional Court, which consists of parliamentarians, may remove the President if it decides that he/she has violated the Constitution, abused power, or breached his/her oath. The Government of Mongolia, headed by the Prime Minister, is the executive body of state power; it also directs the activities of local administrations, and concludes and implements international and intergovernmental treaties. The Prime Minister, in consultation with the President, submits their proposals on the structure and composition of the Government to Parliament, which then approves/disapproves the proposal. The mandate of the Government is for four years. Governance of administrative and territorial units of Mongolia is conducted by central and local governments. The Central Government's local policy is conducted through regional governors, who are responsible for the implementation of national policy and exercising administrative control at regional level, in addition to formulating and implementing the region's own policies. Mongolia is divided administratively into aimags (provinces) and the capital city (Ulaanbaatar); aimags are subdivided into soums (districts at the provincial level), which are further divided into baghs (villages, or subdistricts at the provincial level); the capital city is divided into districts and subdistricts (horoos). The Constitution guarantees the independence of the judiciary. The judicial system consists of the Supreme Court, two capital city courts, and eight district courts. According to Article 48 of the Constitution, specialized courts such as criminal, civil, and administrative courts may be formed. The Supreme Court interprets all laws with the exception of the Constitution; the Constitutional Court exercises supreme supervision over the implementation of the Constitution, makes judgements on the violation of its provisions, and resolves disputes related to the Constitution. If the Constitutional Court decides that laws, decrees, or other decisions of Parliament and the President as well as Government decisions and international treaties concluded by Mongolia are incongruous with the Constitution, the laws, decrees, instruments of ratification and decisions in question are invalidated. Cases are brought to the Constitutional Court upon its own initiative based on petitions received from citizens, or at the request of Parliament, the President, the Prime Minister, the Supreme Court, or the Prosecutor General. A General Council of Courts, whose 12 members include the President, Chief Justice of the Supreme Court, a member of Parliament, and a member of the Government, ensures the independence of the judiciary. The Council deals primarily with the selection of judges; budget, financing, and human resources of courts; protection of judges' rights; and other matters concerning the independence of the judiciary. Trade Policy Formulation and Implementation Any legislation, including on trade and trade-related issues, may be initiated by a member of Parliament, the President, or the Government. Ministries and agencies of the Government prepare a draft bill for laws and regulations related to their executive jurisdiction. A draft bill is referred by the Chairperson of Parliament for submission to the relevant Standing Committee of Parliament, where it is discussed with the participation of ministries in charge. The Standing Committee on Economic Policy deals with Mongolia's main economic policy issues including trade policies. Upon final approval by the Standing Committee, the bill is introduced to Parliament for discussion. According to Article 38 of the Constitution, the specific powers, structure, and procedure of the Government are determined by law. The current Government consists of the Prime Minister, the Deputy Prime Minister, the Prime Minister's Office, and 13 ministries in accordance with the Law on the Composition of the Government of Mongolia, enacted on 22September 2004. The formulation and implementation of trade policies is carried out by several ministries and agencies in consultation with representatives from the private sector. Currently, Mongolian trade policy is formulated and coordinated by the Ministry of Industry and Trade (MIT). The Ministry has the main responsibility for all issues related to trade, including trade promotion/facilitation and export development. Within the MIT, the Trade Policy and Cooperation Department is responsible for coordinating trade policy. The MIT supervises the Foreign Investment and Foreign Trade Agency (FIFTA) and the Mineral Resources and Petroleum Authority. The FIFTA is responsible for promoting and facilitating foreign direct investment and foreign trade. The Customs Tariff Council is responsible for making proposals and judgments relating to the development of the customs and tariff policy, formulation of a proper tariff system, the adoption of tariff