WT/TPR/S/406/Rev.1  
27 May 2021  
(21-4336) Page: 1/150 
Trade Policy Review Body   
 
  
TRADE POLICY REVIEW  
REPORT BY THE SECRETARIAT  
MONGOLIA  
Revision  
This report, prepared for the Third Trade Policy Review of Mongolia, has been drawn up by the WTO 
Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing 
the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World 
Trade Organization), sought clarification from Mongolia on its trade policies and practices.  
 
Any technical questions arisin g from this report may be addressed to: Mr. Masahiro Hayafuji 
(tel.: 022 739 5873), Mr. Pierre Latrille (tel.:  022 739 5266), and Mrs. Denby Probst (tel.: 022 739 
5847).  
 
Document WT/TPR/G/ 406/Rev.1  contains the policy statement submitted by Mongolia.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report was drafted in English.   WT/TPR/S /406/Rev.1  • Mongolia  
 
- 2 - 
 
  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  8 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  13 
1.1   Recent Economic Developments  ................................ ................................ ................... 13 
1.2   Trade Performance  ................................ ................................ ................................ .....18 
1.2.1    Composition of trade  ................................ ................................ ................................ 18 
1.2.2    Direction of trade  ................................ ................................ ................................ .....18 
1.3   Trade in Services  ................................ ................................ ................................ ........ 20 
1.4   Foreign Direct Investment  ................................ ................................ ........................... 21 
2   TRADE AND INVESTMENT REGIMES ................................ ................................ ...........  23 
2.1   General Framework  ................................ ................................ ................................ ....23 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ........ 25 
2.2.1    Trade -related law  ................................ ................................ ................................ ....26 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 28 
2.3.1    WTO ................................ ................................ ................................ ...................... 28 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 29 
2.3.3    Other agreements and arrangements  ................................ ................................ ......... 29 
2.4   Investment Regime  ................................ ................................ ................................ ....30 
3   TRADE POLICIES AND PRACTICES BY MEASURE  ................................ ........................  35 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 35 
3.1.1    Customs procedures, valuation, and requirements  ................................ ....................... 35 
3.1.1.1    Trade facilitation  ................................ ................................ ................................ ...36 
3.1.1.2    Customs valuation  ................................ ................................ ................................ 38 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 39 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 41 
3.1.3.1    Bound and applied rates  ................................ ................................ ........................ 42 
3.1.3.2    Duty exemptions ................................ ................................ ................................ ...45 
3.1.3.3    Preferential tariffs  ................................ ................................ ................................ .50 
3.1.4    Other charges affecting imports  ................................ ................................ ................. 50 
3.1.4.1    VAT ................................ ................................ ................................ ..................... 50 
3.1.4.2    Excise  ................................ ................................ ................................ .................. 52 
3.1.5    Import p rohibitions, restrictions, and licensing  ................................ ............................ 54 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 59 
3.1.7    Other measures affecting imports  ................................ ................................ .............. 59 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 60 
3.2.1    Customs procedures and requirements  ................................ ................................ .......60 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 61 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 61 
3.2.4    Export support and promotion  ................................ ................................ ................... 63 
3.2.5    Export finance, insurance, and guarantees  ................................ ................................ ..64 WT/TPR/S /406/Rev.1  • Mongolia  
 
- 3 - 
 
  3.3   Measures Affecting Production and Trade  ................................ ................................ .......65 
3.3.1    Incentives  ................................ ................................ ................................ ............... 65 
3.3.2    Standards and other technical requirements  ................................ ............................... 66 
3.3.2.1    Framework  ................................ ................................ ................................ ........... 67 
3.3.2.2    Standards, technical regulations, and conformity assessment  ................................ .....70 
3.3.2.3    WTO and international conventions or cooperation  ................................ .................... 71 
3.3.3    Sanitary and phytosanitary requirements  ................................ ................................ ....71 
3.3.3.1    Policy  ................................ ................................ ................................ .................. 72 
3.3.3.2    Framew ork ................................ ................................ ................................ ........... 72 
3.3.3.3    Technical assistance, WTO, and international cooperation  ................................ .......... 75 
3.3.4    Competition policy and price controls  ................................ ................................ ......... 75 
3.3.5    State trading, state -owned enterprises (SOEs), and privatization  ................................ ...76 
3.3.6    Government procurement  ................................ ................................ ......................... 79 
3.3.7    Intellectual property rights  ................................ ................................ ........................ 80 
3.3.7.1    Overview  ................................ ................................ ................................ ............. 80 
3.3.7.2    Copyright and related rights  ................................ ................................ ................... 82 
3.3.7.3    Industrial property  ................................ ................................ ................................ 82 
3.3.7.3.1    Overview  ................................ ................................ ................................ .......... 82 
3.3.7.3.2    Trademarks and geographical indications  ................................ .............................. 83 
3.3.7.3.3    Design protection  ................................ ................................ ............................... 83 
3.3.7.3.4    Patents  ................................ ................................ ................................ ............. 83 
3.3.7.3.5    Utility models  ................................ ................................ ................................ ....84 
3.3.7.3.6    Plant variety protection  ................................ ................................ ....................... 84 
3.3.7.4    Enforcement  ................................ ................................ ................................ ......... 84 
4   TRADE POLICIES BY SECTOR  ................................ ................................ .....................  85 
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ ............... 85 
4.1.1    Agriculture  ................................ ................................ ................................ .............. 85 
4.1.1.1    Production and trade  ................................ ................................ ............................. 86 
4.1.1.2    Policy and legal framework  ................................ ................................ ..................... 89 
4.1.1.3    Subsidies/support programmes  ................................ ................................ .............. 92 
4.1.1.4    Key sectors  ................................ ................................ ................................ .......... 95 
4.1.1.4.1    Cashmere  ................................ ................................ ................................ ......... 95 
4.1.1.4.2    Livestock  ................................ ................................ ................................ ........... 97 
4.2   Mining  and Energy  ................................ ................................ ................................ ......99 
4.2.1    Mining  ................................ ................................ ................................ .................... 99 
4.2.2    Energy  ................................ ................................ ................................ .................  104 
4.2.2.1    Overview  ................................ ................................ ................................ ...........  104 
4.2.2.2    Hydrocarbons  ................................ ................................ ................................ ..... 106 
4.2.2.2.1    Coal ................................ ................................ ................................ ...............  106 
4.2.2.2.2    Gas ................................ ................................ ................................ ................  106 WT/TPR/S /406/Rev.1  • Mongolia  
 
- 4 - 
 
  4.2.2.2.3    Oil ................................ ................................ ................................ ..................  106 
4.2.2.3    Electricity  ................................ ................................ ................................ ...........  108 
4.3   Manufacturing  ................................ ................................ ................................ ..........  113 
4.4   Services  ................................ ................................ ................................ ..................  116 
4.4.1    Financial services  ................................ ................................ ................................ ... 116 
4.4.1.1    Overview  ................................ ................................ ................................ ...........  116 
4.4.1.2    Banking services  ................................ ................................ ................................ . 117 
4.4.1.3    Insurance  ................................ ................................ ................................ ..........  121 
4.4.1.4    Securities and stock market services  ................................ ................................ ..... 122 
4.4.2    Legal services  ................................ ................................ ................................ ....... 123 
4.4.3    Telecommunications  ................................ ................................ ...............................  124 
4.4.4    Transport  ................................ ................................ ................................ ..............  127 
4.4.4.1    Overview  ................................ ................................ ................................ ...........  127 
4.4.4.2    Air transport  ................................ ................................ ................................ ....... 128 
4.4.4.3    Rail transport  ................................ ................................ ................................ ..... 133 
4.4.4.4    Road transport  ................................ ................................ ................................ ... 135 
4.4.4.5    Maritime transport  ................................ ................................ ..............................  136 
4.4.5    Tourism  ................................ ................................ ................................ ................  138 
5   APPENDIX TAB LES ................................ ................................ ................................ .. 142  
 
CHARTS  
 
Chart 1.1 Product composition of merchandise trade, by main HS group, 2013 and 2019  ............ 19 
Chart 1.2 Direction of merchandise trade, 2013 and 2019  ................................ ....................... 20 
Chart 1.3 FDI inflows and stocks, 2000 -19 ................................ ................................ ............ 22 
Chart 3.1 Use of different customs valuation methodologies, 2013 -19 ................................ ......39 
Chart 3.2 Rules of origin for MFN trade  ................................ ................................ ................. 40 
Chart 3.3 Average applied MFN and bound rates, by HS section, 2013 and 2020  ........................ 43 
Chart 3.4 Distribution of MFN tariff rates, 2020  ................................ ................................ ......45 
Chart 4.1 Agricultural land, 2019  ................................ ................................ ......................... 85 
Chart 4.2 Gross output of livestock and crops, 2013 -19 ................................ .......................... 86 
Chart 4.3 Livestock, 2013 -19 ................................ ................................ .............................. 99 
Chart 4.4 Exploration and mining licences granted, 2013 -20 ................................ .................  104 
Chart 4.5 Key fiscal instruments  ................................ ................................ ........................  104 
Chart 4.6 Key energy statistics, 2012 -18 ................................ ................................ ............  105 
Chart 4.7 Total energy supply (TES) by source  ................................ ................................ .... 105 
Chart 4.8 Electricity generation, by source, 2012 and 2018  ................................ ...................  109 
Chart 4.9 Passenger flights, January to August 2019 and 2020 ................................ ..............  133 
Chart 4.10 Fleet by type of ship, 2013 -19 ................................ ................................ ...........  137 
Chart 4.11 International tourism arrivals ('000), January to September, 2019 and 2020  ...........  141 
 WT/TPR/S /406/Rev.1  • Mongolia  
 
- 5 - 
 
  TABLES  
 
Table 1.1 Selected macroeconomic indicators, 2014 -19 ................................ .......................... 14 
Table.1.2 GDP, by economic activity and employment, 2014 -19 ................................ .............. 14 
Table 1.3 Balance of payments, 2014 -19 ................................ ................................ .............. 16 
Table 1.4 Trade in Services, 2014 -19 ................................ ................................ ................... 20 
Table 2.1 Government ministries and selected agencies, September 2020  ................................ 23 
Table 2.2 Main trade -related laws  ................................ ................................ ........................ 26 
Table 2.3 Bilateral trade -related agreements since a ccession to the WTO  ................................ ..30 
Table 2.4 Bilateral investment treaties  ................................ ................................ .................. 32 
Table 2.5 Foreign investment restrictions, 2020  ................................ ................................ .....34 
Table 3.1 Customs fees  ................................ ................................ ................................ ......36 
Table 3.2 Overview of TFA category commitments notified  ................................ ...................... 37 
Table 3.3 Seasonal tariff rates  ................................ ................................ ............................. 42 
Table 3.4 Structure of the tariff schedule, 2013 and 2020  ................................ ....................... 42 
Table 3.5 MFN applied summary, 2020  ................................ ................................ ................. 44 
Table 3.6 Customs tax exemptions enacted during 2013 -20 ................................ .................... 46 
Table 3.7 Customs duty and VAT exemptions for the diagnosis and treatment of COVID -19 ........ 47 
Table 3.8 Exemptions from duties and VAT  ................................ ................................ ........... 47 
Table 3.9 Duty exemptions for equipment and spare parts of certain SME sectors, 2017 -18 ........ 48 
Table 3.10 Summary analysis of preferential tariffs, 2020 -21 ................................ .................. 50 
Table 3.11 VAT  exemptions, 2020  ................................ ................................ ........................ 51 
Table 3.12 Excise taxes, 2020  ................................ ................................ ............................. 53 
Table 3.13 List of prohibited goods, 2020  ................................ ................................ .............. 56 
Table 3.14 List of strategic food items, 2020  ................................ ................................ ......... 57 
Table 3.15 Restricted goods subject to import licensing, 2020  ................................ ................. 58 
Table 3.16 Export duty for certain commodities, 2020  ................................ ............................ 61 
Table 3.17 Specific export tax, 2020  ................................ ................................ .................... 61 
Table 3.18 List of goods prohibited to export, 2020  ................................ ................................ 62 
Table 3.19 Restricted goods subject to export licensing, 2020  ................................ ................. 62 
Table 3.20 Main laws or resolutions on standards, 2020  ................................ .......................... 68 
Table 3.21 List of standards and technical reg ulations, adopted 2015 -20 ................................ ..70 
Table 3.22 Main laws or resolutions on SPS measures, 2020  ................................ ................... 73 
Table 3.23 State -owned companies, by sector, 2020  ................................ .............................. 77 
Table 3.24 Government procurement, based on procurement methods, 2014 -19 ....................... 80 
Table 3.25 Annual statistics on IPR Protection, Applications , 2014 -18 ................................ .......81 
Table 3.26 Annual st atistics on IPR Protection, Registrations , 2013 -19 ................................ .....81 
Table 3.27 Membership in WIPO -administered treaties  ................................ ........................... 81 
Table 3.28 Payable fees  ................................ ................................ ................................ ......83 
Table 3.29 IP enforcement statistics, 2013 -19 ................................ ................................ .......84 
Table 4.1 Production of selected agricultural products, 2013 -19 ................................ ............... 87 WT/TPR/S /406/Rev.1  • Mongolia  
 
- 6 - 
 
  Table 4.2 Main agricultural exports and imports, 2013 -19 ................................ ....................... 88 
Table 4.3 Agricultural programmes and policies, 2013 -19 ................................ ....................... 90 
Table 4.4 Main legislation, 2020  ................................ ................................ ........................... 92 
Table 4.5 Main agricultural subsidy funds or supports  ................................ ............................. 94 
Table 4.6 Agricultural subsidies, expenditures, 2013 -19 ................................ .......................... 95 
Table 4.7 Cashmere exports, 2013 -19 ................................ ................................ .................. 97 
Table 4.8 Estimated mineral reserves and resources, and their global rankings  .......................... 99 
Table 4.9 Mining produ ction, 2013 -19................................ ................................ .................  100 
Table 4.10 Total FDI inflows and inward stock in the mining and quarrying sector , 2014 -19 ...... 100 
Table 4.11 Exports of the main HS 4 -digit mineral products (HS section 5), 2013 -19 ...............  101 
Table 4.12 Oil exploration licenses, 2020  ................................ ................................ ............  107 
Table 4.13 Oil, crude oil, and oil products production, imports, and exports, 2012 -19 ...............  108 
Table 4.14 Electricity indicators, 2012 -19................................ ................................ ............  109 
Table 4.15 Number of consumers b y grid  ................................ ................................ ............  110 
Table 4.16 Detailed indicators and objectives of the state policy on energy, 2015 -30 ...............  111 
Table 4.17 Electricity capacity expansion plans, 2020 -24 ................................ ......................  112 
Table 4.18 Gross manufacturing output, 2013 -19 ................................ ................................  113 
Table 4.19 Imports and exports of key manufactured goods, 2013 -19 ................................ .... 114 
Table 4.20 Manufacturing programmes, 2013 -20 ................................ ................................ . 115 
Table 4.21 Main economic indicators of the financial services sector, 2014 -19 .........................  117 
Table 4.22 Main statistical indicators of the banking system, 2019  ................................ .........  117 
Table 4.23 Lending and securities portfolios of the banking system, 2014 -19 ..........................  117 
Table 4.24 Key ind icators of the telecommunications sector, 2017 and (2019)  .........................  124 
Table 4.25 Pricing data for mobile telephony, 2019  ................................ ..............................  126 
Table 4.26 Pricing data for fixed -broadband telephony, 2019  ................................ .................  127 
Table 4.27 Key indicators of the transport sector, 2013 -19 ................................ ...................  127 
Table 4.28 Air transport selected indicators, 2013 -19 ................................ ...........................  128 
Table 4.29 Main indicators for certified Mongolian air transport carriers  ................................ .. 130 
Table 4.30 Air transport agreeme nts ................................ ................................ ..................  131 
Table 4.31 Key indicators of the railway transport in Mongolia, 2013 -19 ................................ . 133 
Table 4.32 Composition of the railway freight traffic, 2013 -19 ................................ ...............  134 
Table 4.33 Road transport selected indicators, 2013 -19 ................................ ........................  135 
Table 4.34 Carrying capacity by type of ship , 2013 -19 ................................ ..........................  137 
Table 4.35 Main indicators of tourism services, 2014 -19 ................................ .......................  138 
 
BOXES  
 
Box 2.1 Investment framework, 2020  ................................ ................................ ................... 31 
Box 3.1 Goods exempt from customs duties  ................................ ................................ .......... 45 
Box 4.1 Agricultural policy, objectives for the livestock and crop subsectors  .............................. 91 
Box 4.2 Cashmere industry structure, 2020  ................................ ................................ ........... 95 WT/TPR/S /406/Rev.1  • Mongolia  
 
- 7 - 
 
  Box 4.3 Industrial policy objectives  ................................ ................................ ....................  115 
Box 4.4 Main economic indicators of the insurance sector  ................................ .....................  121 
Box 4.5 Main indicators for securities  and stock market services, 2014 -19 ..............................  122 
Box 4.6 Market structure of telecommunications  ................................ ................................ .. 124 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports, by HS section and major HS chapter, 2013 -19 ......................  142 
Table A1.2 Merchandise imports, by HS section and major HS chapter, 2013 -19 ......................  143 
Table A1.3 Merchandise exports, by destination, 2013 -19 ................................ .....................  144 
Table A1.4 Merchandise impor ts, by origin, 2013 -19 ................................ ............................  145 
Table A1.5 Total inward direct investment stocks, by sector , 2014-19 ................................ .... 146 
Table A1.6 Total inward direct investment inflow, by sector , 2014-19 ................................ ..... 147 
 
 
Table A2.1 Selected notifications to the WTO, 1 January 2015 -31 October 2020  ......................  148 
 
 
Table A3.1 Tariff lines where the MFN applied rate exceeds the bound rate, 2020  .............   ...... 149 
 
 
  WT/TPR/S /406/Rev.1  • Mongolia  
 
- 8 - 
 
  SUMMARY  
1. Since its previous Review in 2014, Mongolia has maintained a generally open trade regime, 
and the economy expanded between 2014 and 2019. In 2019, the economy grew by 5.1%, with an 
improvement in the fiscal balance and an increase in both reserves and GDP per capita. However, 
affected by the COVID -19 pandemic, exports declined by 40% year -on-year in the first quarter of 
2020, and the economy contracted 9.7% in the first half of 2020. Inflation p rogressed slowly, 
reflecting an increase in food and utilities prices. The unemployment rate has decreased since 2016, 
and stood at 7.8% in 2018. Exports, imports, and FDI grew between 2017 and 2019. Mongolia was 
ranked 92nd overall in the 2019 United Nati ons Development Programme Human Development 
Index, up from 108th in 2012. In terms of value -added, the share of services has declined since 
2016, to account for 44.8% of GDP in 2019. The share of mining has increased since 2015 to reach 
26.0% of GDP in 2019, and that of manufacturing has increased to 10.5%. The share o f services in 
total employment increased to 53.1% in 2019, while that of agriculture decreased to 25.3%.  
2. The COVID -19 pandemic gave rise to urgent budget and balance -of-payments needs. In 
response, Mongolia adopted a relief package on 9 April 2020 to provi de support for those affected 
by the economic downturn. The fiscal measures taken by the Government are estimated to be around 
8.9% of GDP. On the monetary policy front, the Bank of Mongolia (central bank) purchased bonds 
to help finance a debt -relief sche me for the elderly, resumed the purchase of mortgage -backed 
securities, and provided zero -interest -rate short -term loans to banks.  
3.  Mongolia's current account deficit increased between 2017 and 2019. Its main export 
destination is China, and its main expor t products are minerals; this structure has remained largely 
unchanged since the previous Review. In 2019, machinery and electrical equipment, transport 
equipment, and mineral fuels were the main imports; the share of transport equipment increased 
between 2013 and 2019. In the same time -frame, China's, Japan's, and the Russian Federation's 
shares in Mongolia's imports increased, while those of the European Union, the Republic of Korea, 
and the United States declined. The authorities continue to aim at explo iting mineral deposits of 
strategic importance, while also diversifying export products, in order to reduce dependence on 
mineral resources.  
4. Mongolia introduced a number of national programmes that address trade policy, including 
the Action Plan of the Gov ernment for 2016 -2020, the Mongolia Sustainable Development Vision 
2030, and the Action Plan of the Government for 2020 -24. In 2019, the Export Promotion Council, 
chaired by the Foreign Minister, was created to coordinate intersectoral activities. The Mini stry of 
Foreign Affairs is responsible for developing and monitoring the overall implementation of trade 
policy. In addition to the Ministry of Foreign Affairs, several other government ministries and 
agencies are responsible for different aspects of trade  policy.  
5. A WTO Member since 1997, Mongolia ratified the Trade Facilitation Agreement in 2016, and 
took steps to participate in the WTO's plurilateral initiatives. As part of its WTO accession, it made 
commitments regarding the Agreement on Government Procu rement (GPA), and has been an 
observer to the GPA Committee since 1999. In 2018, it took steps to join the WTO Agreement on 
Trade in Civil Aircraft. Mongolia has never used the WTO's dispute settlement mechanism. While it 
made some important notifications on rules of origin, technical barriers to trade, and free trade 
agreements, there remain some notifications outstanding, such as on customs valuation, 
quantitative restrictions, import licensing, and agriculture.  
6. During the review period, Mongolia conclude d its first two free trade agreements: an Economic 
Partnership Agreement (EPA) with Japan, which entered into force in 2016; and the Asia -Pacific 
Trade Agreement (APTA), which is expected to come into force for Mongolia in January 2021. These 
agreements re present a departure from Mongolia's previous policy, whereby the WTO multilateral 
agreement was essentially its only trade agreement. The EPA is comprehensive, with a long 
implementation period until 2036. The APTA is expected to reduce tariff barriers by 30% on some 
10,000 products for export, while Mongolia reduced import tariffs on 366 HS 6 -digit tariff lines. 
Mongolia also concluded the US -Mongolia Agreement on Transparency in Matters Related to 
International Trade and Investment, which entered into for ce in March 2017.  
7. Mongolia considers that foreign direct investment is important for its development, and it 
recently implemented policy initiatives to increase domestic and foreign investment, restore foreign WT/TPR/S /406/Rev.1  • Mongolia  
 
- 9 - 
 
  investor confidence, and create a favourable l egal environment for foreign investors. The National 
Development Agency was designated as the State's administrative body in charge of investment 
matters in 2016; it set up the One -Stop Service Centre to facilitate the delivery of public services to 
invest ors in 2019. The legal framework for investment, including the 2013 Investment Law, bilateral 
investment treaties, and investment restrictions, did not change significantly. The Investor 
Protection Council was established in 2016 to oversee the legal right s and interests of investors. 
Mongolia actively encourages investment in certain sectors, such as innovative technologies and 
downstream processing sectors. It offers tax and non -tax incentives to attract potential investors. 
During the review period, FDI inflow increased. FDI was mainly in mining and quarrying.  
8. The Customs Law, 2008, and the Law on Customs Tariffs and Customs Taxes, 2008, remain 
the main legislation on customs matters. They underwent revision during the review period to align 
with other legislation that implements the single window system, electronic data exchange, and 
advance rulings. Since 2010, the Customs Automated Information System (CAIS) has been used as 
the main system for the electronic clearance of goods. In 2016, a projec t was launched to build a 
new CAIS and implement a single window application.  
9. As a landlocked country, Mongolia has a particular interest in trade facilitation work at the 
WTO, as it is especially impacted by transit and border cooperation matters. It acti vely participated 
in the Trade Facilitation Agreement negotiating phase, and it embarked on a process of streamlining 
and simplifying procedures and regulations at its borders. A number of trade facilitating measures 
were implemented, including risk manage ment, electronic payment systems, the authorized 
economic operator programme, and customs cooperation. Mongolia committed to implement 
15 Category B and C commitments by 2020; as at September 2020, 6 had been implemented.  
10. Rules on customs valuation are con tained in the Law on Customs Tariffs and Customs Taxes, 
2008, and did not undergo any significant modification. Mongolia has six different methodologies for 
determining customs value that largely reflect those in the WTO Customs Valuation Agreement. 
Transa ction value remains the primary method of valuation, accounting for 84% of declarations in 
2019. The Law also provides the main framework for rules of origin; a December 2016 Government 
Resolution was put in place to further clarify and modify the procedur es to help implement the rules 
for the EPA with Japan.  
11. Mongolia's tariff regime did not change significantly, with the overall average rate increasing 
slightly from 5% in 2013 to 5.3% in 2020, mainly due to increases in tariffs on spirits and tobacco. 
There remains a significant gap with WTO bindings, which average 17.6%, thus giving Mongolia 
flexibility to raise its tariffs, but also reducing predictability of the tariff regime. Mongolia has many 
tariff exemptions, which increased in number during the revi ew period, including recent temporary 
exemptions on medical products in response to the COVID -19 pandemic. The number of 
prohibited/restricted tariff lines increased from 3 to 111.  
12. Other main charges on imports are the value -added tax (VAT) and excise duti es. The VAT rate 
remains unchanged, at 10% on most goods and services, but is zero -rated on exports. Excise duties 
are applied on alcoholic beverages, tobacco, gasoline, diesel fuel, passenger vehicles, and various 
types of gaming and gambling products and  activities. Excise duty rates on most products increased 
substantially, and while some rates were harmonized between imported and domestic goods, 
differing rates remain on gasoline, diesel fuel, and passenger vehicles. As with tariffs, there are 
several p rovisions or incentives to exempt sectors or products from VAT.  
13. Mongolia maintains prohibitions, restrictions, or licensing requirements upon importation. 
Many reflect its obligations under international conventions such as CITES, the Hague Convention, 
and the Montreal Protocol. A new measure requiring import licences on firearms was approved and 
entered into force in 2015.  
14. Mongolia does not have any legislation concerning anti -dumping, countervailing, or safeguard 
measures. It has established a working gro up to develop regulations in this area, and a regulation 
on safeguards is being drafted. Mongolia's EPA with Japan contains provisions on trade remedies, 
mainly allowing the parties to use the WTO agreements in this area, or alternatively, a bilateral 
safeguard measure.  WT/TPR/S /406/Rev.1  • Mongolia  
 
- 10 - 
 
  15. Similar to the process of customs clearance for imports, exports are processed through the 
CAIS, and an expedited paperless clearance process exists for coal exports. Mongolia continues to 
apply export duties (MNT 150,000/m3) on five categor ies of wood products and export taxes 
(MNT  1,500/piece) on certain skins of goats. A number of goods are subject to export prohibitions 
or restrictions, mostly in line with Mongolia's participation in international conventions. In 2018, the 
Government deve loped the Mongolian Export Program as a policy instrument to support research 
and marketing of priority export products, in particular those outside the mining sector.  
16. Mongolia has subsidies or incentive schemes in various sectors, including agriculture an d 
manufacturing, and for small - and medium -sized enterprises. It does not have export subsidies on 
agricultural products. The COVID -19 pandemic prompted government support for the cashmere 
sector, and a number of development funds exist. Mongolia also offe rs a number of tax rebates, 
incentives, and duty/VAT exemptions to certain sectors or to companies operating in free zones.  
17. In the area of standards and technical requirements, the main law on standards, technical 
regulations, accreditation, and conformit y assessment was revised and replaced, a new list of 
products and services subject to mandatory conformity assessment was issued, and a new law on 
metrology was adopted. In 2016, the National Quality Program was established to improve the legal 
environment  and develop a quality infrastructure, and a technical regulation was implemented for 
imported alcoholic beverages. As at July 2020, more than 6,500 standards and technical regulations 
were registered. Mongolia made five TBT notifications during the review  period.  
18. Mongolia's SPS regime faced challenges but continued with several improvements. For 
example, SPS requirements and practices are not fully harmonized with international SPS standards. 
There is a lack of risk -based inspection, and regulatory and tes ting systems are noted as needing 
investment and improvement. Many of the laws on SPS have been in place for many years with few 
amendments, although new Laws on Animal Health, Fortified Food, and Organic Food were recently 
enacted. Mongolia plans for seve ral initiatives to improve the SPS environment, including 
establishing an electronic information system for food safety, introducing an animal husbandry origin 
system, bringing the veterinary structure up to international standards, and taking actions to p revent 
contagious diseases. Mongolia did not make any SPS notifications during the review period.  
19. The main legislation on competition remains the Law on Competition, 1993, as amended. 
Mongolia's Authority for Fair Competition and Consumer Protection (AFCCP ) operates as the sole 
body permitted to investigate alleged anti -competitive practices, and it also is responsible for the 
regulation of prices of natural monopolies. As at February 2020, 151 natural monopoly entities 
operated in various sectors. The AFCC P cooperates internationally with several other competition 
authorities to address concerns.  
20. Despite a number of privatization initiatives in recent years, state ownership of companies 
continues to be prevalent, and some companies have been nationalized. D uring the review period, 
the Government's main policy goal was to improve the regulatory and legal framework, as well as 
public sector management and governance, of state -owned enterprises (SOEs). In 2016, the 
Government Implementing Agency for Policy Coor dination on State Property was created to manage 
state-owned assets of enterprises. As at July 2020, Mongolia had 105 SOEs, mainly in the energy, 
mining, and transport sectors.  
21. The Public Procurement Law of Mongolia, adopted in 2011 and subsequently amende d, 
regulates all stages of the procurement process. The most recent amendments entered into force in 
2019, and introduced significant changes to the public procurement process by: (i)  implementing a 
preconditioned procurement procedure and a "green procure ment" concept; (ii)  clarifying the roles 
and responsibilities of procurement inspectors; and (iii)  providing for an additional condition for 
forfeiting bid securities. No data are available regarding foreign suppliers' participation in the public 
procureme nt market.  
22. In 2015, Mongolia adopted the National Strategy for the Development of Intellectual Property. 
In September 2016, the Patent Law was amended. Parliament adopted, on 23 January 2020, the 
Law on Intellectual Property to address overlaps, conflicts,  and other issues within existing IP laws; 
it was expected to enter into force on 1 December 2020. Regarding enforcement, the Law on 
Infringement entered into force in 2017. The Enforcement Department of the Intellectual Property 
Office of Mongolia is resp onsible for enforcing IPR -related laws in accordance with the Law on WT/TPR/S /406/Rev.1  • Mongolia  
 
- 11 - 
 
  Infringement. Since 2013, the Department has conducted 1,414 cases and determined 1,230 IPR 
infringements.  
23. Agriculture has long played an important role in Mongolia's economy, employment,  and trade 
despite the county's challenging climatic conditions. During the review period, the sector accounted 
for between 11% and 13% of GDP and between 25% and 30% of employment. Cashmere, horse 
meat, and prepared and preserved meat are the main agricul tural exports. Tobacco products are 
the main agricultural import. Mongolia's measures in agriculture include: tariffs, averaging 7% with 
peaks as high as 40% (tobacco products); quantitative restrictions on a list of 33 strategic food 
items; domestic suppo rt and subsidies; and tax incentives and rebates. A number of government 
policies and programmes have been put in place in recent years with the overall aim to increase 
agricultural output and improve competitiveness and efficiencies of the sector. In 2013 , the 
Mongolian Agricultural Commodity Exchange was established to improve the supply and trade of 
agricultural products, particularly cashmere.  
24. Mining is the dominant sector of the economy. Since 2014, production has grown for almost 
all mining products. However, the sector was affected by the overall fall of demand and in prices 
triggered by the effects of the COVID -19 pandemic. Coal and copper constitute the main mineral 
exports. China and the Russian Federation are Mongolia's main mineral export destina tions. More 
than 95% of the coal produced was exported to China in 2019. Only legal entities incorporated in 
Mongolia can apply for exploration licences. Differential treatment between domestic and foreign 
entities exists in land rights and the requirement  that foreign SOEs investing in an entity operating 
in the mining sector need prior approval if they acquire 33% or more of the shares. The main change 
in the legal regime for mining was a series of amendments to the Mineral Law in March 2019, closing 
loopholes in the tax and royalties regime, applied equally to domestic and foreign owned companies. 
As specified in the Petroleum Law, the exploration and production of crude oil is subject to a specific 
regime distinct from the general mining regime; explorat ion activities are carried out under a 
production sharing agreement signed with the Mineral Resource and Petroleum Authority of 
Mongolia. Mongolia's growing production of crude oil is exported in its quasi -totality because 
Mongolia does not have any refini ng facilities. It imports all its refined products from neighbouring 
countries.  
25. According to the authorities, over 90% of the population has access to electricity at affordable 
prices. The share of imported electricity in Mongolia's supply grew from 7% in 2012 to 20% in 2019. 
The sector's operation is unbundled. The ownership and the management of renewable energy power 
plants are partially privatized and open to foreign investment; the remainder of the sector is state -
owned and publicly managed. Mongolia's  energy system faces capacity and environmental 
challenges; thus, the authorities are planning for reform and expansion.  
26. The manufacturing sector exhibited significant growth, with the value of gross output 
increasing from MNT 3.2 billion in 2013 to MNT 9. 9 billion in 2019. Much of this growth was 
attributable to the food and beverage and the coke, chemicals, and mineral products sectors. In 
terms of trade, mineral products are the main exported goods. The Government's general policy is 
to increase competit iveness and promote the development of a "national production" programme 
that prioritizes export -oriented production and import -substituting manufacturing. To achieve these 
objectives, the Government supports the manufacturing sector through several measur es and 
incentives and a number of sector -specific programmes or policies, such as the cashmere 
programme.  
27. Mongolia adopted or amended numerous regulations regarding banking services, including a 
new regulation on licensing. The banking sector is open to f oreign investment; currently, there are 
no foreign banks established as a subsidiary, a branch, or a representative office. A foreign company 
or foreign citizen wishing to become a shareholder of a Mongolian insurance company is subject to 
the same require ments as a Mongolian company/citizen. Mongolia undertook partial GATS 
commitments on banking services; in its EPA with Japan, such commitments were extended to 
leasing activities. It also undertook full GATS commitments on insurance, reinsurance, and 
transportation insurance for the first three modes of delivery; these commitments are replicated in 
the EPA with Japan.  
28. Regarding the telecommunications sector, Mongolia's fixed -line penetration is low, reflecting 
the dominance of mobile -broadband services. Th e State owns a 94.7% share of the incumbent 
fixed-telecom operator, and a 100% share of a telecom network company. The leading mobile WT/TPR/S /406/Rev.1  • Mongolia  
 
- 12 - 
 
  operator is under foreign ownership. Some services including fixed -line services, internet services, 
and leased lines, and  some mobile services are fully liberalized. Mongolia's telecom regulations 
authorize local loop unbundling. There is no legislation on number portability. Interconnection fees 
are cost oriented. Regulations of pricing exist on retail mobile voice telephon y services and satellite 
TV services. Universal service obligations exist in various services, including voice telephony 
services. Mongolia undertook commitments on value -added telecommunications services both under 
the GATS and in its EPA with Japan.  
29. The domestic aviation market is small and mainly comprises flights linking Ulaanbaatar and 
other principal towns. There is no ceiling on foreign investment in domestic airlines. Mongolia has 
17 licensed airports, including one international airport. The comme rcial aviation authority has a de 
facto monopoly on ground -handling services; self -handling by airlines is also allowed. There are 
16 operators of maintenance repair and overhaul aviation services, 9 of which are foreign owned. 
There are no specific regula tions on the operation of computer reservation services and the selling 
and marketing of air tickets by airlines; these activities are fully open to foreign investment. The 
Government plans to partially privatize the 100% state -owned Mongolyn Irgenii Agaar yn Teever 
(MIAT) airline. Mongolia has 39 bilateral air transport agreements, follows a policy of gradual 
liberalization, and encourages code -sharing with its national airline. There is no specific policy for 
cargo flights, and the charter policy is based on reciprocity.  
30. Mongolia depends heavily on railways to carry freight, particularly for exporting mineral 
resources. The Law on Railway Transport, 2007, stipulates that railway infrastructure deemed critical 
for the nation's economy or society can be eith er fully state -owned or dominantly state -controlled, 
or it can be transferred to state holding after a certain length of time.  
31. Since the early 2000s, the roads policy has focused on construction of five north -south 
highways and one east -west highway. Lice nces for passenger and freight transport are granted on 
the basis of full national treatment. There is a non -compulsory administrative guidance on how to 
determine the price for freight. Mongolia has a network of 11 bilateral road transport agreements, 
all of which regulate both freight and passenger transport.  
32. While Mongolia has no navigable route to the sea, it instituted in 1999 an open shipping 
registry, with no nationality requirements in terms of ownership and crew, including officers. In 
2018, the f leet registered under the Mongolian flag represented 0.03% of the world fleet. Mongolia 
did not undertake any GATS commitments on transport services.  
33. The main legislation on tourism is the Tourism Law, adopted by Parliament in 2000. It defines 
an open mark et access regime that encourages investment, and notably foreign investment. During 
the review period, the Government promoted several tax exemptions designed to boost foreign 
investment. The sector was severely hit by the COVID -19 pandemic; thus, the Gove rnment took 
some provisional support measures, such as creating exemptions from social insurance contributions 
and income tax and distributing relief funds to employees of affected businesses.  
 WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 13 - 
 
  1  ECONOMIC ENVIRONMENT  
1.1  Recent Economic Developments  
1.1.  The Mongolian economy continued to grow between 2014 and 2019. The growth rate declined 
to 1.2% in 2016, reflecting a sharp fall in mineral commodity prices. It subsequently recovered due 
mainly to a rise i n mineral exports, reflecting an increase in global commodity prices and in inward 
foreign direct investment (FDI). In 2019, the economy grew by 5.1%, with an improvement in the 
fiscal balance and a continued increase in reserves and GDP per capita ( Table 1.1). However, affected 
by the COVID -19 pandemic, exports contracted by 40% year -on-year in the first quarter of 2020, 
and the economy contracted 9.7% in the first half of 2020.1 
1.2.  Inflation progressed slowly, and stood at 7.3% in 2019, reflecting an increase in food and 
utilities prices; in 2020, it came down, to 1.7% in September. The unemployment rate has decreased 
since 2016, and stood at 7.8% in 2018. Exports, imports, and FDI c ontinued to grow between 2017 
and 2019.  
1.3.  In terms of value -added, the share of services in GDP has declined since 2016, to account for 
44.8% of GDP in 2019. The share of mining has increased since 2015 (26.0% of GDP in 2019), and 
that of manufacturing has increased since 2017 (10.5% of GDP in 2019) (Table 1.2). In terms of 
employment, the share of services has increased since 2017, to 53.1% of total employment in 2019, 
while that of agriculture decreased in the same period, to 25.3%.  
1.4.  The COVID -19 pandemic s ubstantially affected the Mongolian economy, giving rise to urgent 
budget and balance -of-payments needs. In response to the pandemic, Mongolia adopted its first 
relief package on 9 April 2020 to provide support for those affected by the economic downturn. The 
total amount of fiscal measures by the Government is estimated to be around 8.9% of GDP.2 On the 
monetary policy front, the Bank of Mongolia (central bank ) decided to: (i) purchase bonds to help 
finance a debt -relief scheme for the elderly; (ii) resum e support for subsidized housing loans via the 
purchase of mortgage -backed securities; and (iii) provide zero -interest -rate short -term loans to 
banks.3 
1.5.   In accordance with Article  7 of the Law on the Prevention, Fighting, and Social and Economic 
Developme nt in relation to COVID -19 Infection, promulgated on 29 April 2020, the Government 
adopted action plans.4 Under the plans, the Government implemented the following actions to 
sustain the economy: (i) it discussed with the Government of China and implement ed the Green 
Gate temporary measure to increase mineral exports; (ii) it increased social welfare, including child 
allowance, from MNT 20,000 to MNT 100,000; and (iii) to support enterprises, it delayed social 
security insurance and personal income tax pay ments; and introduced a tax exemption for certain 
small - and medium -sized enterprises (SMEs).  
1.6.  Mongolia was ranked 92nd overall in the 2019 United Nations Develop ment Programme (UNDP) 
Human Development Index, up from 108th in 2012.5 
 
1 IMF, Request for Purchase under the Rapid Financing Instrument,  27 May 2020.  
2 IMF, Country Report No. 20/205 , June 2020. To support Mongolia, the IMF approved the request for 
emergency financial assistance under the Rapid Financing Instrument (RFI) of about USD 99 million, which is 
intended to help support foreign exchange reserves, create fiscal space for essential pandemic -related 
expenditures, and catalyse donor support. On 24 May 2017, Mongolia entered into a three -year arrangement 
of USD 425 million with the IMF under the Extended Fund Facility (EFF).  
3 The Bank of Mongolia's Monetary Policy Committee held an unscheduled me eting on 13 April 2020, 
and decided to extend the maturity limit on consumption loans up to 12 months and to lower the policy rate by 
1 percentage point to 9%. Bank of Mongolia, Lowering the Policy Rate and Extending the Maturity of Consumer 
Loans , 13 Apri l 2020. Viewed at: 
https://www.mongolbank.mn/documents/pressrelease/Monetary_policy_statement_eng_Apr2020.pdf . 
4 Legalinfo, Law on Prevention, Fighti ng, and Social and Economic Development of Coronavirus 
Infection/COVID -19, 29 April 2020. Viewed at: https://www.legalinfo.mn/law/details/15312?lawid=15312 . 
5 UNDP, 2019 Human Developme nt Index Ranking . Viewed at: http://hdr.undp.org/en/content/2019 -
human -development -index -ranking.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 14 - 
 
  Table 1.1 Selected macroeconomic indicators, 2014 -19 
 2014  2015  2016  2017  2018  2019  
National accounts   (%)  
Real GDP growth  7.9 2.4 1.2 5.3 7.2 5.1 
Nominal GDP (USD million)  12,226.5  11,749.6  11,186.7  11,425.8  13,108.8  13,852.9  
Per capita GDP (USD)  4,158.5  3,918.6  3,660.2  3,669.4  4,135.0  4,295.2  
Unemployment rate (%)  7.9 7.5 10.0 8.8 7.8 .. 
Prices and interest rates   (%) 
Inflation (consumer price index, % annual 
change (period average))  12.3 5.7 0.7 4.3 6.8 7.3 
Bank of Mongolia policy rate (end -period)  12.0 13.0 14.0 11.0 11.0 11.0 
Money and credit (end -period)   (% change)  
Broad money (M2)a 12.5 -5.5 21.0 30.5 22.8 7.0 
Exchange rate        
MNT per USD (period average)  1,817.9  1,970.3  2,140.3  2,439.8  2,472.5  2,663.5  
Fiscal policy   (% of GDP unless otherwise indicated)  
Current fiscal balance  4.4 -0.1 -4.3 2.9 8.2 9.9 
Revenue and grants  28.4 25.8 24.4 28.4 31.0 32.4 
Expenditure and net lending  32.1 30.8 39.7 32.3 28.5 31.0 
Overall balance  -3.7 -5.0 -15.3 -3.9 2.6 1.4 
General government debtb 76.5 81.5 87.6 84.6 73.3 73.0 
Domestic  21.6 25.6 20.2 13.6 5.3 4.2 
External sector        
Current account balance  -15.8 -8.1 -6.3 -10.1 -16.8 -15.6 
Net merchandise trade  1.5 4.8 12.0 13.1 5.2 8.4 
Exports  44.7 37.8 42.9 51.1 50.0 51.9 
Imports  43.3 33.1 31.0 38.0 44.9 43.5 
Services balance  -10.5 -6.1 -12.0 -10.6 -15.1 -14.4 
Capital account  1.1 1.0 0.8 0.7 0.7 1.2 
Financial account  -12.3 -6.7 -7.3 -22.7 -16.0 -19.3 
Merchandise exports (% change in USD)  44.4 -18.7 8.0 21.4 12.4 9.6 
Merchandise imports (% change in USD)  -17.3 -26.6 -10.8 25.2 35.5 2.4 
Services exports (% change in USD)  -11.9 13.5 16.3 20.7 15.0 10.9 
Services imports (% change in USD)  -5.1 -25.9 52.3 2.0 41.6 4.4 
International reserves (end -period, USD 
million)  1,651.8  1,322.5  1,304.1  3,016.7  3,549.7  4,363.7  
(in months of prospective imports of goods 
and services)  4.1 4.4 4.7 7.0 7.0 8.0 
Total external debt (end-period, USD billion) 21.9 22.7 24.6 27.5 28.7 30.7 
.. Not available.  
a M1 (currency) + quasi money (tugrik -denominated time deposits and foreign currency deposits).  
b General government debt excludes the debt of state -owned enterprises and the Bank of Mongolia's 
liabilities from swap lines with the People's Bank of China.  
Source:  National Statistics Office of Mongolia; Bank of Mongolia; IMF, Staff Report for the 2019 A rticle IV 
Consultation , Country Report No. 19/297, September 2019; and informa tion provided by the 
authorities.  
Table  1.2 GDP, by economic activity and employment, 2014 -19 
  
2014  2015  2016  2017  2018  2019  
GDP by economic activity at constant 2010 prices (% change)       
Agriculture, forestry, and fishing  13.7 10.7 6.2 1.8 4.5 8.4 
Mining and quarrying  19.4 14.1 0.2 -5.5 6.1 -0.4 
Manufacturing  4.2 2.6 -0.8 19.9 15.7 10.9 
Electricity, gas, and water supply  5.3 3.1 1.5 5.0 8.2 5.3  
Electricity, gas, steam, air-conditioning supply  6.2 4.5 2.0 5.5 8.2 5.9  
Water supply; sewerage, waste management, and 
remediation activities  -0.7 -7.0 -1.8 1.4 8.2 0.3 
Construction  -4.3 -0.2 -4.9 11.4 4.7 8.0 
Services  7.8 0.6 1.1 7.7 4.7 5.8  
Wholesale and retail trade; repair of motor vehicles and 
motorcycles  2.4 -8.1 -2.6 6.8 2.2 7.9 
 
Transportation and storage  14.8 5.1 11.5 14.2 7.6 2.0  
Accommodation and food -service activities  -10.8 3.3 1.5 9.7 11.6 4.5  
Information and communication  4.7 -2.5 -6.6 13.3 7.8 7.5  
Financial and insurance activities  32.6 14.6 2.3 9.1 5.5 10.3  
Real estate activities  3.7 4.3 1.2 6.7 6.9 2.6  
Professional, scientific, and technical activities  12.3 -0.2 -7.4 -5.9 7.2 9.2  
Administrative and support service activities  0.9 2.8 0.2 9.5 4.0 3.5 WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 15 - 
 
    
2014  2015  2016  2017  2018  2019   
Public administration and defence; compulsory social 
insurance  2.5 3.0 -0.1 1.2 0.6 4.8 
 
Education services  1.6 -0.7 2.0 3.0 2.6 3.2  
Human health and social work activities  9.4 1.9 -0.1 2.0 2.6 4.1  
Arts, entertainment, and recreation  0.2 3.5 8.5 1.1 0.6 4.9  
Other service activities  -4.1 -2.6 6.3 4.1 2.4 -3.6 
GDP, by economic activity at current basic prices (%)       
Agriculture, forestry, and fishing  14.7 14.5 12.7 11.3 12.1 12.1 
Mining and quarrying  18.2 18.6 21.9 25.8 26.7 26.0 
Manufacturing  9.7 8.3 8.0 9.9 10.6 10.5 
Electricity, gas, and water supply  2.0 2.3 2.7 2.4 2.4 2.3  
Electricity, gas, steam, air -conditioning supply  1.6 1.8 2.1 1.9 1.9 1.8  
Water supply; sewerage, waste management, and 
remediation activities  0.4 0.5 0.6 0.5 0.5 0.5 
Construction  4.9 4.6 4.3 4.1 4.1 4.2 
Services  50.5 51.7 50.3 46.5 44.1 44.8  
Wholesale and retail trade; repair of motor vehicles and 
motorcycles  12.6 12.6 12.1 11.3 10.5 10.7 
 
Transportation and storage  5.5 5.7 5.6 5.4 5.2 5.2  
Accommodation and food -service activities  1.0 1.0 1.1 1.1 1.1 1.2  
Information and communication  2.4 2.3 2.2 1.9 1.9 1.9  
Financial and insurance activities  5.2 5.8 5.6 5.6 5.4 5.4  
Real estate activities  7.4 7.5 7.5 6.6 6.3 5.8  
Professional, scientific, and technical activities  2.5 2.4 1.9 1.6 1.5 1.6  
Administrative and support service activities  1.0 1.0 1.0 0.9 0.9 1.0  
Public administration and defence; compulsory social 
insurance  4.5 5.0 5.1 4.6 4.2 4.2 
 
Education services  4.9 4.8 4.8 4.4 4.1 4.6  
Human health and social work activities  2.0 2.2 2.2 1.9 1.9 2.2  
Arts, entertainment, and recreation  0.5 0.5 0.5 0.4 0.4 0.4  
Other service activities  0.9 0.9 0.8 0.6 0.6 0.5 
Share of sector in total employment (%)        
Agriculture, forestry, and fishing  28.0 28.5 30.4 28.8 26.7 25.3 
Mining and quarrying  3.7 .. 3.3 4.2 4.6 5.1 
Manufacturing  7.7 .. 7.5 7.5 8.0 7.9 
Electricity, gas, and water supply  2.0 .. 1.9 1.8 1.8 2.6  
Electricity, gas, steam, air -conditioning supply  1.4 .. 1.4 1.4 1.3 1.7  
Water supply; sewerage, waste management, and 
remediation activities  0.6 .. 0.5 0.4 0.5 0.9 
Construction  7.3 .. 6.2 5.7 6.1 6.0 
Services  51.3 .. 50.6 52.0 52.7 53.1  
Wholesale and retail trade; repair of motor vehicles and 
motorcycles  15.3 .. 15.0 16.5 16.9 14.0 
 