rates, and the imposition of additional duties. The Minister for Finance chairs the Customs Tariff Council. The Customs General Administration, established under the Ministry of Finance (MOF), is responsible for enforcing the customs legislation, levying and collecting customs duties and other taxes, and preparing and submitting customs statistical data to the National Statistical Office. The Mongolian National Centre for Standardization and Metrology (MNCSM) coordinates and manages issues related to standardization, quality certification, testing, surveillance, and metrology throughout the country. The MNCSM is under the responsibility of the Deputy Prime Minister; 80% of its income is from the provision of certification and other services. The State Professional Inspection Agency is responsible for: inspection of imported and exported goods on grounds of food safety; agricultural inspections, such as for seeds and plants; enforcement of laws and regulations related to trade, industry, service, geology, and mining; and supervising the observation of standards. The Mongolian Intellectual Property Office is in charge of all trade-related aspects of the intellectual property, including copyright, patents, and trade marks; it is under the Deputy Prime Minister. The Bank of Mongolia (the Central Bank) is responsible for overall monetary and exchange rate policies; it also supervises banks and is required to maintain, inter alia, financial market and banking system stability. The Bank formally reports to Parliament. Other ministries that participate in the trade policy formulation include: the Ministry of Construction and Urbanization; the Ministry of Roads, Transportation and Tourism; the Ministry of Fuel and Energy; the Ministry of Food and Agriculture (for traderelated issues in the agricultural sector); and the Ministry of Justice and Domestic Affairs (for the drafting of laws and regulations, and for the trade-related aspects of intellectual property). In the non-governmental sector, the Mongolian National Chamber of Commerce and Industry (MNCCI) provides a number of trade support services, including issuing certificates of origin; registration of patents and trade marks; arbitration of foreign trade and investment disputes; independent inspection of exported and imported goods; providing export-market research and intelligence; organizing trade fairs, exhibitions and business missions; and project development. In addition, several sectoral business associations were set up in the 1990s to collect and share information, identify and deal with industry problems, discuss the trade policy issues that affect their industries, and represent their sectors in relation to Government. These include the Mongolian Association of National Producers, the Mongolian Wool and Cashmere Federation, the Mongolian Meat Exporters Association, the Mongolian Textile Producers Federation, and the Mongolian Association of Hides and Skins. Regular consultations between the Government and the private sector are conducted in a Government and Private Sector Consultative Committee; the main objective of the Committee is to improve the business and legal environment for the private sector. The Minister of Finance and the Chief Executive Officer of the Mongolian National Chamber of Commerce and Industry co-chair this Committee. Trade Related Laws and Regulations Since its accession to the ϲʹ in 1997, most of Mongolia's laws covering trade, trade-related policies, and investment have been revised, updated or newly created to enable Mongolia to meet its commitments as a member of the multilateral trading system (Table II.1). The new laws concern: free-trade zones, standards, sanitation, food safety, pharmaceuticals, trade marks and geographical indications, technology transfer, business registration and licensing, bankruptcy, VAT, civil legal relations (Civil Code 2002), government procurement, insurance, postal services, and rights over land and land fees. Amendments have been made to several laws, e.g: Business Entity and Organization Taxation (1992), Banks (1996), Companies (1999), Copyright (1993), Customs and Customs Tariff (both 1996), General Taxation (1993), Excise Taxation (1993), Export Customs Duty (1996), Foreign Trade Arbitration (1995), Stamp Duty (1993), and Patent (1993). Table II.1 Main trade-related legislation LegislationDateDescriptionThe Customs Law of Mongolia16 May 1996Regulates issues related to the organizational structure and legal basis of Customs, defining the procedures for customs control as well as customs clearance procedures and enforcement of the customs legislation. Customs Tariff Law of Mongolia 20 May 1996Regulated matters relating to the creation of the customs tariff system of Mongolia, principles for the adoption of customs duty rates, valuation and rules for levying and collecting customs duties.Excise Tax Law of Mongolia21 January 1993Imposes excise tax on certain imported and domestic goods and governs relations in respect of payment of such tax to the budget.Value-added Tax Law of Mongolia8 December 1998Regulates the imposition of a value-added tax on imported and exported goods, goods sold, jobs performed, and services rendered in the territory of Mongolia, sale of imported goods by citizens and legal entities in Mongolia, and to payment of value-added tax to the budget.Law of Mongolia Determining the amount of Export Customs Duty to be imposed on Certain Commodities 29 March 1996Imposes specific export customs duties on a number of commodities.Law of Mongolia on Free Zones28 June 2002Regulates the establishment of free zones and their form, powers of governing bodies, monitoring mechanisms, determines the legal basis for and the realization of special tax and custom conditions.Law on the legal status of "Altanbulag" Free Trade Zone2 July 2000Determines the legal status of the Altanbulag zone and regulates issues related to its implementation.Foreign Investment Law of Mongolia 10 May 1993Encourages foreign investment, protects the rights and property of foreign investors in Mongolia, and regulates matters relating to foreign investment.Government Resolution of Mongolia on Approving the Model of the Stability Agreement, No. 4624 March 2001Regulates issues connected with ensuring stable tax conditions during a certain period for business entities with foreign investments engaged in exploration of mineral resources deposits.Copyright Law of Mongolia22 June 1993Regulates matters related to the protection of copyright and use of the works that are subject to copyright.Patent Law of Mongolia25 June 1993Regulates matters related to protection of the rights of authors of inventions, industrial designs, and innovations and of patent owners, and to the use of inventions, industrial designs and innovations.Law of Mongolia on Trade Names and Trademarks19 December 1996Ensures legal guarantees for trade marks and trade names, protects the rights and legal interests of their owners, and regulates issues concerning the ownership, use and disposal of trademarks and trade names.Law of Mongolia Prohibiting Unfair Competition12 May 2000Creates conditions for fair competition on the market among the legal persons engaged in business activities, and regulates matters concerning the legal and organizational basis for prohibition and/or prevention of any activities that are contrary to fair competition.Law on Government Procurement14 April 2000Regulates matters relating to the preparation of bidding documents, advertisement, opening of tenders, evaluation of tenders, and award of contract for public procurement of goods, works and services; composition and organization of Tender Committee, and control over its activities.Constitution of Mongolia13 January 1992The Constitution of MongoliaTable II.1 (cont'd)Civil Code10 January 2002Regulates matters with respect to material and non-material wealth arising between legal persons. Company Law2 July 1999Regulates the establishment, registration and reorganization of a company, its management and organizational structure, the rights and obligations of its shareholders, and its control and liquidation.Law on Licensing1 February 2001Regulates the giving, delaying and invalidating of a licence to business activities that might negatively affect public interest, human well-being, environment, and national security and that might require specific conditions and expertise.Tourism Law5 May 2000Regulates relations between the State, citizens, economic entities and organizations with regard to tourism promotion, engagement in tourism activities, and provision of tourism services on the territory of Mongolia.Banking Law3 September 1996Regulates the licensing of banks, the revocation of licences, the establishment of general principles of a bank's management, organization, and activities, and enforcement measures.Law on Central Bank3 September 1996Establishes the legal grounds of the powers of the Central Bank of Mongolia, its management, organization, and activities, and regulates issues concerning the implementation of state monetary policy undertaken by the Central Bank.Law on Currency Settlements12 May 1994Defines the powers of the Government bodies in charge of currency settlement, regulates exchange controls for currency circulation by business entities, organizations, and citizens, and establishes mechanisms to sustain the Mongolian currency exchange rate.Law on Deposits, Loans and Banking Transactions31 October 1995Regulates matters concerning the depositing of funds with banks by citizens and legal persons, the carrying out of transactions through the agency of banks and operations, and the granting and repayment of bank loans.Law on Non-bank Financial Activities12 December 2002Establishes legal