Transportation and storage  6.3 .. 5.7 5.9 5.9 5.3  
Accommodation and food -service activities  3.3 .. 2.8 2.9 3.0 3.2  
Information and communication  1.6 .. 1.6 1.2 1.1 1.1  
Financial and insurance activities  2.1 .. 1.9 1.9 2.1 2.1  
Real estate activities  0.1 .. 0.1 0.0 0.1 0.1  
Professional, scientific, and technical activities  1.1 .. 1.1 1.0 1.2 1.6  
Administrative and support service activities  1.1 .. 1.3 1.7 1.5 1.8  
Public administration and defence; compulsory social 
insurance  6.0 .. 6.5 6.6 6.1 7.5 
 
Education services  8.1 .. 8.3 8.0 7.9 8.4  
Arts, entertainment, and recreation  1.0 .. 0.9 0.8 1.1 1.6  
Activities of households as employers  3.5 .. 3.7 3.4 4.0 4.2  
Other service activities  2.0 .. 1.8 2.0 2.0 2.3 
..  Not available.  
Source:  Mongolian Statistical Information Service, National Accounts . Viewed at: 
www.1212.mn/Stat.aspx?LIST_ID=976_L05&type=tables ; and Employees . Viewed at: 
www.1212.mn/tables.aspx?TBL_ID=DT_NS O_0400_035V7 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 16 - 
 
  1.7.  Mongolia's current account was in deficit during the review period; the deficit increased 
between 2017 and 2019 (Table 1.3). Mongolia's main export destination is China, and its main export 
products are minerals; this structure has remained l argely unchanged since the previous Review 
(Section  1.2). T he authorities continue to aim at exploiting mineral deposits of strategic importance, 
while also  diversifying export products, so that Mongolia will be less dependent on mineral resources. 
In this  context, the Action Plan of the Government for 2016-20 was adopted on 9 September 20166 
to, inter alia , diversify the economic structure and export products. In addition, in September 2018, 
the Mongol ian Export Program (2018 -22) was adopted by the Govern ment to, inter alia : (i) promote 
non-mining exports; (ii) diversify export markets; (iii) promote export development; and 
(iv) support export market analysis.7 The Programme aims to promote non -mining exports through 
supporting the supply chain and production of agricultural products, including wool, cashmere, 
leather, meat, milk, and sea buckthorn.8 
Table 1.3 Balance of payments, 2014 -19 
(USD million)  
 2014  2015  2016  2017  2018  2019  
Current account  -1,934.3  -948.5  -699.7  -1,155.4  -2,206.8  -2,161.7  
Trade balance  177.7  562.6  1,337.8  1,493.7  675.5  1,158.1  
Exports (f.o.b .) 5,470.8  4,446.4  4,804.0  5,834.3  6,556.5  7,182.8  
Imports (f.o.b .) 5,293.1  3,883.8  3,466.2  4,340.6  5,881.0  6,024.7  
Services, net  -1,289.2  -715.5  -1,338.3  -1,216.1  -1,978.3  -1,991.7  
Receipts  607.0  688.8  800.9  966.3  1,111.6  1,232.7  
Payments  1,896.2  1,404.3  2,139.2  2,182.4  3,089.9  3,224.4  
Primary income, net  -972.5  -969.7  -911.2  -1,612.6  -1,227.5  -1,568.8  
Receipts  57.1 58.8 68.3 76.4 345.6  394.5  
Compensation of employees  53.8 53.7 58.2 62.8 299.3  306.7  
Investment income  3.4 5.2 10.1 8.4 32.0 59.3 
Other  0.0 0.0 0.0 5.7 13.2 27.3 
Payments  1,029.6  1,028.5  979.5  1,689.0  1,573.1  1,963.3  
Compensation of employees  166.3  96.1 86.2 106.7  114.6  110.4  
Investment income  863.3  932.4  893.3  1,582.7  1,457.4  1,851.7  
Other  0.0 0.0 0.0 -0.5 1.0 1.2 
Secondary income, net  149.7  174.1  212.1  179.5  323.5  240.7  
Receipts  332.8  320.4  304.8  264.2  447.8  374.3  
Payments  183.1  146.4  92.7 84.6 124.3  133.6  
Capital account  135.6  115.7  90.8 77.7 91.9 160.8  
Financial account  -1,503.8  -788.0  -811.9  -2,599.3  -2,091.0  -2,677.6  
Direct investment  -230.7  -82.9 4,170.9  -1,445.7  -2,136.7  -2,316.4  
Mongolia's direct investment 
abroad  107.1  11.4 14.5 48.6 37.0 127.0  
Direct investment into Mongolia  337.8  94.3 -4,156.4  1,494.4  2,173.7  2,443.3  
Portfolio investment  -270.0  -248.5  -487.1  -493.1  -60.8 -372.3  
Assets  41.4 28.8 13.0 -26.6 46.6 14.8 
Liabilities  311.3  277.3  500.0  466.6  107.4  387.1  
Other investment  -1,002.0  -455.3  -4,533.8  -677.3  119.2  5.1 
  Assets  306.4  233.5  418.7  -348.7  -110.2  43.7 
   Currency and deposits  226.8  236.8  327.4  -346.2  -22.5 38.1 
     Loans  45.6 1.5 9.7 -3.8 -37.9 -12.3 
     Trade credit and advances  34.0 -4.9 81.7 1.3 -49.9 18.0 
  Liabilities  1,308.5  688.7  4,952.6  328.6  -229.4  38.6 
   Currency and deposits  471.2  454.1  123.5  142.7  -33.4 -52.0 
     Loans  750.8  349.0  4,968.1  222.3  -142.2  155.9  
 
6 Legalinfo, Parliament Resolution No. 45 on Approval of the Action Plan of the Government of Mongolia 
for 2016 -20, 9 September 2016. Viewed at: https://www.legalinfo.mn/law/details/12120 . 
7 Furthermore, in March 2017, the Ministry of Finance and the World Bank launched the Export 
Development Project, aimed at strengthening export capabilities of SMEs i n non -minerals sectors.  
8 Legalinfo, Mongolian Export Program . Viewed at: 
https://www.legalinfo.mn/annex/details/8719?lawid=13692 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 17 - 
 
   2014  2015  2016  2017  2018  2019  
     Trade credit and advances  38.4 -186.4  -139.0  -42.5 -53.8 -65.2 
  Other  48.0 72.0 0.0 6.0 0.0 0.0 
Net errors and omissions  -176.1  -223.3  -221.2  -61.6 -117.8  -223.9  
Overall balance  -471.1  -268.1  -18.2 1,459.9  -141.7  452.9  
Source:  Bank of Mongolia, Balance of Payments . Viewed at: 
https://www.mongolbank.mn/eng/liststatistic.aspx?id=4_1 . 
1.8.  After continued fiscal deficit since 2014, the overall fiscal balance turned to surplus in 2018 
and 2019, mainly reflecting stron g mining revenue, policies including the Economic Recovery 
Program, and expenditure restraint. On 28 August 2020, a law amending the Medium -Term Budget 
Framework (General Budget of Mongolia 2020 Budget Framework Announcement) was adopted.9 
The Government continues to strengthen the fiscal policy framework and promote fiscal consolidation 
under, inter alia,  the Fiscal Stability Law, 2010, and three fiscal rules under the Law: (i) the 
expenditure rule, which sets a cap on the growth rate of total nominal exp enditure; (ii) the structural 
fiscal balance rule, which sets out that the structural fiscal balance (the overall balance minus cyclical 
revenues on major minerals) must be equal to or stronger than a deficit of 2% of GDP; and (iii) the 
debt rule, which st ates that the present value of government debt should not exceed 40% of GDP 
after 2014. Parliament adjusted the debt ceiling to 69% of GDP in present value terms.  
1.9.  The Fiscal Stabilization Fund was established under the Fiscal Stability Law to create stabil ity 
in the budget. It is financed in part by mining -related revenue. Additionally, in 2016, a sovereign 
wealth fund, the Future Heritage Fund, was established as a savings fund for the Government10; it 
is mainly financed by dividends on the public shares o f mining -sector SOEs and a part of mineral 
royalty payments.  
1.10.   The main policy objective of the Bank of Mongolia is to ensure the stability of the tugrik (MNT), 
the national currency.11 The Bank of Mongolia  set a target to stabilize the inflation rate at aro und 
8%. During the review period, monetary policy was tightened in January 2015. It was expansionary 
from January 2016 to mid -August 2016, when it was tightened. Another expansionary phase 
occurred from mid -December 2016 until mid -March 2018, and a tighten ing followed in November 
2018. M onetary policy turned expansionary in 2020 by, inter alia , the reduction of the policy rate by 
1 percentage point each on 11 March, 13 April, and 14 September; as a result, the policy rate came 
down from 11% at the beginning  of 2020 to 8% as at 14 September 2020.12 The Bank of Mongolia  
also adopted other monetary policy measures during the review period.13 Amendments to the Law 
 
9 Legalinfo, Law on General Budget of Mongolia 2020 B udget Framework Announcement, on 
Amendments to the Law on the 2021 -22 Budget Draft , 28 August 2020. Viewed at: 
https://www.legalinfo.mn/additional/details/3850?lawid=14524 . 
10 The Fund is allowed to finance the budget deficit until 2022.  
11 The Bank of Mongolia formulates and implements monetary policy by regulating money supply 
through changes in reserve money to achieve its main objective of currency stability. The Government is no t 
empowered to interfere in monetary policy setting; the Bank of Mongolia presents its targets annually to 
Parliament in the State Monetary Policy Guidelines . The Bank of Mongolia formally reports to Parliament in 
accordance with Article 30 of the Central Bank Law.  
12 During the review period, the policy rate was: (i) increased by 1 percentage point to 13% on 
15 January 2015; (ii) reduced by 1 percentage point to 12% on 14 January 2016; (iii) reduced by 1.5 
percentage points to 10.5% on 6 May 2016; (iv) inc reased by 4.5 percentage points to 15% on 18 August 
2016; (v)  reduced by 1 percentage point to 14% on 20 December 2016; (vi) reduced by 2 percentage points 
to 12% on 16 June 2017; (vii) reduced by 1 percentage point to 11% on 25 December 2017; (viii) reduc ed by 
1 percentage point to 10% on 26 March 2018; and (ix) increased by 1 percentage point to 11% on 
27 November 2018.  
13 These measures included: (i) on 26 March 2018, the reserve requirements on domestic and foreign 
currency liabilities were set at 10.5% and 12%, respectively; (ii) on 15 June 2018, the Bank of Mongolia set a 
ceiling on the debt -to-income ratio for personal consumption credits at 70%; (iii) on 20 December 2019, the 
reserve requirement on banks' liabilities in foreign currency was raised by 3 percentage points to 15%; (iv) on 
1 April 2019, the upper limit on the debt -service -to-income ratio on newly issued and term -changed consumer 
loans, excluding pension loans, was revised to 60%; (v) on 11 March 2020, the Bank of Mongolia lowered the 
reserve requirement on banks' liabilities in tugrik by 2 percentage points to 8.5%, and changed the range of 
the interest rate corridor to be +1, -1 percentage points from the policy rate; (vi) on 13 April 2020, the 
maturity limit on consumer loans was extended  up to 12 months for lenders experiencing difficulties repaying 
their loans; (vii)  on 26 June 2020, remuneration on tugrik reserve requirements issued to banks was reduced 
by the amount corresponding to the ratio of foreign currency -denominated (FX) deposi ts with relatively higher 
rates and FX current accounts charging any rate to total FX deposits and current accounts, and the Bank of WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 18 - 
 
  on the Bank of Mongolia were approved by Parliament, and entered into force on 1 April 2018. In 
accordance with the amendments, Parliament appointed the Monetary Policy Committee as the 
official monetary policy decision -making body, which relies on a collective decision -making 
framework; monetary policy decisions by the Committee are made after meetings  held in two 
phases. The Financial Stability Council, consisting of the Minister of Finance, the Governor of the 
Bank of Mongolia , and the Commissioner of the Financial Regulatory Commission, continues to aim 
at improving inter -government cooperation.  
1.11.   Mongolia uses a floating exchange rate system. The authorities stated that the Bank of 
Mongolia  intervenes through auctioning in the foreign exchange market with a view to soothing 
volatility.14 Mongolia's international reserves amounted to ab out USD 4.4 billion in 2019 (up from 
USD 1.3 billion in 2016).  
1.2  Trade Performance  
1.2.1   Composition of trade  
1.12.   Mongolia's exports remain heavily concentrated in a few items; in 2019, 84% of exports were 
related to mining, with coal and copper representing 40.3% and 2 3.6% of total exports, respectively 
(Table A1.1 and Chart 1.1). In the same year, machinery and electrical equipment, transport 
equipment, and mineral fuels were the main import items; the share of transport equipment 
increased betw een 2013 and 2019 (Table A1.2).  
1.2.2   Direction of trade  
1.13.   Between 2013 and 2019, China's share in Mongolia's exports increased to almost 89% 
(Table  A1.3 and Chart 1.2). During the same period, the shares in Mongolia's imports of China, 
Japan, and the Russian Fede ration increased, while the shares of the European Union, the Republic 
of Korea, and the United  States declined (Table A1.4 and Chart 1.2).  
 
Mongolia promoted financial stability in the banking system by discouraging bank deposit dollarization and 
maintaining rela tive returns on the domestic currency; (viii) on 7 August 2020, the Bank of Mongolia decided 
to prolong the implementation of restructuring and to extend the maturity on consumer loans to 
31 December  2020 for borrowers experiencing difficulties repaying th eir loans due to the current economic 
circumstances; and (ix) on 14 September 2020, the Bank of Mongolia decided to introduce long -term repo 
financing instruments.  
14 According to Article  5 of the Law on Currency Settlements, volatility higher than 5% must be "brought 
to the attention of the Prime Minister". For a detailed record of the Bank of Mongolia's intervention through 
auctioning, see: http://www.mongolbank.mn/eng/dblistforexauction.aspx .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 19 - 
 
  Chart 1.1 Product composition of merchandise trade, by main HS group,  2013 and 2019  
 
Source:  WTO calculations, based on the UN Comtrade Database, and on data provided by the authorities.  
Chart 1.[MNG] Product composition of merchandise trade by main HS groups, 2013 and 2019
2013 2019
Exports
Source:  WTO calculations, based on UNSD Comtrade database, and on data provided by the 
authorities.Other   4.2%
Plastics & rubber
3.7%
Chemicals 
4.7%Imports
Transport equipment 
15.7%
Machinery & electrical 
equipment
21.9%Total:  USD 4.3 billion Total:  USD 7.6 billion
Total:  USD 6.4 billion Total: USD 6.1 billionCopper ores & 
concentrates  22.2%
Chemicals
6.0%Other mineral 
products 2.2%
Coal
40.3%
Other mineral 
products 3.4%Base metals &
articles thereof
8.7%Iron ores & 
concentrates
15.3%Gold
7.3%
Other mineral 
products 5.2%Prepared food, 
beverages, tobacco
7.3%
Plastics & rubber
4.2%Machinery & electrical 
equipment 
20.0%Other mineral 
products 
1.4%
Zinc ores & 
concentrates
2.8%
Other
12.1%Transport equipment
19.0%Textiles & textile
articles  5.7%Coal
26.1%Petroleum oils, crude
12.1%
Other
11.4%Other  5.1%
Zinc ores &
concentrates
2.5%Gold  5.5%
Petroleum oils, 
other than crude  
19.0%Base metals &
articles thereof
8.8%Fluorspar 2.0%
Petroleum oils, 
other than crude
22.2%Fluorspar 2.7%
Prepared food, 
beverages, tobacco
6.5%Iron ores &
concentrates
7.6%
Copper ores & 
concentrates  23.6%Textiles & 
textile articles  
6.6%Petroleum oils, crude
4.8%
Mineral products
81.9%Mineral products
83.7%WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 20 - 
 
  Chart 1.2 Direction of merchandise trade, 2013 and 2019  
 
Source:  WTO calculations, based on the UN Comtrade Database, and on data provided by the authorities.  
1.3  Trade in Services  
1.14.   During the review period, Mongolia's main services exports were travel, transportation, and 
other business services (Table 1.4). Its main services imports were transpor tation, travel, and other 
business services.  
Table 1.4 Trade in services, 2014 -19 
 
2014  2015  2016  2017  2018  2019  
Total credit (USD million)  607.0  688.8  800.9  966.3  1,111.6  1,232.7   
(% of total credit)  
Manufacturing services on physical inputs owned by others  0.7 0.9 0.7 0.6 0.4 0.3 
Transportation  33.7 34.6 31.9 33.1 31.9 31.6 
   Passenger  6.8 4.8 7.9 6.8 5.9 7.4 
   Freight  13.3 16.2 12.7 13.6 13.5 13.9 
   Other  13.5 13.6 11.4 12.8 12.5 10.2 
Chart 1.[MNG] Direction of merchandise trade, 2013 and 2019
2013 2019
Exports
Source:  WTO calculations, based on UNSD comtrade database and on data provided by the 
authorities.Canada  3.2%
Japan
7.0%ImportsTotal:  USD 4.3 billion Total:  USD 7.6 billion
Total:  USD 6.4 billion Total: USD 6.1 billionOther  2.0%
Other
10.3%China
88.9%
Japan 
9.6%EU-28
11.4%
China
33.2%Korea, Rep. of
8.0%EU-28
9.6%Russian Fed. 1.4%
EU-28
6.7%
Other
12.9%
China
28.1%Other 3.3%
EU-28
4.8%China
86.7%
United States
8.1%
Korea, Rep. of
4.4%Switzerland 1.0%
United States
4.7%Russian Federation
24.6%Russian Federation
28.2%Singapore 2.0%WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 21 - 
 
   
2014  2015  2016  2017  2018  2019  
Travel  35.4 35.7 39.5 40.9 40.1 41.6 
   Business  1.0 0.8 3.3 3.7 4.0 4.0 
   Personal  34.4 34.8 36.2 37.2 36.1 37.6 
Construction  3.2 4.9 3.4 2.3 3.8 3.1 
Financial  0.6 1.0 2.0 2.6 0.7 0.4 
Charges for the use of intellectual property , n.i.e. 0.4 0.3 0.2 0.1 0.1 0.1 
Telecommunication and computer  2.2 1.8 2.3 2.6 4.2 4.1 
Other business  23.3 20.2 19.4 17.1 18.3 18.3 
   Research and development  0.0 0.0 0.0 0.1 0.7 0.3 
   Professional and management consulting  5.1 3.7 4.5 3.9 3.5 4.3 
   Technical, trade -related, and other  18.2 16.5 15.0 13.1 14.1 13.7 
Personal, cultural, and recreational  0.1 0.1 0.2 0.3 0.3 0.1 
Government goods and services n.i.e.  0.5 0.4 0.4 0.3 0.3 0.3 
Total debit (USD million)  1,896.2  1,404.3  2,139.2  2,182.4  3,089.9  3,224.4   
(% of total debit)  
Manufacturing services on physical inputs owned by others  0.0 0.0 0.3 0.9 0.4 0.2 
Maintenance and repair services, n.i.e.  1.9 0.2 0.0 0.0 0.0 0.0 
Transportation  20.8 24.5 20.2 27.7 29.6 30.5 
   Passenger  3.0 3.7 2.5 3.9 3.3 3.4 
   Freight  13.3 15.9 14.8 21.5 24.1 25.4 
   Other  4.5 4.9 2.9 2.3 2.2 1.6 
Travel  24.9 30.0 22.6 24.4 27.8 28.7 
   Business  0.4 0.8 0.6 1.1 0.3 0.2 
   Personal  24.5 29.3 22.0 23.3 27.6 28.4 
Construction  5.8 8.1 7.7 11.0 6.7 4.5 
Insurance and pension  0.6 1.7 0.7 0.9 0.7 0.7 
Financial  5.4 4.2 10.3 2.3 4.2 6.6 
Charges for the use of intellectual property , n.i.e. 0.7 1.1 1.2 0.7 0.5 0.8 
Telecommunication and computer  6.1 6.0 4.1 3.4 3.6 3.3 
Other business  32.3 22.3 32.0 27.5 25.7 23.9 
   Research and development  0.0 0.0 0.0 0.0 0.1 0.1 
   Professional and management consulting  20.8 11.9 11.9 8.3 7.5 9.7 
   Technical, trade -related, and other  11.6 10.5 20.1 19.1 18.1 14.1 
Personal, cultural, and recreational  0.1 0.3 0.1 0.0 0.1 0.0 
Government goods and services n.i.e.  1.3 1.5 1.0 1.1 0.7 0.8 
Source:  Bank of Mongolia. Viewed at: https://www.mongolbank.mn/eng/liststatistic.aspx?id=4_1 . 
1.4  Foreign Direct Investment  
1.15.   According to the United Nations Conference on Trade and Development (UNCTAD), inflows of 
FDI increased between 2017 and 2019, after a sharp decline in 2016 (Chart 1.3). According to data 
provided by the authorities, based on registration, Mongolia's FDI stock amounted to 
USD 22.6 billion in 2019, compared with USD 20.2 billion in 2014 (Table A1.5) . During the review 
period, FDI was mainly in mining and quarrying (Table A1.6).  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 22 - 
 
  Chart 1.3 FDI inflows and stocks, 2000 -19 
 
Source:  UNCTAD, World Investment Report 2020 . 
-5,000-4,000-3,000-2,000-1,00001,0002,0003,0004,0005,0006,000
05,00010,00015,00020,00025,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Left-hand scale:  FDI inward stock
Right-hand scale:  FDI inflowChart 1. [MNG] Foreign direct investment, USD million
Source:  UNCTAD, World Investment Report 2020 online information.WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 23 - 
 
  2  TRADE AND INVESTMENT REGIMES  
2.1  General Framework  
2.1.  Under the 1992 Constitution, which was amended in 1999, 2001, and 2019, Mongolia is a 
parliamentary democracy with legislative authority vested in a unicameral parliament, the State 
Great Hural  (Parliament) . Parliament,  with the President's approval, is responsible for appointing the 
Prime Minister and the ministers that compose the executive arm of government (Table 2.1). 
Members of Parliament are elected for a four -year fixed term. The last parliamentary elections took  
place in June 2020.  
Table 2.1 Government ministries and selected agencies, September 2020  
  
Prime Minister, Deputy Premier, and Cabinet Office  
Prime Minister  General Intelligence Agency  
State Special Security Department  
State Committee for Physical Culture and Sports  
Government Agency for Policy Coordination on State Property  
Deputy Premier  State Professional Inspection Agency  
National Emergency Management Agency  
Authority for Fair Competition and Consumer Protection  
Agency for Standardization and Metrology  
Procurement Policy Department  
Cabinet Office of the Government  Communications and Information Technology Authority  
National Development Agency  
Environment and Tourism  National Agency for Meteorology and Environmental Monitoring  
Water Authority  
Minister of Defence  General Staff of the Mongolian Armed Forces  
Foreign Affairs   
Finance  Customs General Administration  
General Department of Taxation  
Justice and Internal Affairs  General Police Department  
General Authority for Border Protection  
General Authority for State Registration  
General Archival Authority  
General Executive Agency for Court Decisions  
Immigration Agency  
Intellectual Property Office  
Labour and Social Protection  Social Insurance General Office  
General Agency for Labour and Social Services  
General Agency for Development of Persons with Disabilities  
Family, Child and Youth Development Agency  
Construction and Urban Development  Administration of Land Affairs, Geodesy and Cartography  
Education and Science   
Roads and Transport Development 
(MRTD)  Civil Aviation Authority  
Culture  Department of Arts and Culture  
Mining and Heavy Industry (MMHI)  Mineral Resources and Petroleum Authority  
National Geological Agency  
Food, Agriculture and Light Industry 
(MOFALI)  General Authority for Veterinary Services  
Department of Small and Medium Enterprises  
Energy   
Health  
 General Authority for Health Insurance  
Department for Control and Regulation of Medicines and Medical 
Devices (added by Government Resolution No. 22, 28 August 2020, 
and shall come into force on 1 January 2021)  
Source:  Information provided by the authorities; and Government of  Mongolia, State Institutions . Viewed at: 
https://www.legalinfo.mn/annex/details/11115?lawid=15488 . 
2.2.  The latest amendments to the Constitution were adopted by Parliament and promulgate d by 
the President in November 2019, after an extensive consultative process initiated in 2017 and 
involving the ruling party, the main opposition party, the President, the Prime Minister, constitutional 
experts, and the general public, through a "delibera tive council" composed of citizens chosen at 
random. The amendments aim to fine -tune the balance of power between the different institutions 
and to strengthen stability and governance.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 24 - 
 
  2.3.  These amendments address several different issues. First, they change t he majority required 
for the dismissal of the Prime Minister from a simple majority to an absolute majority, and institute 
an obligation to appoint a new Prime Minister within 30 days, failing which the President is obliged 
to dissolve Parliament.  If the Prime Minister submits a draft resolution requesting a vote of 
confidence on issues relating to the state budget or policy, Parliament must discuss it within three 
days, and adopt a resolution within 10 days by a majority of its members. If the resolut ion is 
rejected, the Prime Minister is considered to be dismissed, and Parliament must appoint a new Prime 
Minister within 30 days, failing which  the President is obliged to dissolve Parliament.  These 
provisions aim to tackle governmental instability.  
2.4.  The amendments prohibit Parliament from increasing the expenditures and losses in the state 
budget submitted by the Government. The amendments require that only the Prime Minister and 
not more than four Cabinet ministers can remain parliamentarians. In additio n, the decision of the 
Prime Minister to appoint/dismiss Cabinet members may not be blocked by either the President or 
Parliament. The amendments also aim to strengthen the check on the executive branch by 
establishing a constitutional body (state audit or ganization) that independently exercises control 
over state finances and budget. Moreover, Parliament is required to ensure that ad hoc  inquiry 
committees, to be established with the support of not less than one quarter of all members, include 
minority rep resentatives. The powers of the state audit organization and the ad hoc inquiry 
committee are defined in the Revised Law on State Audit and the Law on State Great Hural, which 
were adopted on 1 May 2020 and 7 May 2020, respectively.  
2.5.  Other amendments aim to  improve the legislative process and accountability of Parliament. 
The scope and restrictions on the right to legislative initiative, which the President, parliamentarians, 
and the Cabinet exercise, would be detailed in law.  This law has not yet been adopt ed, and is 
expected to be discussed soon by Parliament. Unless specified in the Constitution, the final 
enactment of laws requires absolute majority support, instead of a simple majority as is currently 
the case. Moreover, although members of Parliament no rmally make decisions through open ballot, 
a secret ballot is allowed, as provided in the Constitution and other laws, and when supported by a 
majority present at the session.  The amendments prohibit the adoption or amendment of election 
laws within one ye ar of a regular election.  
2.6.  The President is the head of state, and has the right to veto laws and resolutions of Parliament, 
which can overturn the veto with a two -thirds majority vote. T he 2019 amendments stipulate that 
the President can serve only a sing le six -year term, instead of the previous renewable four -year 
term. Accordingly, the President lost certain statutory powers, such as nominating the head of the 
Anti-Corruption Agency and one of three members of the National Human Rights Commission, and 
appointing the chief judges of courts, except the chief justice of the Supreme Court, and all the 
members and heads of the Judicial General Council and the Judicial Disciplinary (Ethics) Committee. 
Other constitutional amendments concern the judicial system (Section 2.2).  
2.7.  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 sub -districts at the pr ovincial level); the capital city is divided into districts and 
horoos (sub -districts).  
2.8.  The 2019 constitutional amendments also touch on local administrative organization . First, 
Parliament is allowed to delegate functions of the administrative divisions t o the cities or towns, and 
to change the administrative divisions on the basis of proposals from local citizens. Second, in order 
to encourage local economic development, the amendments allow the local councils (the  Hurals of 
Citizen Representatives) in aimags , the capital city, baghs , and soums  to fix the amount of taxes, 
and to manage ownership within the limits defined by law. Third, the presidiums of local councils, 
which currently exercise most of the powers of the local councils during the interval between the ir 
sessions, were eliminated, s o that the local councils can fully exercise their respective powers.  
2.9.  Finally, the  amendments clarify the purpose and principles of the use of natural resources, a 
key political question in mineral -resource -rich Mongolia. Natural resources are defined as 
the public  property of the State, rather than the property of the State, which emphasizes that the 
policies on natural resources should be defined by Parliament, the representatives of the people, to 
benefit the public interest. According to the amendments,  state policy on the use of natural resources 
is based on the consideration of long -term development, safeguarding for both present and future WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 25 - 
 
  generations the right to a healthy and safe environment, and delivering the benefits of natural 
resources in an e qual and just manner through the National Resources Fund, which was incorporated 
in the Constitution. The law will regulate the basis on which to allocate to the people a major part 
of the social and economic benefits from strategic mineral deposits. In or der to safeguard their right 
to a healthy and safe environment, citizens are entitled to be informed of the effects of using natural 
resources.  
2.10.   The 2019 constitutional amendments also include three important changes related to the 
judiciary.  
2.11.   First, the ame ndments fix the membership of the Judiciary General Council at 10, with a non -
renewable four -year term. The Council selects Supreme Court judicial candidates and presents them 
to Parliament. These candidates are then appointed by the President. The Council  also proposes 
judges of other courts to the President for appointment. Five of the 10 members are directly elected 
from judges, and the other five are appointed through open nomination. In addition, the chairperson 
of the Council is elected by its members , instead of appointed by the President. Reports on the 
Council's activities related to judicial independence are submitted to the Supreme Court.  
2.12.   Second, the amendments establish a new constitutional body, the Judicial Disciplinary 
Committee, which decides  on the suspension or removal of judges and the imposition of other 
disciplinary sanctions. The composition and the term of the Committee are regulated by a future law 
soon to be discussed by Parliament  
2.13.   Third, the amendments also allow Parliament to estab lish courts with jurisdictions over several 
aimags and soums , which allows the even distribution of caseloads, the easy creation of specialized 
courts, and improved access to courts.  
2.2  Trade Policy Formulation and Objectives  
2.14.   Mongolia maintains an open foreign trade regime. Due to its landlocked geographic condition, 
Mongolia attaches great significance to trade -facilitation issues, including transit transportation and 
border cooperation with neighbouring countries, and streaml ining and simplifying procedures and 
regulations at the border. Various trade -related national programmes are in place, including the 
Action Plan of the Government  for 2016-20, issued in 2016; the Mongolia Sustainable Development 
Vision, 2030, issued in 2016; and the Mongolian Export Program, issued in 2018 , and the Action 
Plan of the Government  for 2020-24, issued in 2018 .  
2.15.   The Ministry of Foreign Affairs is responsibl e for developing and monitoring the overall 
implementation of foreign trade policy. Several other government ministries and agencies are also 
responsible for aspects of trade policy.  
2.16.   The Ministry of Food, Agriculture and Light Industry (MOFALI) is responsi ble for, inter alia , 
formulating and implementing agricultural policy and issuing import and export licences for 
agricultural goods.  
2.17.   The Minister of Finance chairs the Customs Tariff Council, which is responsible for developing 
customs and tariff policy, and making proposals to the Government regarding the adoption of tariff 
rates, and the imposition of additional duties. The Customs General Administration  of Mongolia 
(Mongolian Customs) , established under the Ministry of Finance, is responsible for enforc ing the 
customs legislation, levying and collecting customs duties and other taxes, and preparing and 
submitting customs statistical data to the National Statistical Office.  
2.18.   The Mongolian Agency for Standardization and Metrology (MASM) is responsible for , inter alia , 
policy, coordinating and managing metrology, and standardization .  
2.19.   The General Agency for Specialized Inspection (GASI) is responsible for , inter alia , the 
inspection of imported and exported foods and products of plant or animal origin, and for ensuring 
their compliance with standards ; enforcement of laws and regulations related to trade, industry, 
services, geology, and mining; and supervising compliance with standards.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 26 - 
 
  2.20.   The Mongolian Intellectual Property Office, an implementing agency unde r the Ministry of 
Justice and Internal Affairs, is in charge of all trade -related aspects of intellectual property, including 
copyright, patents, and trademarks.  
2.21.   Other ministries that participate in trade policy formulation and implementation include 
Environment and Tourism  (MET) , Roads and Transport Development  (MRTD) , Mining and Heavy 
Industry  (MMHI) , Energy, and Justice and Internal Affairs (for the drafting of laws and regulations, 
and trade -related aspects of intellectual property).  
2.22.   The Mongolian Natio nal Chamber of Commerce and Industry (MNCCI) provides a number of 
trade support services, including issuing certificates of origin; arbitrating foreign trade and 
investment disputes; providing export -market research and intelligence; organizing trade fairs , 
exhibitions, and business missions; and developing projects. Several other business associations, 
including the Mongolian National Mining Association, the Mongolian Exporters Association, the 
Mongolian Wool and Cashmere Association, and the Mongolian Mea t Association,  collect and share 
information, identify and discuss trade policy issues affecting their industries, and represent their 
sectors in discussions with the Government.  
2.23.   The main change to the institutional framework is the creation in 2019 of the  Export Promotion 
Council (Section 3.2.4).  
2.2.1   Trade -related law  
2.24.   As is the case in most countries, the trade and trade -related legislative framework is found in 
multiple statutes ( Table 2 .2). In nearly all cases, international agreements have precedence over 
national laws, to the extent that there is no conflict with the Constitution. Under the Civil Code, the 
terms of international treaties may be used in the courts.  
Table 2.2 Main trade -related l aws 
Legislation  Year Last 
amended  Description  
Customs procedures  
Customs Law  2008 2020 Regulates issues related to the organizational structure of 
Mongolian Customs and its legal basis, defines the procedures 
for customs control and clearance, and enforces customs 
legislation  
Tariffs and other duties  
Customs Tariff Law  2008 2019 Regulates matters relating to the creation of the tariff system, 
principles for the adoption of customs duty rates, valuation, 
and rules for levying and collecting customs duties  
Excise Tax Law  2006 2017 Imposes excise taxes on certain imported and domestic goods, 
and governs the payment thereof to the budget  
Law Determining the 
Amount of Export 
Customs Duty to Be 
Imposed on Certain 
Commodities  1996 2016 Imposes specific export customs duties on a number of 
commodities  
Law on Free Zones  2015 2019 Regulates the establishment of free zones and their form, 
powers of governing bodies, and monitoring mechanisms; 
determines the legal basis for and the realization of special tax 
and custom conditions  
Law on the Legal Status of 
the "Altanbulag" Free 
Trade Zone  2002 2015 Determines the legal status of the Altanbulag zone, and 
regulates issues related to its implementation  
Investment and concessions  
Law on Investment  2013 2016 Sets out the legal basis for domestic and foreign investment, 
and provides for tax -stabilization certificates  
Concessions Law  2010 2017 Provides the legal basis for public -private partnerships and 
their regulation  
Intellectual property  
Copyright Law  2006 2017 Regulates the protection of copyright and use of works subject 
to copyright  
Patent Law  2006 2016 Regulates the protection of owners of inventions, industrial 
designs, innovations, and patents; and the use of inventions, 
industrial designs, and innovations  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 27 - 
 
  Legislation  Year Last 
amended  Description  
Law on Trade Marks and 
Geographical Indications  2010 2015 Ensures legal guarantees for trademarks and trade names, 
protects the rights and legal interests of owners, and regulates 
issues concerning the ownership, use, and disposal of 
trademarks and trade names  
Competition policy  
Competition Law  2010 2019 Establishes conditions for fair competition on the market by 
corporate entities, prevents and prohibits activities of 
monopolization or hostility to competition, and defines the 
legal basis for the institution regulating competition  
Government procurement  
Law on Government 
Procurement  2005 2020 Regulates the preparation of bidding documents, 
advertisements, the opening and evaluation of tenders, and 
the award of contracts for public procurement of goods, works, 
and services; and regulates the composition and organization 
of the Tender Committee, and controls its activities  
Company law and licensing  
Company Law  2011 2020 Regulates the establishment, registration, and reorganization 
of a company, its management and organizational structure, 
the rights and obligations of its shareholders, and its 
liquidation  
Law on Licensing  2001 2020 Regulates giving, delaying, and invalidating a licence to 
business activities that might negatively affect the public 
interest, human well -being, the environment, and national 
security, and that might require specific conditions and 
expertise  
Minerals and energy  
Energy Law  2001 2017 Regulates energy generation, transmission, distribution, 
dispatching and supply activities, construction of energy 
facilities, and energy consumption that involve utilization of 
energy resources  
Renewable Energy Law  2007 2019 Regulates the generation of power using renewable energy 
sources and its delivery  
Minerals Law  2006 2019 Regulates exploration, mining, and related activities  
Petroleum Law  2014 2020 Regulates the exploration for, and the protection, processing, 
transportation, storage, and marketing of, petroleum  
Government Resolution 
No. 46 on Approving the 
Model of the Stability 
Agreement  2002  Regulates issues connected with ensuring stable tax conditions 
during a certain period for business entities with foreign 
investments engaged in exploration of mineral resources 
deposits  
Nuclear Energy Law  2009 2016 Regulates the exploration for, and mining of, uranium  
Finance  
Banking Law  2010 2020 Regulates the licensing of banks; revocation of licences; 
establishment of general principles of a bank's management, 
organization, and activities; and enforcement measures  
Law on Central Bank  1996 2019 Establishes the legal grounds of the powers of the B ank of 
Mongolia, its management, organization, and activities; and 
regulates issues concerning the implementation of state 
monetary policy undertaken by the Bank of Mongolia  
Law on Currency 
Settlements  1994 2017 Defines 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 currency exchange 
rate 
Law on Deposits, Loans 
and Banking Transactions  1995 2020 Regulates matters concerning the deposit 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 Activities  2002 2017 Establishes legal foundations for non -bank financial activities, 
and regulates issues of management, organization, licensing, 
and suspension or revocation of licences of entities conducting 
non-bank financial activities  
Law on Combating Money 
Laundering and Terrorism 
Financing  2013 2020 Establishes the legal basis for regulations to prevent money 
laundering and the financing of terrorism  
Law on Bills  1995 2020 Regulates relations between citizens and business entities 
concerning the use of bills of exchange and promissory notes 
as a means of payment  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 28 - 
 
  Legislation  Year Last 
amended  Description  
Law on Insurance  2004 2017 Defines the legal framework for conducting insurance 
activities; regulates relations between insurance companies, 
citizens, and legal entities; and creates principles for state 
auditing of insurance activities  
Securities Law  2013 2018 Regulates the issue of securities for accumulating capital, the 
buying and selling of securities, depository arrangements, and 
clearing and settlement services; and regulates issuers and 
other persons involved in the securities market and the 
protection of investors  
Telecommunications  
Law on 
Telecommunications  2001 2019 Regulates relations among state organizations, service 
providers, business entities, and individuals engaged in 
telecommunications and the creation, utilization, and 
protection of the telecommunications network and 
telecommunications services  
Law on Radio Frequency  1999 2015 Regulates r elations among state organizations, service 
providers, business entities, and individuals engaged in using 
radio frequencies  
Postal Law  2003 2019 Regulates relations among state organizations, service 
providers, business entities, and individuals engaged in postal 
services and the creation, utilization, and protection of the 
postal network and postal services  
Law on Electronic 
Signature  2011 2018 Regulates relations among state organizations, service 
providers, business entities, and individuals engaged in postal 
services and the creation and utilization of electronic 
signatures  
Tourism  
Tourism Law  2000 2017 Regulates relations between the State, citizens, economic 
entities, and organizations with regard to tourism promotion, 
engagement in tourism activities, and provision of tourism 
services  
Source:  Information provided by the authorities.  
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.25.   Mongolia has been a WTO Member since 1997, and participated in negotiations and the regular 
work of the WTO committees during the review period. It ratified the WTO Trade Facilitation 
Agreement (TFA) on 28 November 2016, and took steps  to join the WTO  Agreement on Trade in 
Civil Aircraft. In October 2018, it passed domestic legislation in this respect.1 Mongolia obtained 
Observer status in the WTO Committee on the Agreement on Government Procurement (GPA) on 
23 February 1999 with a view to initiating negotiations for membership as per its Protocol of 
Accession to the WTO; there have been no further initi atives since then, and Mongolia has not yet 
applied for accession to the GPA.2  
2.26.   The WTO TFA is an issue of national importance to Mongolia. As a landlocked country between 
two major economies, the issue of trade facilitation and, in particular, transit an d border cooperation 
with neighbouring countries are of the utmost importance. Mongolia has already embarked on a 
process of streamlining and simplifying procedures and regulations at the border, and it is 
implementing its category commitments (Section 3.1 .1.1). During the negotiating phase of the TFA, 
Mongolia participated by jointly making a number of proposals and communications, mainly on 
international standards, publication and availability of information, simplification of trade documents, 
and transit  issues.  
2.27.   Mongolia has never been involved in the WTO dispute settlement process as a complainant, 
respondent, or third party.  
 
1 Legalinfo, Law on Joining the Agreement , 12 October 2018. Viewed at: 
https://www.legalinfo.mn/law/details/13691?lawid=13691 .  
2 WTO document GPA/S/1, 21 February 2020.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 29 - 
 
  2.28.   Table A2.1 provides an overview of notifications submitted during the review period. These 
were mainly with respect to technical b arriers to trade, rules of origin, free trade agreements (FTAs), 
and agriculture. Notifications remain outstanding in a number of areas, such as agriculture, customs 
valuation, quantitative restrictions, and import licensing.  
2.3.2   Regional and preferential agre ements  
2.29.   Mongolia's Foreign Economic Relations Program Implementation Action Plan, 2015 -20, has a 
number of ambitions in terms of pursuing bilateral and regional FTAs3, including conducting studies 
or investigating the possibility of concluding FTAs with se veral countries. According to the authorities, 
Mongolia seeks to join regional trade arrangements and sign FTAs with its main trading partners in 
order to create more favourable conditions for promoting foreign trade and increasing market access 
of its exp ort products.  
2.30.   The Economic Partnership Agreement (EPA) with Japan, signed in 2015, is the only bilateral 
FTA Mongolia has concluded so far. It has also concluded negotiations with all participating countries 
of the Asia -Pacific Trade Agreement (APTA) and r atified the Agreement in December 2019. As at 
October 2020, the Agreement had not yet entered into force; however, it is expected to be in force 
on 1 January 2021. Furthermore, Mongolia concluded a joint feasibility study on a possible EPA with 
the Republi c of Korea, and it is in the process of conducting a joint feasibility study for a potential 
FTA with China. It has sought to join the Asia -Pacific Economic Cooperation since its inception. 
Mongolia also proposed to launch a feasibility study for an FTA wi th the Eurasian Economic Union 
(EAEU).  
2.31.   The EPA between Japan and Mongolia entered into force on 7 June 2016, and was the first 
FTA entered into by Mongolia. The Agreement is comprehensive, and includes major sections on 
trade in goods, services, and inves tment. It also has provisions on e -commerce, competition, 
government procurement, improving the business climate, and dispute settlement.4 It is gradually 
being implemented, with the final implementation (last tariff reduction) to take place on 
1 April 2036. It was notified to the WTO in 2016, pursuant to Article  XXIV:7(a) of GATT  1994 and 
Article  V:7(a) of GATS.5 Since the agreement's entry into force, imports into Mongolia from Japan 
have increased steadily, while exports from Mongolia to Japan have flu ctuated and have not 
demonstrated any particular trend.  
2.32.   Mongolia's ratification of the APTA took place on 12 December 2019, and is expected to enter 
into force for Mongolia on 1  January 2021.6 According to the authorities, joining the APTA is 
important t o trade, as about 90% of Mongolia's exports are to APTA members, and 30% of its 
imports come from them. As a member of the APTA, Mongolia will benefit from a 30% reduction of 
customs duties on over 10,000 items exported to the other six APTA members.7 The concessions 
Mongolia made to the APTA include tariff reductions on 366 HS 6 -digit lines.8 
2.33.   Australia, Canada, the EAEU, the European  Union, Japan, New Zealand, Norway, Switzerland, 
Turkey, and the United  States provide preferential access to Mongolia unde r their Generalized 
System of Preferences (GSP) arrangements. Since 2006, Mongolia has been  eligible for the GSP+ 
arrangement of the European  Union.  
2.3.3   Other agreements and arrangements  
2.34.   Mongolia maintains other agreements on trade and related matters with a number of countries 
(Table 2. 3). Most of these are longstanding arrangements except for the US -Mongolia Agreement 
on Transparency in Matters Related to International Trade and Investment, which entered into force 
 
3 Legalinfo, Mongolia's Foreign Economic Relations Program . Viewed at: 
https://www.legalinfo.mn/annex/details/7042?lawid=11586 .  
4 Ministry of Foreign Affairs of Japan, Agreement between Japan and Mongolia for an Economic 
Partnership . Viewed at: https://www.mofa.go.jp/a_o/c_m2/mn/page3e_000298.html . 
5 WTO documents WT/REG373/N/1, 2 June 2016; and S/C/N/863, 2 June 2016.  
6 Legalinfo, Law on Ratification of the Agreement , 12 December 2019. Viewed at: 
https://www.legalinfo.mn/law/details/14818?lawid=14818 . 
7 Parliament of Mongolia, Minutes of the Plenary Session of the 2019 Autumn Session, Thursday, 
12 December 2019 . Viewed at: http://www.parliament.mn/files/88812 .  
8 Or 383 tariff lines (2020 tariff schedule).  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 30 - 
 
  in March 2017.9 This Agreement addresses t ransparency in matters related to international trade, 
investment, and financial services.  
Table 2.3 Bilateral trade -related agreements since accession to the WTO  
Agreement  Date  Description  
Trade Agreement between the 
Government of Mongolia and the 
Government of Viet  Nam 13/12/1999  Accords most -favoured nation (MFN) treatment 
to trade, transportation, customs, and taxation; 
and provides for transit transportation through 
the territories of the part ies, and for dispute 
settlement  
Trade Agreement between the 
Government of Mongolia and the 
Government of Cuba  09/11/2001  Accords MFN treatment 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 an 
intergovernmental commission; and sets non -
discriminatory principles with regard to trade 
between t he two countries  
Agreement between the Government of 
Mongolia and the Government of the 
United  States concerning the 
Development of Trade and Investment 
Relations/Trade and Investment 
Framework Agreement  15/07/2004  Established the Joint Trade and Investme nt 
Council; and provides for further development of 
trade and investment relations  
Agreement on Economic Cooperation 
between Mongolia and Hungary  2005 Within the framework of their respective laws 
and regulations, promotes the expansion and 
diversificati on of mutually advantageous 
economic cooperation in all fields relevant to 
economic development  
Agreement on Transparency in Matters 
Related to International Trade and 
Investment between the United  States 
of America and Mongolia  24/09/2013; 
entered into 
force 
20/03/2017  Provides for transparency and the opportunity to 
comment and respond to questions on measures 
affecting trade in goods and services, and 
provisions to address bribery and corruption  
Source:  Information provided by the authorities.  
2.4  Investment Regime  
2.35.   The Government considers foreign direct investment (FDI) an important contributor to the 
economic development of the country. In order to reach its objective to improve economic growth, 
the Government stated a number of goals with respect t o foreign investment in its Action Program, 
2016-20. These measures are to: (i) increase foreign and domestic investments; (ii) restore foreign 
investors' confidence; (iii) create a favourable legal environment to attract investment in the geology 
and mini ng sectors; (iv) provide policy support for foreign investments in the establishment of 
historical and specialized tourism centres and complexes; and (v) create favourable conditions for 
foreign investors in terms of policy, cooperation, and legal stabilit y, improving the implementation 
of international treaties and national legislation related to their interests, and pursuing a consistent 
policy to attract foreign investors into infrastructure, mining, energy, agriculture, tourism, and other 
sectors.10 
2.36.   One recent observation from the Bank of Mongolia states the importance of FDI to the 
economy and to macroeconomic stability. FDI has had a positive effect on GDP, and has a spill -over 
effect into many sectors of the economy. However, FDI remains highly concen trated in one sector: 
 