foundations for nonbank financial activities and regulates issues of management, organization, licensing, and suspension or revocation of licences of entities conducting nonbank financial activities.Law on Bills2 November 1995Regulates relations between citizens and business entities concerning the use of bills of exchange and promissory notes as a means of payment.Law on Insurance5 December 1997Defines the legal framework for conducting insurance activities in the territory of Mongolia, regulates relations between insurance companies, citizens, and legal entities, and creates principles for state auditing of insurance activities.Accounting Law13 December 2001Determines the legal grounds for accounting principles, management, and institutions and regulates issues pertaining to the maintenance of accounting records and the preparation of financial statements of the business entity or organization.Securities Law13 October 1994Regulates the issue of securities for the purpose of accumulating capital, the buying and selling of securities, depository arrangements, and clearing and settlement services, the regulation of issuers and other persons involved in the securities market and the protection of investors.Law on Telecommunications16 November 1995Regulates relations between state organizations, service providers, business entities, and individuals engaged in telecommunications and the creation, utilization, and protection of the telecommunications network and telecommunications services in Mongolia.Energy Law1 February 2001Regulates matters relating to energy generation, transmission, distribution, dispatching and supply activities, construction of energy facilities, and energy consumption that involve utilization of energy resources.Minerals Law5 June 997Regulates exploration, mining and related activities within the territory of Mongolia.Petroleum Law18 January 1991Regulates the operations of Mongolian and foreign entities or individuals involved in the exploration for and the protection, processing, transportation, storage, and marketing of petroleum originating in Mongolia.Source: Information provided by the Mongolian authorities. The terms of international treaties to which Mongolia is a signatory may be invoked directly in national courts (Civil Code, Article 2.2). Where the terms of its own national legislation are contrary to provisions of such a treaty, the terms of the international treaty prevail. Based on various international arbitration agreements, such as the New York and Washington Conventions, to which Mongolia is a party, the rights and obligations of parties to international contracts are regulated by the law of any country designated by the contracting parties; thus parties to trade-related contracts are free to choose legal jurisdiction for the contracts. Trade Policy Objectives Mongolia's overall trade policy objectives, as stated in the Action Programme of the Government of Mongolia for 2004-08, are to support economic growth through an active trade policy, promote the industrial, agricultural and services sectors, and increase exports. The Action Programme also aims to change Mongolia's export structure by diversifying export products and markets, and to work towards the establishment of free-trade agreements with Russia, China, and the United States. In light of the upcoming expiry of the Agreement on Textiles and Clothing, Mongolia aims to take measures to exploit new trade opportunities for these products in order to maintain its position in international markets. Mongolia also aims to intensify negotiations with the European Union, Japan, the United States, and other countries to expand the scope of Mongolian products to be covered by their Generalized System of Preferences. Trade Agreements and Arrangements Mongolia and the World Trade Organization Mongolia acceded to the ϲʹ on 29 January 1997. The ϲʹ Agreements have been largely incorporated into Mongolia's domestic law; where parts of the Agreements are not incorporated, the ϲʹ Agreement can be applied directly. Hence, private individuals can invoke the ϲʹ Agreement before national courts. Mongolia is not a signatory to the Agreement on Government Procurement and the Agreement on Trade in Civil Aircraft. Since 1997, Mongolia has made a number of notifications to the ϲʹ (Table II.2). Mongolia bound all its tariffs under GATT 1994 on its accession to the ϲʹ. The majority are bound at a ceiling rate of 20%, which is higher than applied duties (5% for most of goods). It committed to eliminating export subsidies under the Foreign Investment Law for foreign invested enterprises that export more than 50% of their output by 31December 2002. Mongolia also committed to eliminating, within ten years of the date of its accession, an export duty at the rate of not more than 30% ad valorem on the export of raw cashmere. Mongolia made various GATS commitments during its accession (Table IV.3). While it did not participate in the extended negotiations on financial services (Fifth Protocol, adopted 14November 1997) and telecommunications (Fourth Protocol, adopted 30 April 1996), its accession commitments on services covered certain of these subsectors (see Chapter IV(6)). Mongolia has made no MFN exemptions. Mongolia has not been a party to any disputes under the ϲʹ dispute settlement mechanism. Table II.2 Principal notifications under ϲʹ Agreements, as at 20 September 2004 Agreement CommitteeDocument reference and dateRequirement/ContentsAgreement on AgricultureG/AG/N/MNG/6, 09 June 2000Export subsidies under Article 10 and 18.2 of the AgreementG/AG/N/MNG/5, 09 June 2000Domestic support under Article 18.2 of the Agreement (TableD:1 and the relevant supporting tables)G/AG/N/MNG/4, 06 August 1999Domestic support under Article 18.2 of the Agreement (TableD:1 and the relevant supporting tables)G/AG/N/MNG/2, 10 August 1998Domestic support under Article 18.2 of the Agreement (TableD:1 and the relevant supporting tables)Agreement on Textiles and ClothingG/TMB/N/351, 15 May 2000Notification under Article 3.1 of the AgreementG/TMB/N/350, 15 May 2000Notification under Article 6.1 of the AgreementAgreement on Implementation of ArticleVI of the GATT 1994G/ADP/N/1/MNG/1, 16 January 1998Notification of Laws and Regulations under Article18.5 of the AgreementsAgreement on Implementation of ArticleVI of the GATT 1994G/ADP/N/72/Add.1/Rev.1, 12 October 2001Semi-Annual Reports under Article 16.4 of the Agreement RevisionGATT 1994, Understanding on the Implementation of Article XVIIG/STR/N/7/MNG, 09 July 2001State Trading - New and Full Notification Pursuant to ArticleXVII:4(a) of the GATT 1994 and Paragraph 1 of the Understanding on the Interpretation of ArticleXVIIAgreement on Import Licensing ProceduresG/LIC/N/1/MNG/1, 27 April 2001Notification under Article 1.4(a) and 8.2(b) of the AgreementG/LIC/N/3/MNG/1, 12 June 2003Notification under Article 7.3 of the Agreement - Replies to Questionnaire on Import Licensing ProceduresAgreement on Preshipment InspectionG/PSI/N/1/Add.7, 24 February 1998Pre-shipment Inspection - Notifications under Article5 of the Agreement AddendumDecisions of Contracting Parties on GATS Article IIIG/MA/NTM/QR/1/Add.6, 20 September 1999Notifications of Quantitative Restrictions - Note by the Secretariat AddendumG/MA/NTM/QR/1/Add.8, 01 March 2002Notifications of Quantitative Restrictions - Note by the Secretariat AddendumAgreement on Rules of OriginG/RO/N/20/Rev.1, 27 July 1998Notifications under Article 5 and Paragraph 4 of Annex II of the Agreement on Rules of Origin - Costa Rica, Haiti, Maldives, Mongolia RevisionAgreement on Subsidies and Countervailing MeasuresG/SCM/N/60/MNG G/SCM/N/71/MNG G/SCM/N/95/MNG, 06 September 2004Subsidies - Updating New and Full Notifications Pursuant to Article XVI:1 of the GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing MeasuresG/SCM/N/68/Add.1/Rev.1, 16 October 2001Semi-Annual Reports under Article 25.11 of the Agreement RevisionG/SCM/N/1/MNG/2, 06 September 2004Notification of Laws and Regulations under Article32.6 of the AgreementG/SCM/N/1/MNG/1, 14 January 1998Notification of Laws and Regulations under Article18.5 and 32.6 of the AgreementsAgreement on SafeguardsG/SG/N/1/MNG/1, 14 January 1998Notifications of Laws, Regulations and Administrative Procedures Relating to Safeguard MeasuresAgreement on Sanitary and Phytosanitary MeasuresG/SPS/N/MNG/2, 05 March 2004Notification of Emergency Measures - Chicken and chicken productsAgreement on Technical Barriers to TradeG/TBT/CS/N/65, 21 March 1997Notification under Paragraph (c) of the ϲʹ TBT Code of Good Practice (Notification of acceptance of the ϲʹ TBT Code of Good Practice)G/TBT/10.7/N/17, 05 September 1997NotificationTable II.2 (cont'd)G/TBT/10.7/N/18, 05 September 1997NotificationG/TBT/2/Add.44, 29 January 1998Implementation and Administration of the Agreement on Technical Barriers to Trade - Addendum - Communication from MongoliaAgreement on Trade-Related Investment MeasuresG/TRIMS/N/2/Rev.8, 19 July 2000Notifications under Article 6.2 of the TRIMs Agreement of Publications in which TRIMs may be Found RevisionAgreement on Trade-Related Aspects of Intellectual Property RightsIP/N/6/MNG/1, 09 November 1998Checklist of Issues on Enforcement Responses from MongoliaIP/N/1/MNG/C/1/Rev.1, 30 October 1998Main Dedicated Intellectual Property Laws and Regulations Notified under Article 63.2 of the Agreement RevisionIP/N/1/MNG/1/Add.1, 16 July 1998Notification of Laws and Regulations under Article 63.2 of the Agreement AddendumIP/N/3/Rev.2/Add.9, 11 May 1998Notification of Contact Points under Article 69 of the Agreement - Note by the Secretariat - AddendumSource: ϲʹ Notifications. Other trade arrangements Mongolia has not concluded any regional trade agreements. Nor is it a member