9 Office of the United  States Trade Representative, Agreement on Transparency in Matters Related to 
International Trade and Inve stment between the United  States of America and Mongolia . Viewed at: 
https://ustr.gov/sites/default/files/US -Mongolia%20Transparency%2 0Agreement -English -Final-
As%20Posted.pdf . 
10 Ministry of Foreign Affairs, Action Program of the Government of Mongolia for 2016 -20. Viewed at: 
http://www.mfa.gov.mn/wp -content/uploads/2015/06/2016 -2020_Gov_AP_Eng_Revised.pdf.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 31 - 
 
  mining. It is also highly concentrated in terms of source, as it is very dependent on a few countries.11 
The Government is cognizant of this issue, and is currently working on a draft Investment Policy 
Statement of the Government of Mongolia, with the collaboration of government and private sector 
stakeholders. The draft plans to identify and define new non -mining sectors that have potential for 
attracting FDI, eliminate investment barriers, and promote efficient long -term FDI.  
2.37.   In cooperation with the International Finance Corporation of the World Bank Group, Mongolia 
developed and published the Investment Re form Map research report in 2018. The study is a 
comprehensive examination of the legal and economic environment for FDI in Mongolia. It proposes 
short-, medium -, and long -term government plans to improve the investment climate. Initial findings 
from inter views with the private sector and the Government indicate that sectors including 
downstream processing activities linked to mining, tourism and hospitality, leather and agriculture, 
and agribusiness have the potential and the opportunities in the medium te rm to attract FDI.12 
2.38.   In line with Section 2.1.7 of the Mongolia Sustainable Development Vision 2030, which was 
adopted in 2016, the Government plans to create a favourable business environment through 
improving services, developing transportation and logis tics networks, simplifying the issuance of 
special licences, and digitalizing and improving tax payments. All of these aim to improve the 
business climate and attract investors.  
2.39.   Mongolia has an important framework of laws and policy infrastructure to suppo rt and 
promote investment (Box 2.1). To protect and promote FDI, the Government concluded Agreements 
on the Promotion and Mutual Protection of FDI (also referred to as bilateral investment treaties 
(BITs)) with 44 countries and Agreements on the Avoidance of Double Taxation with 29 countries, 
of which 25 have entered into force.13 Mongolia's membership in the Multilateral Investment 
Guarantee Agency Convention dates from 1998.14 
Box 2.1 Investment framework, 2020  
Investment Law, 2013  
Seoul Convention on Establishing the Multilateral Investment Guarantee Agency  
Washington Convention on the Settlement of Investment Disputes  
Bilateral investment treaties (BITs)  
Double taxation treaties  
FTAs with Japan and the APTA that have investment provisions  
Source:  Information provided by the authorities.  
2.40.   Mongolia's main law on investment remains the Investment Law, 2013, which did not undergo 
significant revision.15 This Law has provisions for more equal treatment between domestic and 
foreign investors, a point that improved on the previous law, although a minimum threshold remains 
for foreign investors retaining more than a 25% share (Table 2.5). The Law also provid es for tax 
and non -tax incentives for investors, and aims to provide stability through tax stabilization 
certificates that set out these special tax provisions, the term being determined by the amount of 
the investment. The Law and an amendment in 2016 pro vide for an investment agreement to be 
entered into for investments of over MNT 500 billion.16 Special permissions are required if the 
 
11 Foreign Direct Investment (FD I), and its Importance , Doojav, G -O, Investment Climate: Stability 
Conference, Ulaanbaatar, 22 October 2019. Viewed at: 
https://www.mongolbank.mn/documents/press_conferen ce/20191022_01e.pdf .  
12 World Bank Group, Investment Reform Map for Mongolia: A Foundation for a New Investment Policy & 
Promotion Strategy , June 2018. Viewed at: https://www.ifc.org/wps/wcm/connect/8fbd4a65 -c979-4cbc-858f-
ca27677d30e7/Mongolia+Investment+Reform+Map+2018.pdf?MOD=AJPERES&CVID=mnSnUQT .  
13 Mongolian Tax Authority, Double Taxation Agreement . Viewed at: https://en.mta.mn/c/view/12118 .  
14 Legalinfo, Ratification of the Convention . Viewed at: 
https://www.legalinfo.mn/law/details/10117?lawid=10117 .  
15 Legalinfo, Law About Investment , 13 Octob er 2013. Viewed at: 
https://www.legalinfo.mn/law/details/9491 .  
16 Procedures for concluding an investment agreement are at Legalinfo, Resolution of the Government of 
Mongolia No. 52, Approval of Pro cedure , 21 February 2014. Viewed at: 
https://www.legalinfo.mn/law/details/9803 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 32 - 
 
  investor is a foreign state -owned enterprise (SOE) operating in certain sectors with at least a 33% 
share (Table 2.5).  
2.41.   Mongolia's FTA with Japan contains provisions on investment in Chapter 10 and Annexes 8 -10, 
including measures such as MFN treatment, national treatment, prohibition of performance 
requirements, expropriation and compensation, non -conforming measures, and se ttlement of 
investment disputes. The annexes contain a list of 18 reservations that do not conform to treaty 
obligations, and an understanding on expropriation.  
2.42.   As part of its investment framework, Mongolia had 44 BITs in place as at the end of July 2020, 
most of which have been in place for many years (Table 2. 4). During the review period, one new 
BIT with Canada entered into force in 2017. The Agreement between Mongolia and Canada on the 
Promotion and Reciprocal Protection of Investment is described as ha ving more detailed provisions 
on dispute settlement and preconditions for filing a case for arbitration compared to earlier BITs 
signed by Mongolia. As part of its investment policy, Mongolia plans to establish new BITs and update 
existing ones in accordan ce with the goals and principles set forth in the model Agreement on 
Investment Promotion and Mutual Protection, which was approved by the Government in 2019.  
Table 2.4 Bilateral investment treaties  
Partner  Date Entry into force  
Austria  22/05/2001  01/05/2002  
Belarus  28/05/2001  27/01/2002  
Belgium -Luxembourg  06/03/1992  15/03/2000  
Bulgaria  06/06/2000  a 
Canada  08/09/2016  27/02/2017  
China  26/08/1991  11/01/1993  
Croatia  08/08/2006  a 
Cuba 26/03/1999  18/10/2000  
Czech Republic  13/02/1998  05/07/1999  
Denmark  13/03/1995  11/08/1995  
Egypt  27/04/2004  25/01/2005  
Finland  15/05/2007  19/06/2008  
France  08/11/1991  22/12/1993  
Germany  26/06/1991  23/06/1996  
Hungary  13/09/1994  29/08/1995  
India 03/01/2001  29/04/2002  
Indonesia  04/03/1997  30/10/1998  
Israel  25/11/2003  02/09/2004  
Italy 15/01/1993  11/08/1995  
Japan  15/02/2001  24/03/2002  
Kazakhstan  12/02/1994  22/03/1995  
Korea, Democratic People's Republic of  10/11/2003  a 
Korea, Republic of  28/03/1991  30/04/1991  
Kuwait, the State of  15/03/1998  01/05/2000  
Kyrgyz Republic  04/12/1999  a 
Lao People's Democratic Republic  03/03/1994  29/12/1994  
Lithuania  27/06/2003  03/05/2004  
Malaysia  27/07/1995  14/01/1996  
Netherlands  09/03/1995  20/01/1996  
Philippines  01/09/2000  01/11/2001  
Poland  08/11/1995  05/02/1996  
Qatar  29/11/2007  a 
Romania  06/11/1995  15/08/1996  
Russian Federation  29/11/1995  06/02/2006  
Singapore  24/07/1995  14/12/1995  
Sweden  20/10/2003  19/03/2004  
Switzerland  29/01/1997  09/09/1999  
Tajikistan  20/03/2009  16/09/2009  
Turkey  16/03/1998  25/02/2000  
Ukraine  05/11/1992  05/11/1992  
United Arab Emirates  21/02/2001  a 
United Kingdom  04/10/1991  04/10/1991  
United  States  06/10/1994  01/04/1997  
Viet Nam 17/04/2000  13/12/2001  
a Has not yet entered into force.  
Source:  Information provided by the authorities.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 33 - 
 
  2.43.   There were several developments in the Government's structure and support for investment 
during the review period. In 2016, the Government closed the Invest Mongolia Agency, which had 
promoted Mongolian investment opportunities and assisted foreign investo rs in a number of areas. 
Near the same time, the National Development Agency (NDA) was designated as the State's 
administrative body in charge of investment matters. It oversees investment support and approval 
processes, determines priority sectors, conduc ts activities to attract and promote investment, and 
is involved in policy development.17 
2.44.   In December 2016, the Investor Protection Council was established, with a responsibility for 
overseeing the legal rights and interests of investors investing in Mongolia.18 Its main functions are 
to improve the investment climate, help provide better investment protection, regain investor 
confidence, and improve the process of receiving, monitoring, resolving, and responding to investor 
complaints. The Council ass essed administrative laws and regulations governing special licences that 
are allocated by the mining, infrastructure, and transport sectors, and annulled decrees that are 
inconsistent with the general administrative laws and respective regulations. The Sy stematic 
Investment Response Mechanism was set up at the NDA; it is an early warning and tracking 
mechanism to identify and resolve complaints that arise from government conduct. In 2018, one 
complaint was received, and it was transferred to the relevant g overnment organization. In 2019, 
six complaints were received, one of which was transferred to the relevant government organization, 
three were determined to be unfounded, one was resolved, and one was in the process of being 
resolved. As at August 2020, t hree complaints had been received, with one resolved and two in the 
process of being resolved.  
2.45.   In 2017, the Public -Private Consultative Committee was established under the purview of the 
Investor Protection Council to provide an avenue for discussing inve stment -related draft legislation 
and policy documents with affected parties. A joint decision of the Committee is necessary before 
changes are made in policies or laws. During 2018 -19, the Committee met 10 times to discuss a 
number of issues and receive me mbers' opinions. The main elements taken up during these two 
years were the tax agent service legislative package, the draft law on SMEs, the Investment Reform 
Map research report, the draft law on the Agricultural Commodity Exchange and related fees, the 
draft law on permits, and issues related to the draft concept of the law on supporting national 
production and wealth creators.  
2.46.   In terms of policy developments, the Invest in Mongolia One -Stop Service Centre (OSSC), 
under the NDA, for foreign investors was  established in February 2019 to facilitate the delivery of 
public services to investors, and to provide quick and easy access to foreign investors to satisfy their 
needs and increase confidence levels. The OSSC provides 62 types of public and private serv ices, 
and has provided more than 40,000 services since its inception. Ensuring transparency of 
information on a wide range of government services and providing these services from a single 
location make it easier for investors, save time and money, and imp rove their satisfaction. In the 
future, within the framework of the World Bank Group's Smart Government project, the OSSC will 
be digitalized and an Electronic One -Stop Shop Service will be introduced. The system is expected 
to be commissioned in 2021.  
2.47.   A number of investment incentives, both tax and non -tax, are provided for in Mongolia's Law 
on Investment and in sector legislation. Tax incentives include exemptions, credits, acceleration of 
depreciation and its deduction from taxable income, and deduction of employee training expenses. 
Imported machinery and equipment is eligible for customs tariff relief, as well as zero -rated 
value -added tax ( VAT), if used in certain designated sectors/areas, e.g. nano -bio and innovative 
technologies, construction materia ls, oil, agricultural processing, construction of power plants or 
railways, or for exported products.19 Non-tax incentives include land possession or lease periods; 
support for operations in industrial parks and free zones with preferential registration an d inspection 
procedures; support for the implementation of infrastructure, including labour issues; support for 
 
17 NDA. Viewed at: http://nda.gov.mn/ . 
18 It is under the purview of the NDA. Invest or Protection Council. Viewed at:  https://ipc.gov.mn/ . 
19 Individual incentives are specified in detail in the respective laws of the sectors.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 34 - 
 
  the financing of innovation projects and issuance of guarantees for the financing of exported 
products; visas and permanent residency permits; a nd other support.20 
2.48.   Since 2008, the Government has identified mining, information and technology, agricultural 
production, and tourism as priority sectors.21 More recently, the NDA, in cooperation with other 
ministries, has been working to develop a draft document identifying plans and strategies to increase 
the benefit of FDI and to attract it in particular sectors, including mining, processing, food, 
agriculture, light industry, energy, roads, transportation, logistics, tourism, and information 
technology . 
2.49.   Furthermore, Mongolia provides tax incentives depending on the size, industry, and location 
of the investment. For example, if an investor invests more than MNT 500 billion, an Investment 
Agreement may be concluded with the Government, providing for the stabilization of the tax 
environment, regulatory aspects, and financial support. An investor may obtain a certificate of 
stabilization that provides tax stabilization for four types of tax rates for 5 to 18 years, depending 
on the sector or region in which  it invests. Since the Investment Law came into force in 2013, the 
NDA has issued 15 stabilization certificates, totalling MNT 4.2 trillion.  
2.50.   A number of restrictions to foreign investment remain (Table 2. 5). Foreign investors are also 
prohibited from havin g licences for radio, television, and broadcasting services.22 
Table 2.5 Foreign investment restrictions, 2020  
Restriction  Source  
Land ownership by foreigners prohibited  Articles 5, 6, and 44 of the Land Law 
Minimum investment of USD 100,000, or the 
tugrik equivalent, for investments with more 
than a 25% share in the enterprise  Article  3.1.5 of the Investment Law  
Foreign SOE investment in the mining; 
banking and finance; or press, information, 
and commun ication sectors requires approval 
if the SOE owns 33% or more of the shares  Chapter 6 of the Investment Law  
Savings and loans cooperatives are prohibited 
from foreign ownership or operation  Article  5 of the Law on Savings and Loans 
Cooperatives  
Entity au thorized to conduct an Environmental 
Impact Assessment  Article  8 of the Law on Environmental Impact 
Assessment  
Ownership of explosive or blasting instruments 
manufacturer is limited to less than 49% of 
the shares  Article  11 of the Law on Controlling Move ment 
of Explosive Substances and Blasting 
Instruments  
Foreign entities are prohibited from harvesting 
and picking natural plants  Article  17 of the Law on Natural Plants  
Source:  As specified in the table.  
 
 
20 According to the Immigration Agency of Mongolia, in 2019, 996 new investors acquired visas and 
permanent residency permits in Mongolia, and 2,306 investors extended their visas and permanent residency 
permits.  
21 Legalinfo, Resolution No. 83 on List Approval of Priority Industry , 5 March 2008. Viewed at: 
https://www.legalinfo.mn/law/details/2643 . 
22 Parliament of Mongolia, 2019 Autumn Regular Session of the Parliament of Mongolia . Viewed at: 
http://parliament.mn/n/88ko . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 35 - 
 
  3  TRADE POLICIES AND PRACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.  Customs import procedures are governed by two main laws: the Customs Law, 2008, which 
provides the overall framework; and the Law on Customs Tariffs and Customs Taxes, 2008 , which 
covers the customs tariff, customs valuation, rules origin, and the payment and collection of customs 
duties.1 Both of these Laws underwent many amendments during the review period. In 2017, a new 
draft Customs Law was proposed, but as at October 2020, it had not yet been approved. The main 
reason for replacing the existing Law is to align it with other newly revi sed laws.2 Existing laws were 
changed to include provisions on the single window system, electronic data exchange, advance 
rulings, post -clearance audit, postal traffic, and inward and outward processing.  
3.2.  The Customs General Administration of  Mongolia (Mo ngolian Customs) is the main government 
agency in charge of importation and exportation procedures, including customs clearance and post -
clearance audit. In addition to the day -to-day operation of the border posts, Mongolian Customs has 
played a key role i n multilateral and bilateral negotiations, such as the WTO Trade Facilitation 
Agreement (TFA) and the Mongolia -Japan Economic Partnership Agreement (EPA). It also operates 
the Central Customs Laboratory. Since 1993, Mongolian Customs has also concluded bil ateral 
agreements on cooperation and mutual assistance in customs matters with 16 trading partners. 
Since December 2015, there has been a paperless exchange of customs information with the Russian 
Federation. In January 2016, Mongolian Customs was merged w ith the General Department of 
Taxation in order to ensure uniform application and implementation of customs and taxation laws 
and secure revenue collection.3 As at 2020, Mongolian Customs had 15 customs offices, 3 customs 
committees, and 12 customs branch es. Mongolia maintains 42 customs border posts: 29 along the 
Mongolia -Russian Federation border and 13 along the Mongolia -Chinese border.  
3.3.  The main procedures for importation are preparing and providing customs documents for the 
declaration of goods, custom s inspection of customs documents, inspection of the goods and means 
of transport, levying customs duties and other taxes and payments thereto, and granting permission 
and release of goods to cross the border.4 In 2008, Mongolia established a risk managem ent system 
on imports with three categories: (i) simplified examination (category "Green"); (ii) document 
examination (category "Orange"); and (iii) physical inspection (category "Red").5 During the first 
seven months of 2020, 87% of imports and 24% of ex ports were physically inspected, and 
approximately 1% were subject to post -clearance audit. Mongolia has provisions for the use of 
customs brokers and customs warehouses.  
3.4.  Since 2010, the Customs Automated Information System (CAIS) continues to be used as t he 
main system for the electronic clearance of goods. The main elements of the CAIS are its 24 -hour 
online availability, its integrated database for use by the customs authorities, and its easy website 
access. In 2016, with the help of the Asian Developmen t Bank (ADB), Mongolia embarked on a 
Customs Modernization Project and planned an entirely new CAIS.6 As at October 2020, a consulting 
company had been selected, business process re -engineering was underway, and certain programme 
 
1 Legalinfo, Law of Mongolia about Customs , 20 May 2008. Viewed at: 
https://www.legalinfo.mn/law/details/209?lawid=209 ; and Legalinfo, Law of Mongolia on Customs Tariffs and 
Customs Taxes , 20 May 2008. Viewed at: https://www.legalinfo.mn/law/details/208 . 
2 These include the General Administrative Law of Mongolia, the Law on Borders, the Law on 
Infringement, the Law on Infringement Proce dure, the Criminal Code, the Law on Criminal Procedure, the Law 
on Development Policy and Planning, the Law on Civil Service, and adopted bilateral and multilateral 
agreements, such as the WTO Trade Facilitation Agreement; the Framework Agreement between M ongolian, 
Russian Federation and Chinese Customs on Cooperation in the Field of Developing Border Crossing Points 
(2015); the Agreement between Mongolian, Russian and Chinese Customs on Mutual Recognition of Results of 
the Customs Control with Respect to C ertain Types of Goods (2016); and Agreements on Mutual Recognition of 
the Authorized Economic Operator Programs (with China and the Republic of Korea in 2019).  
3 Pursuant to the Law of 21 July 2016.  
4 These are mainly performed electronically through the C AIS. Mongolia Chamber of Commerce, Trade 
Policy . Viewed at: https://www.mongolchamber.mn/p/319 .  
5 WTO document WT/REG373/2, 26 March 2018.  
6 ADB, Mongolia: Customs Modernization Project . Viewed at: 
https://www.adb.org/sites/default/files/evaluation -document/188956/files/pper -mon-customs.pdf . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 36 - 
 
  modules were being develo ped. As part of its commitments under the TFA, Mongolia has also been 
working towards implementing a single window application.  The project has begun; a consulting 
company was selected and a business process study is underway.  
3.5.  Mongolia charges a number of fees in association with importation or exportation (Table 3.1). 
The fee is MNT 7,000 per declaration form, regardless of the value of the goods. If the goods 
declaration form is used, the same fee is charged for postal shipments and express ship ments.  
3.6.  Chapter 5 of the Customs Law provides for appeal of a customs decision. A complaint by an 
importer is first filed with the Head of the Customs within 30 days of receiving the decision. 
Thereafter, it may be raised to a higher level in Mongolian Cust oms and, lastly, with the courts – 
either the civil or administrative court depending on the case. In 2019, there were 43 appeals to 
Mongolian Customs, and 19 to courts.  
Table 3.1 Customs fees  
Types of fees fo r services rendered  Fee (MNT)  
Fees for customs clearance:  
- per main declaration form  
- per additional declaration form  7,000  
1,200  
Fees for on -the-spot customs examination at temporary customs control zones, upon 
request (hourly fees are added to the fees for customs clearance):  
- per hour during working hours  
- per hour outside of working hours, on weekends or holidays  4,000  
8,000  
Fees for customs clearance of goods of quantities over duty -free allowances carried by 
passengers and taxable intern ational postal items addressed to individuals  1,200  
Fees for customs clearance of goods transported by trucks:  
- per cargo manifest (A1)  3,000  
Fees for storage of goods in the customs bonded warehouses (the operators are obliged 
to pay such fees in a fix ed percentage of total value of the goods concerned)  0.1%  
Cost of the customs declaration forms (the main form, the additional form, and the 
annex), as well as the cargo manifest form sold to the customs brokers:  
- per set  1,200  
For export customs clearance of coal and mining sector mineral products:  
- per ton ne 1,500  
Cost of the customs seals for goods and means of transport crossing the customs 
border  1,000  
Source:  Mongolian Customs, Service Fees . Viewed at: https://www.customs.gov.mn/en/duties/fee . 
3.1.1.1   Trade facilitation  
3.7.  On 24 November 2016, Mongolia passed a law ratifying the Protocol on amending the 
Marrakesh Protocol for the Trade Facilitation Agreement and, thereafter, notified its instrument of 
ratification to the WTO on 28 November 2016.7 Mongolia has been committed to implementing the 
TFA, and has taken many steps in this regard. It has notified its Category A, B, and C commitments 
(Table 3.2), adopted the National Trade Facilita tion Roadmap, 2018 -22, and adopted the National 
Committee on Trade Facilitation Strategic Action Plan. The National Trade Facilitation Committee, 
chaired by the Minister of Foreign Affairs, was established in May 2017 with the objective of 
facilitating bot h domestic cross -sector coordination and the implementation of the provisions of the 
TFA. Furthermore, since 2006, Mongolia has adhered to the Kyoto Convention on Simplification of 
Customs Procedures.8 
3.8.  Mongolian Customs plays a major role in the implement ation of the TFA, as 98% of all 
provisions of Section I of the TFA are directly or indirectly connected to customs functions. The 
Roadmap envisages the implementation of many significant customs issues, for example, elimination 
of duplicate processes at th e border by control agencies, expeditious and straightforward customs 
 
7 Legalinfo, Law on Joining the Protocol on Amendments to  the Marrakesh Negotiations on the 
Establishment of the World Trade Organization , 24 November 2016. Viewed at: 
https://www.legalinfo.mn/law/details/12262 ; and WTO TFA Facility, Ratifications List . Viewed at: 
https://www.tfafacility.org/ratifications . 
8 Legalinfo, Law of Mongolia on Customs Clearance  Procedure for Simplification and Coordination , 
26 May 2006. Viewed at: https://www.legalinfo.mn/law/details/9970?lawid=9970 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 37 - 
 
  clearance, and supply of electronic services. Most of these elements are in the process of being 
implemented.  
3.9.  According to the authorities, a number of elements have been implemented thu s far, including 
risk management, electronic payment systems, the authorized economic operator (AEO) 
programme, customs cooperation, and e -clearance. Mongolian Customs implemented risk -based 
customs control in 2008, pursuant to a 2008 amendment to the Cust oms Law. In 2011, under the 
Mongolian Customs Modernization Project, one of the sub -modules (risk selectivity system) of the 
CAIS was developed and implemented. With this implementation, the number of physical inspections 
and documentary checks was reduced  by about 48% since 2013.  
3.10.   Mongolian Customs conducted time release studies (TRSs) in 2010, 2012, 2014, 2017, and 
2019. The most recent was in October 2019, with a provisional report issued and the final report 
expected in 2020. Several challenges arose, in cluding summarizing the TRS findings, as there was 
a lack of necessary software. The AEO Programme has been in place since 2018 and, according to 
the authorities, the response from local industries has been positive. However, as at October 2020, 
there were  no authorized AEO companies. Work was planned in 2020 for the evaluation and 
authorization of one or two companies. Mongolia signed mutual recognition agreements (MRAs) with 
the customs administrations of China and the Republic of Korea, with no plans to sign more at this 
time. 
3.11.   Pursuant to the TFA Roadmap, Mongolia was to have implemented six Category B and nine 
Category C commitments by 2020. According to the authorities, as at September 2020, six 
Category  B commitments had been implemented.9 The final i mplementation of all category 
commitments is scheduled for 2025.  As at September 2020, Mongolia was planning to start 
monitoring implementation.  
3.12.   Mongolia has provisions for advance rulings for classification, but not on origin or any other 
matters.  
Table 3.2 Overview of TFA category commitments notified  
Category A  Category B  Category C  
1.4 Notification  
2.2 Consultations  
4. Procedures for Appeal or Review  
5.2 Detention  
6.1 General Disciplines on Fees and 
Charges Imposed on or in 
Connection with Importation and 
Exportation  
6.2 Specific Disciplines on Fees and 
Charges for Customs Processing 
Imposed on or in Connection with 
Importation and Exportation  
10.1 Formalities and Documentation 
Requirements  
10.2 Accep tance of Copies  
10.7 Common Border Procedures 
and Uniform Documentation 
Requirements  
10.8 Rejected Goods  
11. Freedom of Transit  1.3 Enquiry points  
2.1 Opportunity to Comment and 
Information Before Entry into Force  
5.1 Notification for Enhanced 
Controls or Inspections  
5.3 Test Procedures  
6.3 Penalty Disciplines  
7.2 Electronic Payment  
7.3 Separation of Release from Final 
Determination of Customs Duties, 
Taxes, Fees and Charges  
9. Movement of Goods Intended for 
Import under Customs Control  
10.5 Pre -shipment In spection  
10.9 Temporary Admission of Goods 
and Inward and Outward Processing  
12. Customs Cooperation  1.1 Publication  
1.2 Information Available through 
Internet  
3. Advance Rulings  
7.1 Pre-arrival Processing  
7.4 Risk Management  
7.5 Post -clearance Audit  
7.6 Establishment and Publication of 
Average Release Times  
7.7 Trade Facilitation Measures for 
Authorized Operators  
7.8 Expedited Shipments  
7.9 Perishable Goods  
8. Border Agency Cooperation  
10.3 Use of International Standards  
10.4 Single Window  
10.6 Use of Cus toms Brokers  
Source:  WTO documents WT/PCTF/N/MNG/1, 29 July 2014 ; and G/TFA/N/MNG/1, 26 February 2018.  
 
9 These are 1.3, 2.1, 7.2, 9, 10.5, and 12.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 38 - 
 
  3.1.1.2   Customs valuation  
3.13.   The rules for customs valuation are contained in Chapter 4 of the Law on Customs Tariffs and 
Customs Taxes, 2008, and did not undergo any significant modification during the review period.10 
Mongolia has never notified its customs valuation rules to the Committee on Customs Valuation.  
3.14.   The Law lists six possible methodologies for determining the value upon importation: 
(i) transaction va lue; (ii) transaction value of identical goods; (iii)  transaction value of similar goods; 
(iv) deductive value; (v) computed value; and (vi) fall -back or residual method. The methods are 
hierarchal, starting with the transaction value method, and only if a  methodology cannot be used 
does one move to the next one in order, i.e. from (i) through to (vi). The c.i.f. price is used as the 
basis for customs valuation in all the methodologies.  
3.15.   The transaction value method is the main method for valuation and is de fined as the actual 
price paid or to be paid, directly or indirectly, to the seller of goods purchased abroad (Chart 3.1). 
In determining the transaction value, the costs of transportation (i.e. including unloading/loading, 
storage, and insurance) to the b order; commission and brokerage fees; the cost of related works, 
goods , and services; payments for intellectual property; and payments for the sale, disposal, or use 
of the goods are to be added to the value if they are not already included or expressed se parately. 
Certain conditions prohibit the use of the transaction value method, such as if the parties are related, 
conditions on the sale or use, or other restrictions related to the sale.11 However , in the case of 
related parties, the transaction value ma y be used if the value is close to the value of trade of 
unrelated parties or of identical or similar goods previously accepted for valuation purposes.  
3.16.   If value cannot be determined by the transaction value method, the transaction value of 
identical goods shall be used. Identical goods are defined as those with the same physical properties, 
production methods, technical characteristics, quality, trademark, country of origin, and 
manufacturer; slight differences in qualities are not grounds f or refusal to use this methodology. 
Adjustments may be made for different quantities, or distance and means of transport. Certain 
categories of goods cannot be used to determine the customs value of identical goods, including 
leased goods, humanitarian aid  goods, sample goods, goods imported through credit lines, and 
goods imported using foreign investment.12 
3.17.   The transaction value of similar goods, i.e. goods that are not identical in all respects, is the 
next valuation method if the first two methods canno t be used. The same adjustments and 
restrictions outlined above for the transaction value of identical goods method are also applicable 
for the transaction value of similar goods method. The deductive value method is the next 
methodology, and it is based o n accounting documents that provide the unit price of the goods13, or 
that of identical or similar goods not sold to related parties. If customs value cannot be determined 
by the above methods, the computed value method is used, which adds together the dir ect 
production costs; additional production costs; operating expenses; net profit; transportation; 
commission and brokerage fees; payment for intellectual property; costs of related works, goods, 
or services provided free of charge or discounted; and costs  paid by the buyer for the sale, disposal, 
and use of the goods. Lastly, if none of the above methodologies can be used, the last one is the 
fall-back or residual method, which allows for the basic principles of the above methodologies with 
certain flexibi lities or easing of criteria.14 It also specifies seven practices that cannot be used, such 
as the price of goods on the domestic market or minimum prices.15 
3.18.   In practice, the transaction value method is the predominant methodology used for customs 
valuatio n, followed by the fall -back method (Chart 3.1).  During the review period, use of transaction 
value increased, from 76% to 84% of the total number of import declarations, while use of other 
methodologies16 declined accordingly, from 24% to 16%. The main re ason for this shift is the 
 
10 Legalinfo, Law on Customs Tariffs and Customs Taxes , 20 May 2008. Viewed at: 
https://www.legalinfo.mn/law/details/208 . 
11 A full list of prohibitions is contained in Article  10.7 of the Law of Mongolia on Customs Tariffs and 
Customs Taxes.  
12 A full li st is contained in Article  11.10 of the Law of Mongolia on Customs Tariffs and Customs Taxes.  
13 The following are subtracted from the unit price: sale costs, net profit, commissions, transportation 
and insurance in Mongolia, and customs and other taxes.  
14 As outlined in Article  15.2 of the Law of Mongolia on Customs Tariffs and Customs Taxes.  
15 Article  15.3 of the Law of Mongolia on Customs Tariffs and Customs Taxes.  
16 Transaction value of identical goods, transaction value of similar goods, and the fall -back methods.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 39 - 
 
  increasing submission of transaction values in the declarations by traders importing used cars from 
Japan, where the inclusion of verifiable auction documents has become the norm, thus allowing for 
the use of the transaction valu e method.  
Chart 3.1 Use of different customs valuation methodologies, 2013 -19 
 
Source:  Data provided by the authorities.  
3.19.   Separate rules are in place for the customs value of exported goods (Section 3.2.1).  
3.1.2   Rules of origin  
3.20.   Mongolia applies both preferential and non -preferential rules of origin depending on the tariff 
regime applied. Since 2016, preferential rules of origin as contained in the EPA  between Mongolia 
and Japan have been applied to goods from Japan where preferences are applicable. With the entry 
into force of the Asia -Pacific Trade Agreement (APTA) on 1 January 2021, the rules of origin of this 
Agreement also apply to preferential trade from the other APTA parties.  
3.21.   The main framework for rules of origin is Chapter 7 of the Law on Customs Tariffs and Customs 
Taxes, 2008. Articles 28 -30 outline the rules for non -preferential rules of origin (Chart 3.2). 
Article  26 further notes that the Government shall approve the rul es of origin for the purposes of 
applying MFN and preferential tariffs. In February 2016, a government resolution further specified 
the rules of origin pursuant to Article  26; this again evolved, and the rules of origin were changed 
in December 2016 by ano ther resolution.17 These changes were necessary to  improve the process 
in order to meet the requirements, in part related to the implementation of the EPA with Japan. Prior 
to February 2016, Resolution No. 88 of 1 April 2009 provided the applicable origin rules.18 
3.22.   The December 2016 Government Resolution sets out the current rules of origin for Mongolia.19 
They specify that the declarant shall select and declare the type of customs tariff regime, i.e. MFN, 
preferential, or normal, and submit the customs decl aration with the provisions and proof for 
determining origin per the respective regime. Upon importation, Mongolian Customs verifies the 
declared origin of the goods, whether the documents proving the origin are correct, and whether the 
general conditions of origin, preferential rules , or other requirements are met. This verification can 
occur during or after customs clearance. Mongolian Customs furthermore determines the relevant 
tariff regime. If the declarant does not accept Mongolian Customs' decision o n origin, they may 
appeal to the central customs administration. The declarant may request an origin determination in 
advance, i.e. advance ruling, pursuant to Article  27.2 of the Law on Customs Tariffs and Customs 
Taxes.  
3.23.   According to Article  31 of the sam e Law, three documents prove the origin of goods: (i) a 
declaration of origin of goods or a price invoice or transport document containing information on the 
origin of goods from the manufacturer, seller, or exporter; (ii) a declaration confirming the orig in 
certified by the competent authority of the country; or (iii) a certificate of origin issued by a 
competent authority of the exporting country as per a special form. Proof of origin is not required in 
 
17 Legalinfo, Government Resolution No. 101 on Re -approval of the Rules of Origin of Imported Goods , 
15 February 2016. Viewed at: https://www.legalinfo.mn/law/details/11744 . 
18 Legalinfo,  Government Resolution No. 88 on Approval of the Rules of Origin of Goods , 1 April 2009. 
Viewed at: https://www.legalinfo.mn/law/details/2008 .  
19 Annex 1 to Government Resolution No. 209 of 2016.  
24% 25%21% 19%15% 16% 16%76% 75%79% 81%85% 84% 84%
0%20%40%60%80%100%
2013 2014 2015 2016 2017 2018 2019Chart 3.1 Use of different customs valuation methodologies, 2013 -19
Source: Data provided by the authorities.Transaction value method
Other valuation methods:
transaction value of identical goods;
transaction value of similar goods; and
fall-back methodPercentage of import declarationsWT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 40 - 
 
  certain cases such as for temporary imports, goods i n transit, personal belongings, commercial 
goods with a customs value not exceeding USD 1,500, and goods that do not require proof per a 
bilateral or multilateral treaty.  
Chart 3.2 Rules of origin for MFN trad e 
Source:  Legalinfo, Law on Customs Tariffs and Customs Taxes , 20 May 2008. Viewed at: 
https://www.legalinfo.mn/law/details/208 . 
3.24.   Preferential rules of origin contained in the EPA with Japan provide several different 
methodologies, including wholly obtained, produced entirely in the party exclusively of originating 
materials of the party, or pursuant to the product -specific rules as outlined in the annex. The 
product -specific rules are defined by HS c ode and are of three basic types  (generally with the option 
to choose): change in tariff classification (at the HS 2 -, 4-, or 6-digit levels); qualifying value content 
(either 40% or 50%); or specific manufacturing process (for textile goods only, HS Chapters 50 -63). 
Source:     Chart 3.2   Rules of origin for MFN trade
Produced in two or more countries
Determined by significant processing
•The commodity classification code has 
changed at the item level of the 
Harmonized System due to the 
processing or production of goods;
•If the production and technological 
activities undertaken on the goods are 
sufficient to consider the country as the 
country of origin of the goods;
•The value of materials or value added 
used in the goods is 50% or more of 
the cost of the final product.
(The following activities shall not be 
included in the criteria for significant 
processing of goods:  activities aimed at 
ensuring the integrity of goods during 
storage and transportation; activities to 
prepare goods for sale and transportation; 
simple assembly operation; and the act of 
mixing goods of different origin.)If notWholly obtained in one country
•Mineral products extracted from the country, 
its subsoil, and territorial waters;
•Vegetables harvested in the country;
•Live animals born and raised in the country;
•Products of animal origin of the country;
•Hunting and fishing products hunted in the 
territory of the State;
•Marine fishing products and other products 
extracted from the sea by a ship of that 
country;
•Products manufactured on a ship of that 
country using the marine fishing products and 
other products extracted from the sea noted 
above;
•Mineral products extracted from the seabed 
that are not related to the territorial waters of 
the country;
•Used items, industrial waste, and waste
collected in the country for raw materials;
•Goods manufactured in that country using the 
products .
Special provisions :
•Goods shipped in several shipments or not assembled or disassembled, as well as goods received 
separately from several shipments can be considered as one good under certain conditions.
•The goods shall be considered as one commodity if the reasons for not assembling or disassembling 
are provided, if they are supplied from one country and one consignor, if they are declared to one 
Customs office, and if they are delivered to the Customs' territory within three months of receiving.
•If machinery, equipment, apparatus, and means of transport are supplied together with spare parts, 
equipment, and tools required for their use, their country of origin shall be the same.
•The packaging of goods imported shall be of the same origin as the goods, except for its separate 
declaration.
•The country of origin of electricity, machinery, equipment, and tools used in its production and 
processing shall not be taken into account.WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 41 - 
 
  The agreement also has provisions for accumulation, de minimis , and a certificate of origin.20 These 
preferential rules build upon Mongolia's non -preferential rules of origin in that they provide 
essentially the same list of wholly obtained goods and allow for the change in HS classification, 
production processes, or value -added methods to determin e origin. However, the qualifying value 
content is a minimum of 40%, in most cases, for the preferential regime compared to 50% for 
non-preferential trade.  
3.25.   The rules of origin for the APTA are contained in the First Amendment to the APTA from 2005, 
and were amended in 2017. The current rules of origin provide for goods wholly produced or 
obtained, value criteria (i.e. non -originating does not exceed 55% of the f.o.b. value), sectoral 
agreements, and cumulative rules (i.e. aggregate content of the partici pating States is not less than 
60% of the f.o.b. value). The sectoral rules of origin were concluded as part of the 2017 amendments 
but have not entered into force yet.21 
3.26.   In September 2016, Mongolia notified to the WTO Committee on Rules of Origin its 
preferential rules of origin pursuant to the EPA with Japan.22 In 2018, it re -notified these preferential 
rules of origin, and also notified non -preferential rules of origin.23 These rules of origin were notified 
to the WTO pursuant to the amendments of 9 Dece mber 2016 to the Law on Customs Tariffs and 
Taxes.  
3.1.3   Tariffs  
3.27.   The Law on Customs Tariffs and Customs Taxes and a related resolution set out three types 
of customs tariffs on imported goods, as follows:  
• MFN, as specified in the List of Countries with the Most Favourable Customs Tariffs24; 
• preferential, as specified in the List of Countries subject to Preferential Customs Tariffs25 and 
conditions specified in international treaties to which Mongolia is a party; and  
• normal, which is double the rate of MFN tariffs . 
3.28.   The Parliament establishes the MFN tariff for imported goods, while preferential tariffs are 
determined by the underlying international agreements. Customs duties may take the form of 
ad valorem , specific, or a combination of the two; at present, Mongoli a has only ad valorem  tariffs.  
3.29.   Seasonal tariffs  may also be applied for a period not exceeding six months. Since 2011, 
seasonal tariffs have been applied on certain flour products (Table 3.3). The rates of duty are either 
5% or 15%, depending on the season  and on the border post where importation takes place.  
 
20 WTO document WT/REG373/1/Rev.1, 26 June 2018.  
21 The sectoral rules apply to a limited number of tariff lines/sectors and determine origin by a change in 
tariff heading. The sectors include certain beverages and spirits; mineral fuels; organic chemicals; pl astics; 
synthetic rubber; footwear; pharmaceuticals; articles of stone, plaster, and cement; iron and steel, including 
articles; and other metals (copper, nickel, aluminium, lead, zinc, and tin) including articles thereof; electrical 
machinery and equipmen t and parts; and miscellaneous manufactured articles.  
22 WTO document G/RO/N/144, 12 September 2016.  
23 WTO document G/RO/N/164, 3 April 2018.  
24 Legalinfo, Annex 2 to Government Resolution No. 209 on Renovation of Rules and List  specifies that 
the MFN tariff  applies to WTO Members and the Republic of Belarus. Viewed at: 
https://www.legalinfo.mn/annex/details/7543?lawid=12352 . 
25 Legalinfo, Annex 3 to Government Resolution No. 209  specifies  that Japan is the only country that is 
entitled to preferential tariffs. Viewed at: https://www.legalinfo.mn/annex/details/7544?lawid=12352 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 42 - 
 
  Table 3.3 Seasonal tariff rates  
No. HS code  Product/commodity  MFN applied  
1 11.01  Wheat or meslin flour  
Imported at Tsagaannuur, Yarant, Borshoo, Artssuuri, and 
Burgastai  
between July 1 and April 1  
between April 1 and July 1  
 
Imported at other borders   
 
 
15 
5 
 
15 
2 11.02  Cereal flour other than of wheat or meslin  
Imported at Tsagaannuur, Yarant, Borshoo, Artssuuri, and 
Burgastai  
between July 1 and April 1  
between April 1 and July 1  
 
Imported at other borders   
 
 
15 
5 
 
15 
Source:  Legalinfo, Parliament Resolution No. 19 on Amendments to the Appendix to the Resolution , 
6 May 2011. Viewed at: https://www.legalinfo.mn/additional/details/1074?lawid=6093 . 
3.30.   Mongolia does not maintain any tariff -rate quotas but does have absolute quotas on strategic 
food items (Section 3.1.5  and Table 3.14).  
3.1.3.1   Bound and applied rates  
3.31.   As was the case at the last Review, Mongolia maintains the majority (i.e. 94%) of applied 
tariffs at 5%, with a few notable exceptions in the alcohol, tobacco, agriculture, and wool sectors. 
Bound rates remain unchang ed. The majority are at 20%, with the highest at 75% (certain spirits 
(HS 2207)), giving an overall average for bound rates of 17.6%. Mongolia adopted the 2017 
nomenclature of the Harmonized Commodity Description and Coding System (HS) in 2017; however, 
its WTO bound schedule is in the HS12 nomenclature.  
3.32.   Since the last Review, the simple average applied tariff rate increased slightly from 5.0% to 
5.3%, with rates of agricultural products (7.0%) slightly higher than non -agricultural products 
(5.1%) (Table 3. 4). The reason for this increase was mainly due to the increase in tariffs for certain 
alcohol, tobacco, and agricultural products, which also contributed to higher peak tariffs. According 
to the authorities, tariffs were increased up to the level of its b ound commitments during 2015 -17 
on these goods. Another development was the increase in "prohibited" tariff lines, from 3 to 111. 
Although indicated as "prohibited" , there were some imports of these goods. According to the 
authorities , it is more appropria te to refer to these as prohibited or restricted goods. The large 
increase during the period from 3 to 111 is mainly due to adding tariff lines of goods prohibited by 
international conventions, e.g. Montreal Protocol on Substances that Deplete the Ozone La yer, 
Stockholm Convention on Persistent Organic Pollutants, and Basel Convention on the Control of 
Transboundary Movements of Hazardous Wastes and their Disposal.  
Table 3.4 Structure of the tariff schedule, 2013 and 2020  
 
MFN applied  
Final bounda 2013  2020  
Simple average rate (%)  5.0 5.3 17.6 
WTO agricultural products  5.2 7.0 19.1 
WTO non -agricultural products  5.0 5.1 17.3 
Duty-free tariff lines (% of all tariff lines)  0.8 0.9 1.6 
Simple average of dutiable lines only  5.0 5.4 17.8 
Tariff quotas (% of all tariff lines)  0.0 0.0 0.0 
Non-ad valorem  tariffs (% of all tariff lines)  0.0 0.0 0.0 
Domestic tariff "peaks" (% of all tariff lines)b 0.2 1.3 0.05 
International tariff "peaks" (% of all tariff lines)c 0.02 1.3 77.4 
Nuisance applied rates (% of all tariff lines)d 0.0 0.0 0.0 WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 43 - 
 
   
MFN applied  
Final bounda 2013  2020  
Standard deviation  0.7 2.6 6.3 
Bound tariff lines (% of all tariff lines)  100.0  100.0  100.0  
Total number of tariff lines 5,722  6,020  6,020  
Ad valorem  rates (>0%)  5,671  5,855  5,922  
Ad valorem  rates at 5%e 5,652  5,679  13 
Duty-free ratese 48 54 98 
Prohibited/restricted lines  3 111  
a Based on the 2020 tariff schedule. Latest certified bound data are provided in the HS12 
nomenclature.  
 Concordance with HS17 is done to the best possible extent.  
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
c International tariff peaks are defined as those exceeding 15%. In 2013, only one tariff line exceeded 
15%.  
d Nuisance rates are those greater than zero, but less than or equal to 2%.  
e Only rates fully applied at the 8 -digit level.  
Note:  Calculations for averages are based on the national 8 -digit tariff line level.  
 The 2013 and 2020 tariff schedules are based on the HS12 and HS17 nomenclature, respectively . 
 No applied MFN rate is provided for prohibited/restricted tariff lines. Hence, they  are excluded from 
the calculations.  
Source:  WTO Secretariat calculations, based on data provided by the authorities to the IDB and the CTS.  
3.33.   As shown in Chart 3.3, most changes in the applied rates since 2013 were in the beverage, 
animal products, and arti cles of stone sectors. Mongolia also maintains a significant binding overhang 
of about 15% on most categories of goods; however, a number of applied tariffs exceed the bound 
rates. Approximately 90 tariff lines, mostly in the pharmaceutical and machinery a nd equipment 
sectors, have been identified as exceeding the bound rate (Table A3.1). According to the authorities, 
Mongolia plans to bring these tariffs into alignment with its commitments.  
Chart 3.3 Average applied MFN and bound tariff rates, by HS section, 2013 and 2020  
 
Note:  The 2013 tariff is based on HS12; the 2020 tariff and final bound rates are based on HS17.  
Source:  WTO Secretariat calculations, based on data pro vided by the authorities to the IDB and the CTS.  
0%5%10%15%20%25%30%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21TotalChart 3.[MNG]  Average applied MFN and bound tariff rates, by HS section, 2013 and 2020
01   Live animals & products        
02   Vegetable products
03   Fats & oils      
04   Prepared food, beverages
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals & products
16   Machinery
17   Transport equipment
18   Precision instruments19   Arms & ammunition
20   Miscellaneous manufacturing
21   Works of art, etc.MFN 2020 Final bound
Note:  The 2013 tariff is based on HS12 nomenclature; the 2020 tariff and final bound rates are based on HS17.  
Source:  WTO Secretariat calculations, based on data provided by the authorities to IDB and CTS.MFN 2013WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 44 - 
 
  3.34.   The applied tariffs range from zero to 40%, with spirits accounting for the peak tariffs at 40% 
(Table 3.5). The sectors with the highest averages are beverages, spirits and tobacco, and dairy, 
with nearly a ll other sectors averaging around 5%. Most prohibited/restricted lines are in the 
chemicals sector. The lowest duty rates, i.e. 0%, are found in the live animals and products, mineral 
products, machinery, and precision equipment sectors. Relatively few tar iffs are duty -free (0.9%), 
while 94% are applied at 5% (Chart 3.4). The next largest category is prohibited/restricted goods ; 
the category accounts for 1.8% of all tariff lines.  
Table 3.5 MFN applied summary, 2020  
 Number 
of lines  Prohibited 
tariff lines 
(No.)  Average 
(%) Standard 
deviation  Range (%)  
MFN 
applied  Bound  
Total  6,020  111 5.3 2.6 0-40 0-75 
HS 01 -24 1,048  11 6.7 5.2 0-40 0-75 
HS 25 -97 4,972  100 5.1 1.3 0-20 0-30 
By WTO category        
WTO agricultural products  900 10 7.0 5.6 0-40 0-75 
 Animals and products thereof  128  
7.5 5.0 0-20 0-20 
 Dairy products  27  
12.2 4.8 5-20 15-20 
 Fruit, vegetables, and plants  220 5 5.7 3.1 5-20 10-20 
 Coffee and tea  26  
5.0 0.0 5-5 15-20 
 Cereals and preparations  103  
5.9 2.6 5-15 15-20 
 Oil seeds, fats, oil and their products  83 1 5.0 0.0 5-5 15-20 
 Sugars and confectionery  20  
5.0 0.0 5-5 15-20 
 Beverages, spirits and tobacco  82 3 17.7 11.1 5-40 15-75 
 Cotton  5  
5.0 0.0 5-5 15-20 
 Other agricultural products, n.e.s.  206 1 5.0 0.0 5-5 15-20 
WTO non -agricultural products  5,120  101 5.1 1.3 0-20 0-30 
 Fish and fishery products  260 1 5.0 0.0 5-5 20-20 
 Minerals and metals  974 4 5.2 1.8 5-20 6.5-20 
 Chemicals and photographic supplies  998 93 5.0 0.1 5-6.5 0-20 
 Wood, pulp, paper and furniture  287  
5.4 2.5 5-20 10-30 
 Textiles  609  
5.1 1.0 5-20 0-30 
 Clothing  272  
5.2 1.8 5-20 20-30 
 Leather, rubber, footwear and travel 
goods  206 2 5.1 1.0 5-20 20-20 
 Non-electric machinery  547  
4.9 0.6 0-5 0-20 
 Electric machinery  256 1 4.7 1.1 0-5 0-20 
 Transport equipment  293  
5.0 0.0 5-5 20-20 
 Non-agricultural products, n.e.s.  392  
4.7 1.1 0-5 6.5-30 
 Petroleum  26  
4.0 1.7 0-5 20-20 
By HS section        
 01 Live animals and products  411 2 6.3 3.6 0-20 0-20 
 02 Vegetable products  329 6 5.6 2.7 5-20 10-20 
 03 Fats and oils  48  
5.0 0.0 5-5 15-20 
 04 Prepared food, beverages and tobacco  260 3 9.2 8.5 5-40 15-75 
 05 Mineral products  205 2 5.2 2.4 0-20 20-20 
 06 Chemicals and products thereof  934 87 5.0 0.0 5-5 0-20 
 07 Plastics, rubber, and articles thereof  216 8 5.0 0.1 5-6.5 6.5-20 
 08 Raw hides and skins, leather, and its 
products  141  
5.0 0.0 5-5 20-20 
 09 Wood and articles of wood  124  
5.3 1.9 5-20 5-30 
 10 Pulp of wood, paper and paperboard  143  
5.2 1.8 5-20 20-20 
 11 Textiles and textile articles  886  
5.1 1.3 5-20 5-30 
 12 Footwear, headgear, etc.  59  
5.3 1.9 5-20 20-20 
 13 Articles of stone, plaster, cement  169 2 6.0 3.5 5-20 20-20 
 14 Precious stones and metals, pearls  57  
5.0 0.0 5-5 20-20 
 15 Base metals and articles thereof  567  
5.0 0.0 5-5 20-20 WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 45 - 
 