of the Asia Pacific Economic Cooperation (APEC). The authorities consider that joining the Bangkok Agreement would offer concrete advantages to Mongolia. Mongolia is currently a beneficiary of the Canadian, EU, Japanese and U.S. preferential schemes under the Generalized System of Preferences. The authorities are concerned that the envisaged full integration of textiles into the multilateral trading system by the end of 2004 would promote relocation abroad of joint ventures in the textiles sector. Mongolia is negotiating a Transit Transport Framework Agreement with China and Russia to aid the transit of Mongolian products through its neighbouring countries to third countries. The authorities expect that this would help to make the transit of Mongolian exports in the North-East Asian region more efficient, which would improve the international competitiveness of Mongolian products destined for third countries. Mongolia has concluded various bilateral trade-related arrangements (TableII.3). In July 2004, Mongolia signed an Agreement Concerning the Development of Trade and Investment Relations between the Government of Mongolia and the Government of the United States (Trade and Investment Framework Agreement (TIFA)); the TIFA establishes a Mongolia-U.S. joint council on trade and investment. The Government is considering the possibility of negotiating freetrade agreements with its major trading partners, such as the European Union, Japan, the Republic of Korea, and the United States. Table II.3 Mongolia's bilateral trade arrangements AgreementDateDescriptionTrade Agreement between the Government of Mongolia and the Government of Japan1 March 1990Accords MFN treatment with regard to customs duties, clearance and products of both parties in the territory of the other party, establishes a mixed commission to examine the problems arising from the implementation of the agreement.Trade Agreement between the Government of Mongolia and the Government of Lao PDR 25 December 1990Accords MFN to trade between the two countries and provides for dispute settlement, transportation, settlement of payments.Trade Agreement between the Government of Mongolia and the Government of the PR of China1991..Agreement concerning Trade Relations between the Government of Mongolia and the Government of the United States23 January 1991Accords MFN treatment and non-discriminatory conditions for products, customs duties, market access for goods and services, provides for trade expansion and promotion, promotion of intellectual property, framework for further economic cooperation.Agreement between Mongolia and Russia/the Soviet Union on Trade and Economic Cooperation 12 February 1991Covers the development of trade and economic cooperation, promotion of investment, cooperation in establishing economic zones, the development of transit transportation, the increase of the exchange of goods, the increase and expansion of border trade and economic relations; a joint commission was established to monitor the implementation of the agreement. Trade Agreement between the Government of Mongolia and the Government of the Rep. of Korea 28 March 1991Accords MFN and national treatment, non-discrimination with regard to imports from both countries, facilitates transit transportation, provides for dispute settlement.Trade and Economic Cooperation Agreement between the Government of Mongolia and the Government of Bulgaria1 May 1991Accords MFN treatment to trade and economic cooperation, including customs tariffs, transportation, provides for the negotiation of bilateral agreements on investment promotion and protection, avoidance of double taxation, exchange of information with regard to economic activities, investment, taxation, banking, insurance, etc.Agreement between the Government of Mongolia and the Government of the PR of China on the Access to Sea and Transit Transportation by Mongolia through the territory of the PRC 26 August 1991Recognizes the rights of Mongolia to access the sea and transit goods through the territory of PRC, sets out general rules for transiting poisonous and perishable goods, restricts transit transportation of narcotic drugs, infectious micro-organisms, etc.; also sets rules for charges related to transit transportation.Trade Agreement between the Government of Mongolia and the Government of NepalJanuary 1992Accords MFN treatment; parties undertake to facilitate transportation.Trade and Economic Cooperation Agreement between the Government of Mongolia and the Government of the Republic of Belarus24 January 1992Accords MFN treatment to economic and trade cooperation, including transit transportation, customs tariffs.Agreement between the Government of Mongolia and the Government of India on Trade and Economic Cooperation17 April 1992Promotes economic and technical cooperation between Mongolia and India, includes Mongolia in technical