   Number 
of lines  Prohibited 
tariff lines 
(No.)  Average 
(%) Standard 
deviation  Range (%)  
MFN 
applied  Bound  
 16 Machinery, electrical equipment, etc.  806 1 4.9 0.8 0-5 0-20 
 17 Transport equipment  304  
5.0 0.0 5-5 20-20 
 18 Precision equipment  210  
4.5 1.5 0-5 10-20 
 19 Arms and ammunition  18  
5.0 0.0 5-5 30-30 
 20 Miscellaneous manufactured articles  126  
5.5 2.6 5-20 20-30 
 21 Works of art, etc.  7  
5.0 0.0 5-5 20-20 
Note:  No applied MFN rate is provided for prohibited/restricted tariff lines. Hence, they are excluded from 
the calculations.  
Source:  WTO Secretariat calculations, based on data provided by the authorities to the IDB and the CTS.  
Chart 3.4 Distribution of MFN tariff rates, 2020  
 
Source:  WTO Secretariat calculations, based on data provided by th e authorities to the IDB.  
3.1.3.2   Duty exemptions  
3.35.   Mongolia has many tariff exemptions, either outlined in its main tariff law or in specific duty 
exemption laws or resolutions. The main list of goods exempt from customs duties has been 
expanded since the last Review, with five new categories added during 2014-17: international postal 
items, special machinery and equipment for exploration, items related to the petroleum sector, 
renewable energy research and production equipment, and sports equipment (Box 3.1).  
3.36.   In addition to this main list, which is specif ied in the Law on Customs Tariffs and Customs 
Taxes, various laws and government resolutions exempting goods from customs duties and often 
also VAT were adopted. These exemptions are generally pursuant to individual customs tax 
exemption laws (Table 3.6). According to the authorities, duty exemptions were put in place to 
maintain economic performance; support supply chains, domestic production, and 
companies/enterprises; and to scale depending on the current social or economic situation.  
Box 3.1 Goods exempt from customs duties  
Special -purpose devices, prosthetic organs, and their parts for persons with disabilities  
Humanitarian and grant aid goods  
Currency, Mongolian currency ordered abroad  
Personal belongings of passengers  
Blood, blood products, tissues, and organs to be used for medical purposes  
Gas fuel, its containers, equipment, special -purpose vehicles, and machinery and equipmenta 
Round timber, logs, sawn materials, seeds of trees and shrubs , seedlings, and saplings other than prohibited  
Civilian passenger transport vessels and their spare parts  
Chart 3.4  Distribution of MFN tariff rates, 2020
Source:  WTO Secretariat calculations, based on data provided by the authorities to IDB.5%:
94.3%Prohibited/Restricted: 1.8%
Other 5.7%
15%: 1.3%Duty free: 0.9%
10%: 0.2%
Other: 0.2% (including rates at 6.5%, 
25%, 35%, and 40%)30%: 0.2%20%: 1.0%WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 46 - 
 
  Goods imported for the official use of foreign diplomatic missions and consulates, the United Nations and its 
specialized branches  
Personal belongings required for the migration of the head of a foreign diplomatic mission, diplomatic staff, 
service and technical staff, and their family members to the country of residence  
Wheelchairs, loading/unloading facilities, platforms, lifts, or  self-driving vehicles for persons with disabilities  
Other goods specified in the law and international treaties  
Raw materials, materials, and reagents not required to produce new goods and products in the domestic and 
foreign markets through innovation projectsa 
International postal items addressed to an individual, with not more than two identical goods, of value not 
exceeding 10 times the minimum monthly wage  
Contractors and subcontractors may import special -purpose vehicles, machinery, equipment, ra w materials, 
materials, chemicals, and explosives for the entire period of exploration and for the first five years of operation 
for activities related to petroleum and non -traditional oil substances and spare parts  
Reports, samples, and materials, relate d to the petroleum sector  
Renewable energy research and production equipment, its accessories and spare partsa 
Sports equipment and tools a 
a The list of goods covered shall be approved by the Government. One hundred products are listed by 
HS code; these products are also exempt from VAT. Legalinfo, Appendix to Government Resolution 
of Government No. 198 on Approval of the List , 4 April 2016. Vi ewed at: 
https://www.legalinfo.mn/annex/details/7236?lawid=11839 . 
Source:  Legalinfo, Law on Customs Tariffs and Customs Taxes , 20 May 2008. Viewed at: 
https://www.legalinfo.mn/law/details/208 . 
Table 3.6 Customs tax exemptions enacted during 2013 -20 
Date  Products  Reference  
7 June 2013  Technological equipment, spare parts, and special 
construction materials imported under the project to 
extract petroleum products from oil, shale, and coal 
by industrial methods  https://www.legalinfo.mn/law/d
etails/9245?lawid=9245  
7 June 2013  Longitudinal thin -layer panels (Oriented Strand 
Board (OSB)) and prefabricated wooden buildings 
made in accordance with the standard (HS4410.12)  https://www.legalinfo.mn/law/d
etails/9248?lawid=9248  
16 January 2014  Up to 100,000 ton nes of food wheat and up to 
20,000 ton nes of food wheat seeds required for 
strategic seasonal food res erves and seed renewal  https://www.legalinfo.mn/law/d
etails/9691?lawid=9691  
24 January 2014  Equipment, spare parts, and tools required for 
construction work to expand the installed capac ity of 
the Thermal Power Plant (TPP) -4 SOE with a T -
120/130 -130-8MO turbine  https://www.legalinfo.mn/law/d
etails/9717?lawid=9717   
6 June 2014  Equipment and spare parts for the purpose of  
supporting SMEs, increasing employment, 
substituting imports, and producing export -oriented 
products  https://www.legalinfo.mn/law/d
etails/10426?lawid=10426  
9 May 2014  Equipment required for the construction of the 
Amgalan thermal power plant  https://www.legalinfo.mn/law/d
etails/10378?lawid=10378  
6 June 2014  Equipment and spare parts for SMEs  https://www.legalinfo.mn/law/d
etails/12493?lawid=12493  
21 May 2015  Equipment, spare parts, and materials imported 
under capacity -building projects  https://www.legalinfo.mn/law/d
etails/11086?lawid=11086  
2 July 2015  Genghis Khan statue  https://www.legalinfo.mn/law/d
etails/11194?lawid=11194  
25 December 2015  20,000 ton nes of wheat seeds for spring sowing 
2016 https://www.legalinfo.mn/law/d
etails/11520?lawid=11520  
4 February 2016  Electricity imported for the Western Region Energy 
System  https://www.legalinfo.mn/law/d
etails/11642?lawid=11642  
5 February 2016  Passenger cars, minibuses, special -purpose vehicles, 
and equipment imported for use in the services of 
the 11th Asia -Europe Meeting  https://www.legalinfo.mn/law/d
etails/11712?lawid=11712  
30 November 2017  Animal feed, hay, up to 225,000 ton nes of food 
wheat, and up to 10,000 to nnes of seed wheat 
required for preparation for winter and spring of 
2017-18 https://www.legalinfo.mn/law/d
etails/12972?lawid=12972  
22 December 2017  Electricity imported for the Western Region Energy 
System  https://www.legalinfo.mn/law/d
etails/13027?lawid=13027  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 47 - 
 
  Date  Products  Reference  
12 January 2018  Air purifiers and energy -efficient heaters  https://www.legalinfo.mn/law/d
etails/13116?lawid=13116  
10 May 2018  All types of fuel wood, except for imported logs, 
longit udinal thin -layer panels (OSB), and 
prefabricated wooden buildings  https://www.legalinfo.mn/law/d
etails/13374?lawid=13374  
28 November 2019  100% reduction in customs duties on imported 
goods required for the establishment of fixed assets 
for the construction of the oil refinery workers' camp 
in Sainshand soum, Dornogovi aimag  https://www.legalinfo.mn/law/d
etails/14794?lawid=14794  
9 April 2020  15,000 ton nes of elite wheat seeds required for 
spring sowing in 2020, 160,000 ton nes of food wheat 
required for domestic flour production, all types of 
food rice (rice, triangular rice, and millet); 
exemption from custo ms duties on imports of sugar 
and vegetable oil  https://www.legalinfo.mn/law/d
etails/15237?lawid=15237  
9 April 2020  Diagnostic kits, drugs, medical devices, equipment, 
disinfectants, a nd masks for use in the diagnosis and 
treatment of COVID -19 https://www.legalinfo.mn/law/d
etails/15242?lawid=152E2  
Source:  Legalinfo. As referenced in the table.  
3.37.   In response to the COVID -19 pandemic, Mongolia temporarily exempted a number of products 
from customs duties during the period 1 February 2020 to 1 October 2020. These are mainly 
diagnostic kits, drugs, medical devices, equipment, disinfectants, and masks (Table 3.7).26 
Table 3.7 Customs duty and VAT exemptions for the diagnosis and treatment of 
COVID -19 
Products  HS codes  
Diagnostic or laboratory kits  3822.00.00, 3002.15.00, 3821.00.00  
Medical drugs  3002.15.00, 3002.20.00, 3004.20.90, 3004.32.10,  
3004.90.10, 3004.90.90, 3004.60.90, 3004.10.90  
Medical equipment  2804.40.00, 3926.20.00, 4015.11.00, 4015.19.00, 4015.90.00,  
6210.10.00, 6210.50.00, 6307.90.00, 6505.00.90, 9004.90.00, 
3926.90.00  
Medical d evices  7311.00.00, 7411.10.00, 7412.10.00, 7613.00.00, 8413.19.00, 
8414.80.00, 8421.39.00, 8421.99.00, 8424.20.00, 8424.89.00, 
8481.10.00, 9018.19.00, 9018.39.00, 9018.90.00, 9019.20.00,  
9025.19.00, 9026.80.00, 9027.80.00  
Disinfectants and masks  2847.00.00, 3402.90.00, 3808.94.00  
Source:  Legalinfo, Law about Customs Tax Exemption , 9 April 2020. Viewed at: 
https://www.legalinfo.mn/law/details/15242?lawid=15242 . 
3.38.   Pursuant to the Law on Value Added Tax Exemption and the Law on Customs Duty Exemption, 
Mongolia exempts certain wood products from these duties. A government resolution from 2019 lists 
certain catego ries of products for exemption until 31 December 2022 (Table 3.8). Another significant 
area of tariff exemption during the review period was for SMEs in certain economic sectors 
(Table  3.9). In order to implement the provisions for promoting SME developmen t in the Action Plan 
of the Government  for 2016 -20 and the Industrialization 21:  100 Program, certain products were 
exempted from customs duties based on a study of the needs of industry and feedback received 
from entrepreneurs and other stakeholders. This  was a one -time exemption that applied only during 
2017-18, and has expired.  
Table 3.8 Exemptions from duties and VAT  
HS Description  
4401.11.00  Coniferous and elongated fuel wood (narrow tip diameter 6 cm <; length 2.20 m)  
4401.11.00  Coniferous, sawn fuel wood or in pieces (narrow tip diameter > 15 cm, length 0.25  m; 
0.30 m; 0.50  m; 0.75  m) 
4401.12.00  Deciduous and elongated fuel wood (narrow tip diameter 6  cm <; length 2.20  m) 
4401.12.00  Fuel wood of deciduous type, sliced and chopped (narrow tip diameter > than 15  cm, 
length 0.25  m; 0.30  m; 0.50  m; 0.75 m)  
4410.12.00  Longitudinally thin -walled plate (OSB)  
 
26 Legalinfo, Law about Customs Tax Exempt ion, 9 April 2020. Viewed at: 
https://www.legalinfo.mn/law/details/15242?lawid=15242 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 48 - 
 
  HS Description  
9406.10.30  Prefabricated wooden building made in accordance with the standard and ready for 
installation  
Source:  Legalinfo, Appendices 2 and 3 to Government Resolution No. 101 on Approval of the List , 21 March 
 2019. Viewed at: https://www.legalinfo.mn/law/details/14240 . 
Table 3.9 Duty exemptions for equipment and spare parts of certain SME sectors, 
2017 -18 
Sector  HS codes  
Sewing and knitting  8405.10.00, 8414.10.00, 8414.80.00, 8428.39.00, 8443.19.00, 8443.39.00, 
8447.11.00, 8447.12.00, 8447.20.10, 8447.20.20, 8447.90.90, 8451.10.00, 
8451.29.00, 8451.29.00, 8451.30.00, 8451.40.00, 8451.50.00, 8451.80.00, 
8451.80.00, 8451.80.00, 8451.90.00, 8452.21.00, 8452.29.00, 8543.70.00, 
9017.10.00, 9031.49.00  
Wool and cashmere  3923.40.00 , 4822.10.00, 8413.50.00, 8413.70.00, 8413.81.00, 8413.81.00, 
8414.80.00, 8415.10.00, 8419.89.00, 8421.19.00, 8421.29.00, 8421.39.00, 
8422.40.00, 8423.20.00, 8451.80.00, 8428.33.00, 8428.39.00, 8444.00.00, 
8445.11.00, 8445.12.00, 8445.13.00, 8445.19.00, 84 45.19.00, 8445.20.00, 
8445.30.00, 8445.40.00, 84.46, 8447.90.10, 8447.90.90, 84.48, 84.49, 8451.29.00, 
8451.29.00, 8451.30.00, 8451.40.00, 8451.50.00, 8451.80.00, 8451.80.00, 
8451.80.00, 8451.80.00, 8451.80.00, 8451.80.00, 8451.80.00, 8451.90.00, 
8452.21.0 0, 8452.29.00, 8460.39.00, 8479.89.00, 8481.80.00, 8523.49.00, 
9024.80.00, 9024.80.00, 9025.19.00, 9031.80.00, 9032.89.00  
Leather factories  8414.80.00, 8420.10.00, 8421.19.00, 8421.29.00, 8428.33.00, 8428.39.00, 
8443.19.00, 8451.10.00, 8451.80.00, 8452.21 .00, 8452.29.00, 8452.30.00, 
8453.10.00, 8453.20.00, 8453.80.00, 8453.80.00, 8453.80.00, 8453.90.00, 
8456.11.00, 8460.31.00, 8479.82.00, 9017.10.00, 9017.90.00, 9031.80.00, 
9032.10.00, 9032.89.00  
Wood processing 
plants  7311.00.00, 8414.80.00, 8417.80.00, 8419.32.00, 8428.33.00, 8428.39.00, 
8428.39.00, 8460.39.00, 8465.10.00, 8465.10.00, 8465.91.00, 8465.92.00, 
8465.93.00, 8465.94.00, 8465.94.00, 8465.94.00, 8465.95.00, 8465.96.00, 
8465.99.00, 8465.99.00, 8465.99.00, 8465.99.00, 8479.30.00, 8479 .82.00, 
8479.89.00  
Printing industry  84.40, 8441.10.00, 84.42, 8443.12.00, 8443.13.00, 8443.14.00, 8443.15.00, 
8443.16.00, 8443.91.00  
Paper factories  84.39, 84.41  
Packaging plants  8422.30.00, 8422.30.00, 8422.30.00, 8422.30.00, 8422.30.00, 8422.40.00, 
8422.40.00, 8422.40.00, 8422.40.00, 8423.30.00, 8441.10.00, 8441.20.00, 
8441.30.00, 8441.40.00, 8443.17.00, 8452.21.00, 8452.29.00, 8477.10.00, 
8477.20.00, 8477.20.00, 8477.30.00, 8477.40.00, 8477.80.00, 8477.80.00, 
8477.80.00, 9024.80.00, 9024 .80.00  
Manufacture of 
gold, silver, 
souvenirs  8414.30.00, 8424.30.00, 8454.30.00, 8455.22.00, 8455.30.00, 8456.11.00, 
8460.39.00, 8460.90.00, 8460.90.00, 8461.90.00, 8462.10.00, 8462.99.00, 
8479.89.00, 8515.80.00, 8543.30.00, 8543.30.00  
Dairy industry  8405.10.00, 8413.60.00, 8413.70.00, 8414.30.00, 8414.80.00, 8419.39.00, 
8419.39.00, 8419.50.00, 8419.89.00, 8419.89.00, 8421.11.00, 8421.21.00, 
8421.29.00, 8422.19.00, 8428.33.00, 8428.39.00, 8434.10.00, 8434.20.00, 
8438.80.10, 8479.89.00, 9027.80.00  
Fruit processing 
plants  8405.10.00, 8414.30.00, 8414.80.00, 8418.69.00, 8419.89.00, 8421.19.00, 
8421.21.00, 8421.22.00, 8422.19.00, 8423.89.00, 8433.60.00, 8435.10.00, 
8436.80.00, 8438.60.00, 8479.20.00, 8479.82.00, 8479.89.00, 9027.50.00  
Beverage industry  8405.10.00, 8413.81.00, 8414.80.00, 8419.89.00, 8421.21.00, 8421.22.00, 
8421.29.00, 8422.19.00, 8428.33.00, 8428.39.00, 9027.50.00, 9027.80.00, 
9031.80.00  
Salt factories  8413.81.00, 8419.39.00, 8428.33.00, 8428.39.00, 8436.80.00, 8474.10.00, 
8474.20.00, 8479.82.00, 8479.89.00, 9027.80.00, 8505.90.00, 8428.32.00  
Meat factories  7304.59.00, 7311.00.00, 7311.00.00, 7324.10.00, 76.12, 8208.30.00, 8404.10.00, 
8405.10.00, 8413.30.00, 8413.50.00, 8413.50.00, 8413.60.00, 8413.70.00, 
8413.81.00, 8414.10.00 , 8414.30.00, 8414.80.00, 8414.80.00, 8417.80.00, 
8418.99.10, 8418.99.10, 8419.39.00, 8419.39.00, 8418.50.90, 8419.50.00, 
8419.81.00, 8419.89.00, 8419.89.00, 8421.19.00, 8421.29.00, 8421.29.00, 
8422.19.00, 8422.19.00, 8422.30.00, 8423.82.00, 8424.89.00, 84 25.11.00, 
8428.10.00, 8428.33.00, 8428.39.00, 8428.90.00, 8431.39.00, 8436.10.00, 
8438.50.00, 8438.50.00, 8438.50.00, 8438.50.00, 8438.50.00, 8438.50.00, 
8438.50.00, 8438.50.00, 8438.50.00, 8438.50.00, 8438.50.00, 8438.50.00, 
8438.50.00, 8438.50.00, 8438.5 0.00, 8438.50.00, 8438.50.00, 8438.50.00, 
8438.90.00, 8438.80.90, 8453.10.00, 8460.39.00, 8467.19.00, 8467.22.00, 
8467.29.00, 8467.89.00, 8479.82.00, 8479.82.00, 8479.82.00, 8479.82.00, 
8479.89.00, 8479.89.00, 8479.89.00, 84.81, 8716.80.00, 9018.32.00, 902 2.19.00, WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 49 - 
 
  Sector  HS codes  
9025.19.00, 9025.80.00, 9026.10.00, 9026.20.00, 9027.20.00, 9027.80.00, 
9032.10.00  
Sausage and 
conserves factories  8414.30.00, 8414.80.00, 8418.99.10, 8419.39.00, 8418.50.90, 8419.81.00, 
8419.89.00, 8419.89.00, 8419.89.00, 8419.90.00, 8422.30.00,  8422.30.00, 
8423.82.00, 8438.50.00, 8438.50.00, 8438.50.00, 8438.50.00, 8438.50.00, 
8438.90.00, 8460.39.00, 8543.70.00, 9025.19.00, 9025.80.00, 9026.20.00, 
9027.20.00, 9027.80.00, 9027.80.00  
Canning factories  8414.59.00, 8414.80.00, 8428.39.00, 8428.90.0 0, 8443.13.00, 8462.29.00, 
8462.29.00, 8462.39.00, 8462.99.00, 8462.99.00, 8479.89.00, 8515.39.00, 
9031.80.00  
Ketchup, 
mayonnaise, and 
vegetable oil 
factories  7311.00.00, 8405.10.00, 8414.10.00, 8414.80.00, 8414.80.00, 8419.39.00, 
8419.50.00, 8419.81.00, 8419.89.00, 8421.29.00, 8421.39.00, 8428.33.00, 
8433.59.00, 8433.60.00, 8438.60.00, 8479.82.00, 9027.80.00  
Vegetable canning 
factories  8405.10.00, 8414.80.00, 8419.50.00, 8419.81.00, 8419.89.00, 8419.89.00, 
8422.19.00, 8423.81.00, 8428.33.00, 8428.39.00, 8433.60.00, 8438.60.00, 
8479.82.00, 8479.82.00, 9027.80.00  
Bakeries  8405.10.00, 8414.80.00, 8414.80.00, 8417.20.00, 8419.39.00, 8419.81.00, 
8419.89.00, 8420.10.00, 8428.33.00, 8428.39.00, 8437.80.10, 8437.80.20, 
8438.10.00, 8438.10.00, 8438.10.00, 8438.10.00, 8438.10.00, 8438.10.00, 
8438.10.00, 8438.20.00, 8479.82.00, 8479.82.00, 8479.89.00, 8479.89.00, 
8514.30.00, 9027.50.00, 9027.80.00, 9027.80.00, 9027.80.00, 9032.20.00  
Poultry farming  8436.29.00, 8436.21.00, 8436.91.00, 8436.29.00, 8428.39.00, 8433.60.00, 
8433.60.00, 8421.19.00, 8419.89.00, 8419.89.00, 8422.30.00, 8422.30.00, 
9027.80.00, 8441.40.00, 8477.10.00, 8477.40.00, 8436.10.00, 8436.10.00, 
8479.89.00, 8422.30.00, 8419.89.00, 8479.82.00, 8419.31.00, 8422.30.00  
Beekeeping  3926. 90.00, 4421.90.00, 7326.90.00, 8205.59.00, 8211.93.00, 8419.89.00, 
8421.19.00, 8424.89.00, 8436.80.00, 8436.80.00, 8436.80.00, 8436.80.00, 
8436.99.00, 8467.89.00, 9018.90.00, 9603.90.00  
Metallurgical and 
metal processing 
industry  84.54, 84.55, 84.57, 84.5 8, 84.59, 84.61, 84.62, 84.63, 8514.20.00, 8514.40.00, 
9024.10.00, 9027.30.00  
Pharmaceutical  6903.10.00, 70.17, 7311.00.00, 8405.10.00, 8414.10.00, 8414.10.00, 8414.80.00, 
8414.80.00, 8414.80.00, 8414.80.00, 8415.83.00, 8415.90.00, 8418.10.00, 
8419.20.00,  8419.39.00, 8419.39.00, 8419.40.00, 8419.89.00, 8419.89.00, 
8419.89.00, 8419.89.00, 8419.89.00, 8419.89.00, 8421.19.00, 8421.21.00, 
8421.21.00, 8421.29.00, 8421.29.00, 8421.39.00, 8422.19.00, 8422.20.00, 
8422.30.00, 8422.40.00, 8423.81.00, 8423.82.00, 842 4.89.00, 8424.89.00, 
8428.33.00, 8428.39.00, 8428.39.00, 8432.80.00, 8443.19.00, 8443.39.00, 
8456.11.00, 8460.31.00, 8461.50.00, 8477.10.00, 8477.80.00, 8477.80.00, 
8479.82.00, 8479.82.00, 8479.82.00, 8479.82.00, 8479.89.00, 8479.89.00, 
8479.89.00, 8479.89 .00, 8479.89.00, 8479.89.00, 8514.30.00, 8537.10.00, 
9011.80.00, 90.16, 9025.80.00, 9027.20.00,9027.30.00, 9027.50.00, 9027.50.00, 
9027.80.00, 9027.80.00, 9027.80.00, 9027.80.00, 9027.80.00, 9027.80.00, 
9027.80.00, 9031.49.00, 9031.80.00, 9031.80.00, 9031. 80.00, 9031.80.00, 
9031.80.00, 9032.10.00  
Biochemical  4016.95.00, 7019.90.00, 7311.00.00, 8413.70.00, 8413.81.00, 8414.80.00, 
8419.39.00, 8419.89.00, 8421.29.00, 8421.39.00, 8428.33.00, 8479.82.00, 
9025.11.00, 9025.19.00, 9026.20.00, 9032.81.00  
Rubber factories  8420.10.00, 8428.33.00, 8465.96.00, 8465.99.00, 8465.99.00, 8465.99.00, 
8477.20.00, 8477.80.00, 8477.80.00, 9024.80.00  
Information 
technology 
equipment and 
spare parts  8465.93.00, 8465.95.00, 8486.20.00, 8501.10.00, 8501.20.00, 8501.31.00 , 
8501.51.00, 8501.64.00, 8504.31.00, 8504.40.00, 85.32, 85.33, 8534.00.00, 
8536.41.00, 8536.49.00, 85.41, 85.42, 8543.20.00, 8471.50.00, 8471.70.00, 
8473.30.00, 9030.20.00, 9030.40.00, 9030.82.00  
Sawdust briquette 
plants  8405.10.00, 8413.70.00, 8414.10.0 0, 8414.59.00, 8414.80.00, 8419.39.00, 
8421.39.00, 8422.30.00, 8428.33.00, 8428.39.00, 8474.20.00, 8474.39.00, 
8474.80.00, 8479.89.00, 8479.89.00, 8481.80.00, 9032.89.00  
Energy -saving and 
heat-production  3917.21.00, 7310.29.00, 7322.19.00, 8418.61.00, 841 9.89.00, 8421.39.00, 
8481.40.00, 8515.19.00, 8516.29.00, 8540.89.00, 9032.10.00, 9032.89.00, 90.30  
Sewage treatment  8421.21.00  
Water -efficiency  3917.39.00  
Source:  Legalinfo, Government Resolution No. 168 about Approval of the List , 14 June 2017. Viewed at: 
https://www.legalinfo.mn/law/details/12741 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 50 - 
 