cooperation programme.Trade, Economic and Technical Cooperation Agreement between the Government of Mongolia and the Government of Turkey29 May 1992Accords MFN treatment, non-discrimination, identifies sectors for cooperation such as agriculture, industry, SMEs, construction, transportation, free zones, etc.; provides for dispute settlement.Agreement between Mongolia and the EEC on Trade and Economic Cooperation16 June 1992Accords MFN treatment with regard to imports, exports and re-exports of all goods exchanged between Mongolia and the Community, identifies sectors of economic cooperation, including industry, mining, agriculture, science, energy, communication, environmental protection, tourism, intellectual property, standards, and statistics.Agreement between the Government of Mongolia and the Government of the Russian Federation on Mongolia's Access to the Sea by transiting through Russian Territory19 October 1992Covers the rights of Mongolia on free movement of transit transportation, utilization of sea ports, freight storage, reshipment, application of Russian domestic tariffs on transportation and compliance by both parties with tariffs imposed under international agreements to which both countries are parties. Table II.3 (cont'd)Trade and Economic Cooperation Agreement between the Government of Mongolia and the Government of the Republic of Kazakhstan27 October 1992Accords MFN treatment to trade and economic cooperation, including customs, transit transportation; establishes Intergovernmental Commission.Agreement between the Government of Mongolia and the Government of Austria Concerning Economic Cooperation15 December 1992Promotes economic cooperation and identifies sectors of cooperation such as energy, roads, construction, railways, etc.; establishes a Joint Commission to monitor the implementation of the agreement.Trade and Economic Cooperation Agreement between the Government of Mongolia and the Government of Kyrgyz Republic 10 July 1993Accords MFN treatment to trade and economic cooperation, as well as transit transportation and customs services.Trade and Commerce Agreement between the Government of Mongolia and the Government of Canada8 June 1994Accords MFN treatment with regard to tariffs and other export and import charges, provides for facilitation of transit transportation, transparency of information and settlement of disputes.Agreement between the Government of Mongolia and the EEC on Trade in Textiles 31 December 1997Applies to trade in textile products originating from Mongolia, sets limits to its exports to the Community.Trade Agreement between the Government of Mongolia and the Government of Viet Nam13 December 1999Accords MFN to trade, transportation, customs and taxation, provides for transit transportation through the territories of the parties, as well as for dispute settlement.Trade Agreement between the Government of Mongolia and the Government of Cuba9 November 2001Accords MFN to exchange of goods and services, provides for the promotion of activities related to fairs, exhibitions, and other trade activities, recognizes that sanitary and phytosanitary requirements do not necessarily create barriers to trade, establishes intergovernmental Commission, sets non-discriminatory principles with regard to trade between the two countries.Agreement between the Government of Mongolia and the Government of the United States concerning the Development of Trade and Investment Relations/TIFA15 July 2004Establishes Joint Trade and Investment Council and provides for further development of trade and investment relations between the two countries... Not available. Note: This list does not include bilateral agreements between Mongolia and its trading partners concerning customs cooperation, quality certification of goods, general economic and technical cooperation, investment, and double taxation. Source: Information provided by the Mongolian authorities. Foreign Investment Regime The main law governing foreign investment in Mongolia is the Foreign Investment Law. Under this law, wholly foreign-owned business entities are allowed; inward foreign direct investment (FDI) receives national treatment. No restriction is imposed on the size and content of FDI into Mongolia, except that the production of weapons is prohibited. Foreign nationals or companies are not allowed to own land in Mongolia; they can lease land for up to 60 years. FDI into Mongolia cannot be legally expropriated. Foreign investors can remit income, profits and payments out of Mongolia without any barriers; they are subject to a 20% withholding tax. The Foreign Investment and Foreign Trade Agency (FIFTA) is responsible for foreign investment policy formulation and implementation. Mongolia has concluded agreements on avoidance of double taxation with 31 countries. It has also signed agreements on Mutual Protection and Promotion of Investments with 34 countries. Mongolia is a signatory of the Multilateral Investment Guarantee Agency. Trade-Related Technical Assistance Technical assistance from various sources has been instrumental in supporting Mongolia's transition to a market-based economy and open trade regime. For example, Germany has been providing technical assistance on trade policy and ϲʹ issues through and International Trade Policy/ϲʹ project in collaboration with the Mongolian Ministry of Industry. Various other countries and agencies, including the Asian Development Bank, United Nations Development Programme, United Nations Industrial Development Organization, Japan, United States Agency for International Development, World Bank, and the ϲʹ have also provided trade-related technical assistance to Mongolia. The ϲʹ's technical assistance has focused on increasing government officials' understanding of ϲʹ-related issues. Since 1997, Mongolia has participated in some 52 regional and 11 national training activities, which have covered many ϲʹ subjects. Mongolia also took part in ϲʹ Global Workshops on: scheduling of commitments under GATS (in 2002); training of trainers and labelling (in 2003); domestic regulation for services, and technical barriers to trade (in 2004); and cross-border supply of services (in 2005). Mongolian officials participated in the 2004 edition of the 12-week ϲʹ trade policy course and the 10th Specialized Dispute Settlement Course held in Geneva. While past assistance from these sources has been valuable, it would appear that further efforts might be required in a number of areas. As study conducted by the Asian Development Bank, at the request of the Ministry of Industry and Trade, drew up a list of technical assistance still needed. Examples of needs identified in the study include assistance concerning : trade remedy measures, rules of origin (if Mongolia is to conclude any free trade agreements), economic costs and benefits of export taxes, duty exemption facility, export development functions, competitiveness of transport sector, and further analysis of trade negotiations. In addition, the authorities consider that further efforts are also required in a number of areas including: training on ϲʹ rules and regulations as well as Mongolia's commitments for new members of Parliament, who were elected in June 2004; training on dispute settlement mechanism for lawyers; and capacity building on the multilateral trading system for academic institutions. Mongolia also wishes to participate in the Joint Integrated Technical Assistance Programme, which has been organized by the ϲʹ, the United Nations Conference on Trade and Development, and the International Trade Centre.  The most recent parliamentary election was held on 27 June 2004.  Parliament may dissolve itself if two thirds or more of its members agree to do so; the President, in consultation with the Chairman of Parliament, may also propose to do so.  These include the President of Mongol Bank and members of the Constitutional Court.  The President can be re-elected only once. The President is also a head of the armed forces.  Presidential candidates must be at least 45 years of age, be born Mongolian, and have resided in Mongolia in the five recent years.  The dissolution of the Government entails the resignation of the Prime Minister and all other ministers.  If Parliament decides that such decrees are inconsistent with laws, it may declare them void.  Administrative courts were created at the end of 2002 to adjudicate administrative disputes involving the Government and its agencies. There are 21 such courts in Mongolia.  The Constitutional Court consists of nine members appointed by Parliament for six-years; three members are nominated by Parliament, three by the President, and the remaining three by the Supreme Court. The Constitution guarantees private property rights as provided by various laws (Articles 6 and 16).  This Law terminated the previous Law on the Composition of the previous Government of Mongolia (enacted on 3 August 2000).  The Bangkok Agreement involves a preferential tariff arrangement among members; current members are Bangladesh, China, India, Republic of Korea, Lao People's Democratic Republic, and Sri Lanka. The ESCAP functions as the secretariat for the Agreement.  The Foreign Investment Law was adopted in 1991. Subsequently, the minimum amount for foreign investment was set at US$10,000. FDI in the banking sector is covered under the Banking Law.  These are: Belarus, Belgium, Bulgaria, Canada, China, Czech Republic, Egypt, France, Germany, Hungary, India, Indonesia, Italy, Kazakhstan, Kuwait, Kyrgyz Republic, Luxembourg, Korea, Malaysia, Netherlands, Poland, Romania, Russian Federation, Singapore, Switzerland, Turkey, Ukraine, United Arab Emirates, United Kingdom, Uzbekistan, and Viet Nam.  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