  3.1.3.3   Preferential tariffs  
3.39.   Mongolia has preferential tariffs in place pursuant to its two preferential regimes, the 
Mongolia -Japan E PA and the APTA (Section 2.3.2). The EPA with Japan is starting to be implemented, 
and only one tariff cut was effectuated after the Agreement's entry into force. Another six reductions 
are expected, with final implementation in 2036. However , almost 60% o f tariff lines are duty -free 
as at 2020. The Agreement excludes about 17% of tariff lines from reduction commitments, the 
majority of which are agricultural products27; thus, these will remain dutiable after 2036.28 As at the 
end of 2020, the EPA had an av erage tariff rate of 1.7%, compared with a simple average MFN rate 
of 5.3% (Table 3.10).  
3.40.   Preferential tariffs under the APTA for 2021 are minimal, and do not decrease the overall tariff 
average (Table 3.10). Preferential rates are with respect to only 385 tariff lines29, 6.4% of all lines, 
with no lines reduced to zero. The reduced tariffs are concentrated in the textiles and clothing, 
fishing, and machinery and equipment sectors. Of the products covered, tariffs are reduced from the 
5% MFN rate to between 3.5% and 4.5%.  
Table 3.10 Summary analysis of preferential tariffs, 2020 -21 
 
Total  WTO agriculture  WTO non -
agriculture  
Average 
(%) Range 
(%) Coveragea 
(%) Duty -
free 
ratesb 
(%) Average 
(%) Duty -
free 
ratesb 
(%) Average 
(%) Duty- 
free 
ratesb 
(%) 
MFN 5.3 0-40  
0.9 7.0 0.8 5.1 0.9 
Mongolia -Japan 
EPA (until 
31 March 2020)  1.8 0-40 79.9 58.5 4.2 41.4 1.4 61.5 
Mongolia -Japan 
EPA (since 
1 April 2020)  1.7 0-40 79.9 58.5 4.1 41.4 1.2 61.5 
APTAc 5.3 0-40 6.4 0.9 6.9 0.8 5.0 0.9 
a Percentage of total number of lines. Only rates that are lower than the corresponding MFN rate are 
taken into account.  
b Duty-free lines as a percentage of total tariff lines.  
c From 1 January 2021.  
Note:  The Mongolia -Japan EPA is provided in the HS12 nomenclature. Concordance to the HS17 
nomenclature is done to the best possible extent.  
Source:  WTO Secretariat calculations, based on data provided by the authorities to IDB.  
3.1.4   Other charges affecting imports  
3.41.   The main charges on imports at the border are excise taxes and the VAT. Both remain largely 
unchanged in structure since the last Review, although there have been significant changes in the 
rates for most excise taxes, and the VAT was overhauled as part of  an overall government effort on 
tax reform in recent years.30 Mongolia also has a stamp duty that has been in place for many years. 
This applies to 45 categories of goods or services, in particular to documents, e.g. notarial services 
and legal disputes. It also applies to the registration of many IP entities, such as patents, 
trademarks, and copyrights. The amount of the duty varies depending on the product or service.  
3.1.4.1   VAT 
3.42.   The VAT rate remains unchanged, at 10% on most goods and services. It is also appli ed on 
imports but is zero -rated on exports. The law specifies that the Government shall determine the VAT 
 
27 In particular, meat, dairy, grains, certain fruits and vegetables, and wool.  
28 WTO document WT/R EG373/1/Rev.1, 26 June 2018.  
29 Or 366 HS 6 -digit tariff lines.  
30 Parliament has changed the General Law on Taxation, the Corporate Income Tax Law, the VAT Law, 
and the Personal Income Tax Law as a result of an overall tax reform process. Ernst & Young, Mongolia 
Reforms Its Key Tax Legislation , 7 June 2019. Viewed at: https://taxnews.ey.com/news/2019 -1057-mongolia -
reforms -its-key-tax-legislation . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 51 - 
 
  rate on imported gasoline and diesel fuel, within the range of zero to 10%. Certain other goods and 
services are exempt from VAT, e.g. passenger airplanes and their parts; certain domestically 
produced fruit, vegetables, meat, and dairy; stock and securities transactions; banking and 
insurance services; small and medium -sized factory equipment, machinery, and their spare parts 
manufactured in Mongolia; equipment to be used for renewable energy surveying; certain imported 
logs, lumber, and wood products; health services; and gold.31 To determine the taxable value for 
VAT on imports, the value of customs duties, excise taxes, and other taxes is added to th e customs 
value.  
3.43.   In 2015, Mongolia enacted the Value -Added Tax Act, 2015, which came into force on 
1 January 2016.32 It replaces the previous act from 2006. The main changes were to allow for the 
recovery of input VAT on capital goods, and to include a new  exemption for interest -bearing loans.33 
Since its introduction, it has been amended six times. The main changes were to: (i) exempt from 
VAT notary services, renewable energy equipment, veterinary services, and profits arising from 
investments in the Next  Generation Fund by the central treasury; and (ii) remove the incentives for 
taxpayers of imported goods, works, or services, so the incentives would apply only to domestic 
goods, works, or services.34 
3.44.   Article  13 of the Value -Added Tax Act, 2015, exempts c ertain goods and services from VAT.35 
This list of general exemptions includes 28 categories of goods such as equipment for the armed 
forces, goods for personal use when travelling, and special equipment for persons with disabilities. 
Most exemptions do no t discriminate between domestic and imported/exported goods ; however , the 
exemption for milk and dairy products applies only to domestically processed and domestically sold 
products, and processed meat is exempt if it is sold domestically. Furthermore, the  Law on Value 
Added Tax Exemption exempts certain products from VAT for certain periods of time. Based on this 
Law, the Government periodically adopts laws or resolutions that contain lists of exemptions from 
VAT. There are many such laws and resolutions; thus, many products are exempt from VAT at any 
given time (Table 3.11). A 2019 government resolution provides VAT exemption for certain forestry, 
logging, and gardening activities until 31 December 2022. More specifically, the exemption applies 
to tree pla nting and forestry, logging, non -timber forest resources, forestry support activities, land 
protection and garden maintenance services, and planting of trees and shrubs.36 The same resolution 
also exempts six categories of imported wood products from custo ms duty and VAT (Section 3.1.3.2 
and Table 3.8). Tractors, fertilizers, and other agricultural inputs are exempt from VAT according to 
the Law on Value Added Tax Exemption of 5 February 2016. The exemptions are valid until 
31 December 2020. The Government approves the list of goods to be exempted from the VAT by HS 
code.37 
Table 3.11 VAT exemptions, 2020  
Products  Date  Reference  
Electricity imported by the Western 
Region Energy System from China or the 
Russian Federation  1 January 2015  https://www.legalinfo.mn/law/details/116
43?lawid=11643   
Passenger cars, minibuses, special -
purpose vehicles, and equipment 
imported for use in the ser vices of the 
11th Asia -Europe Meeting  5 February 2016  https://www.legalinfo.mn/law/details/117
13?lawid=11713   
 
31 For the full list of exemptions, see Chapter 6 of the Value Added Tax Law. Legalinfo, Law about Value 
Added Tax , 9 July 2015. Viewed at: https://www.legalinfo.mn/law/details/11227?lawid=11227 . 
32 Legalinfo, Law about Value Added Tax , 9 July 2015. Viewed at: 
https://www.legalinfo.mn/law/de tails/11227?lawid=11227 . 
33 Ernst & Young, Mongolia Reforms Its Key Tax Legislation , 7 June 2019. Viewed at: 
https://taxnews.ey.com/news/2019 -1057-mongolia -reform s-its-key-tax-legislation . 
34 Legalinfo, Amendment to the Law on VAT . Viewed at: 
https://www.legalinfo.mn/additional/?lawid=11227 . 
35 Article  13 lists 28 categories of goods and 19 categories o f services subject to exemption. In most 
cases, the exemption applies to all products (domestic, exported, and imported), but, in a few cases, it applies 
only to domestic goods, e.g. milk and dairy, meat; or exported goods, e.g. cashmere.  
36 Legalinfo, Appendix 1 to Government Resolution No. 101 on Approval of the List , 21 March 2019. 
Viewed at: https://www.legalinfo.mn/law/details/14240 . 
37 Legalinfo, Law on VAT Exemption , 5 February 2016. Viewed at: 
https://www.legalinfo.mn/law/details/11644?lawid=11644 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 52 - 
 
  Products  Date  Reference  
Imports of animal feed, hay, up to 
225,000 ton nes of food wheat, and up to  
10,000 ton nes of seed wheat  4 December 2017 - 
30 June 2018  https://www.legalinfo.mn/law/details/129
73?lawid=12973  
Electricity imported by the Western 
Region Energy System from China or  the 
Russian Federation  1 January 2018 - 
1 January 2021  https://www.legalinfo.mn/law/details/130
28?lawid=13028   
Imported air purifiers and 
energy -efficient heating equipment  20 January 2018  https://www.legalinfo.mn/law/details/131
15?lawid=13115   
Forestry, horticulture, forestry activities, 
and all types of fuel wood  1 January 2019  https://www.legalinfo.mn/law/details/133
75?lawid=13375   
Imported goods required for the 
construction of the oil refinery workers' 
camp in Sainshand soum  1 January 2020 - 
31 December 2022  https://www.legalinfo.mn/law/details/147
96?lawid=14796   
Import of 20,000 ton nes of wheat seeds  1 January -1 June 2016  https://www.legalinfo.mn/law/details/115
19?lawid=11519  
Imported and domestically sold new 
agricultural tractors, combines, 
machinery, flour and composting plant 
equipment, irrigation equ ipment, 
forestry machinery, equipment, 
fertilizers, and pesticides  1 January 2016  https://www.legalinfo.mn/law/details/116
44?lawid=11644  
Import of equipment required for the 
production  of innovative products, and 
the sales of domestically produced 
innovative products and services  22 May 2012  https://www.legalinfo.mn/law/details/103
63?lawid=10363  
Import of equipment,  spare parts, and 
tools required for construction work to 
expand the installed capacity of TPP -4 
SOE 24 January -
1 December 2014  https://www.legalinfo.mn/law/details/971
8?lawid=9718  
Import of equipment required for the 
construction of the Amgalan thermal 
power plant  9 May -31 December 
2014 https://www.legalinfo.mn/law/details/103
79?lawid=10379  
Briquettes produced b y Tavan Tolgoi 
Fuel LLC  7 May 2020  https://www.legalinfo.mn/law/details/153
65?lawid=15365  
Imported infrastructure of the leather, 
wool, and cashmere processing complex 
to be built in D arkhan -Uul aimag  28 August 2020 - 
1 January 2024  https://www.legalinfo.mn/law/details/155
76?lawid=15576  
Source:  Legalinfo, Law about the Value Added Tax , Revised , 9 July 2015. Viewed at : 
https://www.legalinfo.mn/law/details/11227?lawid=11227&sword=%D0%BD%D0%BE%D0%BE%D
0%BB%D1%83%D1%83%D1%80 ; and Legalinfo, Law on VAT Exe mption , 5 February 2016. Viewed 
at: https://www.legalinfo.mn/law/details/11644?lawid=11644 . 
3.1.4.2   Excise  
3.45.   Mongolia's excise duties have not undergone significant change since the last Review, 
although there were some modifications. Excise duties continue to be applied on alcoholic beverages, 
tobacco, gasoline, diesel fuel, passenger vehicles, and various types of gaming and gambling 
products and activities (Table 3.12). They apply to goods and services produced/supplied in Mongolia 
and to imports38, but exports of goods and services are exempt. Other exemptions include vodka 
distilled from milk and dairy products for home use, snuff tobacco, and alcohol and tobacco allowed 
by Mongolian Customs f or duty -free entry for personal use of passengers. Mongolian Customs 
collects the duties for imported goods and transfers the revenues to the treasury account39; most 
domestic excise duties are paid by the taxpayer on a monthly basis, except for on distilled spirits, 
which must be paid within two working days.  
3.46.   The rates of excise have undergone significant change since the last Review. Most notably, 
the rates on most products have increased substantially, and while some rates were harmonized 
between imported and domestic goods, differing rates remain on a number  of products, e.g. 
gasoline, diesel fuel, and passenger vehicles. According to the authorities, the increase in rates was 
a result of suggestions from the International Monetary Fund in order to increase tax revenues. 
Furthermore, some rates also vary depe nding on the port of entry. All excise duties are specific 
 
38 No excise duties are applied on domestically produced passenger vehicles.  
39 An exemption exists for the stockpiling of imported fuels, in that the tax is to be paid on the date of 
sale. WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 53 - 
 
  duties, i.e. applied according to the quantity of the goods. According to the authorities, excise taxes 
accounted for 13.3% of the total tax revenue of the state budget in 2019.  
3.47.   Excise duties and t heir rates are specified in the Law on Excise Taxes, 2006, as amended.40 
An amendment in June 2017 removed the previous excise tax exemption for liquified gas -, electric -, 
and dual -powered vehicles, so that they are now subject to the tax, but the rate is determined by 
the Government at between zero and 50% of the specified rate. It is currently at 50%. The 2015, 
2016, and April 2017 amendments changed the rates of excise duties for these and subsequent 
years, i.e. 2018, 2019, 2020, and thereafter, increasi ng the rates gradually and significantly.41 
Table 3.12 Excise taxes, 2020  
Goods subject to excise tax  Domestic goods  Imported goods  
Rate (MNT)  Rate (MNT)  
Alcohol for consumption:    
Sold to distillery producers  1,740/litre  1,740/litre  
Sold to pharmaceutical producers, for human and 
veterinary needs  1,450/litre  1,450/litre  
Sold to others  17,400/litre  17,400/litre  
All types of vodka, liqueurs, cordials, and other alcoholic 
beverages:    
up to 25°  3,480/litre  3,480/litre  
25°-40° 6,960/litre  6,960/litre  
40° and above  15,660/litre  15,660/litre  
All types of cognac, whisky, rum, and gin:    
up to 25°  8,700/litre  8,700/litre  
25°-40° 17,400/litre  17,400/litre  
40° and above  20,880/litre  20,880/litre  
Mongolian milk alcohol distilled using a production method  350/litre  350/litre  
Wine:    
up to 35°  870/litre  870/litre  
35° and above  7,830/litre  7,830/litre  
Beer 3,500/litre  3,500/litre  
Cigarettes and other similar tobacco  4,180/100 pieces  4,180/100 pieces  
Pipe tobacco and other similar bulk tobacco  3,130/kg  3,130/kg  
Gasoline:    
Octane rating up to 90  0-15,950/tonne  0-215,000/tonnea 
0-223,000/tonneb 
0-750,000/tonnec 
Octane rating over 90  0-17,400/tonne  0-217,000/tonnea 
0-229,000/tonneb 
0-750,000/tonnec 
Diesel fuel  0-21,750/tonne  0-221,000/tonnea 
0-226,000/tonneb 
0-850,000/tonnec 
Passenger vehicles running on gasoline and diesel fuel 
(volume of engine cylinder (cm3))/passenger hybrid 
vehicles and vehicles running on LPG (volume of engine 
cylinder (cm3)):   
1,500 and below:    
0-3 years  - 750,000/375,000  
4-6 years  - 1,600,000/800,000  
7-9 years  - 3,350,000/1,675,000  
10 years and over  - 10,000,000/5,000,000  
1,501 -2,500:    
0-3 years  - 2,300,000/1,150,000  
6 years  - 3,200,000/1,600,000  
7-9 years  - 5,000,000/2,500,000  
10 years and over  - 11,700,000/5,850,000  
2,501 -3,500:    
0-3 years  - 3,050,000/1,525,000  
 
40 Legalinfo, Law about Special Taxes , 29 June 2006. Viewed at: 
https://www.legalinfo.mn/law/details/434 .  
41 Legalinfo, Amendments to the Law of Mongolia about Special Taxes . Viewed at: 
https://www.legalinfo.mn/additional/details/2081?lawid=434 ; 
https://www.legalinfo.mn/additional/details/2519?lawid=434 ; and 
https://www.legalinfo.mn/additional/details/ 3080?lawid=434 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 54 - 
 
  Goods subject to excise tax  Domestic goods  Imported goods  
Rate (MNT)  Rate (MNT)  
6 years  - 4,000,000/2,000,000  
7-9 years  - 6,700,000/3,350,000  
10 years and over  - 13,350,000/6,675,000  
3,501 -4,500:    
0-3 years  - 6,850,000/3,425,000  
6 years  - 8,000,000/4,000,000  
7-9 years  - 10,850,000/5,425,000  
10 years and over  - 17,500,000/8,750,000  
4,501 and over:    
0-3 years  - 14,210,000/7,105,000  
6 years  - 27,200,000/13,600,000  
7-9 years  - 39,150,000/19,525,000  
10 years and over  - 65,975,000/32,987,500  
Gaming table or roulette tables  116,000/physical 
unit/month  116,000/physical 
unit/month  
Slot machines  4,350,000/physical 
unit/month  4,350,000/physical 
unit/month  
Cashiers or totalizers that provide results of gambling  116,000/physical 
unit/month  116,000/physical 
unit/month  
Bookmaker centres for estimating the bets  116,000/physical 
unit/month  116,000/physical 
unit/month  
Activities of individuals and legal entities that conduct 
quizzes and gambling activities using an electronic 
network, Internet, or cellular telephone network  36,250,000/month  - 
a Imported at Tsagaannuur, Yarant, Borshoo, Artssuuri, Tes, Burgastai, and Gashuun Sukhait.  
b  Imported at Khankh and Ulikhan Maikhan.  
c Imported at Sukhbaatar, Zamyn -Ud, Ereentsav, and Altanbulag.  
- None.  
Source:  Law on Excise Taxes.  
3.1.5   Import prohibitions, restrictions, and licensing  
3.48.   Article  8 of the Customs Law provides the rules for goods subject to import prohibition or 
restriction. It gives the Parliament  and the Government the right to impose prohibitions and non -
tariff restrictions on goods, except for those already stated in other laws . Goods prohibited from 
importation are not allowed in the customs territory. If they are brought in, they must be removed 
immediately or, if that is not possible, stored in a customs zone or temporary warehouse for up to 
three days, after which time Mongo lian Customs shall take measures for their destruction. Prohibited 
goods are also prohibited to transit, unless specifically allowed under international treaties. Lastly, 
the Customs Law prescribes that Mongolian Customs is responsible for notifying the pu blic about 
goods subject to prohibition or restriction.  
3.49.   Similar to other countries, many import (and also export) prohibitions and restrictions 
emanate from international treaties to which Mongolia is a party, such as the Basel Convention on 
the Control of  Transboundary Movements of Hazardous Waste, the Hague Convention for the 
Protection of Cultural Property, the Convention on International Trade in Endangered Species 
(CITES), the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Haz ardous 
Chemicals and Pesticides in International Trade, the Protocol to Eliminate Illicit Trade in Tobacco 
Products, the Montreal Protocol on Substances that Deplete the Ozone Layer, the Single Convention 
on Narcotic Drugs, the Convention on Psychotropic S ubstances, the United Nations Convention 
against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, the Stockholm Convention on 
Persistent Organic Pollutants, and the Minamata Convention on Mercury.42 Additionally, a number of 
 
42 Legalinfo, Mongolia's international treaties. Viewed at: https://www.legalinfo.mn/law/details/10698? 
lawid=10698 ; https://www.legalinfo.mn/law/details/10706?lawid=10706 ; https://www.legalinfo.mn/law/ 
details/10053?lawid=10053 ; https://www.legalinfo.mn/law/details/10701?lawid=10701 ; 
https://www.legalinfo.mn/law/details/10080?lawid=10080 ; 
https://www.legalinfo.mn/law/details/10705?lawid=10705 ; 
https://www.legalinfo.mn/law/details/9975?lawid=9975 ; 
https://www.legalinfo.mn/law/details/10390?lawid=10390 ; and 
https://www.legalinfo.mn/law/details/10149?lawid=10149 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 55 - 
 
  domestic provisio ns are also in place, such as the requirement for an import licence for jet fuel.43 
The complete lists of prohibited goods and those subject to restriction are outlined in Tables 3.13 
and 3.15.  
3.50.   Since the last Review, more products have been added to the li sts of prohibited and restricted 
goods. The main change to the import licensing regime was the addition of firearms and ammunition 
in 2015.   
3.51.   In August of 2015, Parliament approved amendments to the Law on Firearms.44 The main 
objective of its Article  16 is to regulate the issuance of import licences and public sale permits of 
firearms and ammunitions. As a result, the following changes were made to the import licensing 
procedure:  
• the special permit for importing and m anufacturing ammunitions shall be given to a person 
not holding a permit for the import or sale of firearms through a competitive selection 
process;  
• such selection shall be conducted by a commission that consists of representatives of central 
administrativ e bodies in charge of justice, sports, nature and the environment, intelligence, 
police organizations, and Mongolian Customs;  
• a legal person, an individual holding a permit to conduct sports training, shall have 
permission for the import and sale of ammuni tions within their premises; and  
• annual import quantities of firearms, types of ammunition, and their designated usage shall 
be constituted by the government department in charge of justice based on the commission 
proposals.  
3.52.   As such, a government resolutio n of 11 January 2016 amended the List of Coded Products 
Subject to Import Licensing, by including a section on "guns, weapons, tactical devices, techniques 
and its spare parts and accessories".45 
3.53.   Mongolia had a regulation on the Temporary Procedures for Is suing Permits for the Export 
and Import of Strategic Food items since 2013 pursuant to the Articles 3 and 6 of the Food Law.46 
This Resolution implemented the procedures for issuing import and export licen ces for a specific list 
of strategic food items tha t is otherwise controlled or restricted by annual quota. As at 2020, the list 
included 33 tariff lines, mostly meat products (Table 3.14). MOFALI determines the type and quantity 
of these foods that can be imported and exported in a given year through an O rder.47 For example, 
the latest Order (A -519) for 2020 allowed the importation of 500 ton nes of beef, 4,000 ton nes of 
dry milk powder, 15,000 ton nes of wheat seed, and 60,000 ton nes of durum wheat.48 Quota levels 
and licen ces for the year are announced on the MOFALI website , after which legal entities registered 
in Mongolia may submit a tender. A working group of the MOFALI is responsible for selecting the 
candidates and issuing the licen ces, which are not transferable. Afte r receiving the approval 
(licen ce), importers and exporters have six months to import/export the product. In August 2019, 
the 2013 resolution was updated and replaced by a new resolution on the Procedure for Issuing 
 
43 Mongolia Chamber of Commerce, Import certificate . Viewe d at: 
https://www.mongolchamber.mn/p/23 . 
44 Legalinfo, Law on Firearms, Revised , 7 August 2015. Viewed at: 
https://www.legalinfo.mn/law/details/11270?lawid=11270 . 
45 Legalinfo, Government Resolution No. 32 on Amendments to the List of Coded Products Subject to 
Import Licensing , 11 January 2016.  Viewed at: https://www.legalinfo.mn/law/details/11571?lawid=11571 . 
46 Legalinfo, Government Resolution No. 77 on  the Temporary Procedure for Issuing Permits for the 
Exportation and Impo rtation of Strategic Food , 2 March 2013. Viewed at: 
https://www.legalinfo.mn/law/details/9090 .  
47 See Order No. A -131 for 2013, A -08 and A -72 for 2014, A -23 for 2017, A -163 for 2018, A -20 for 
2019, and A -519 for 2020.  
48 Legalinfo, Order of the Ministry of Food, Agriculture, and Light Industry No. A -519 on  Mongolia's 
Export and Import Strategy for 2020 to Determine the Name, Type and Quantity of Food , 31 December 2019. 
Viewed at: https://www.legalinfo.mn/law/details/14933 . The same order, in Appendix 1, lists the products and 
quota levels for exports. For 2020, specific export quotas were issued for beef (8,300 tonnes), horse meat 
(27,900 tonne s), and heat -treated meat products (26,600 tonnes).  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 56 - 
 
  Permits for Export and Import of Strateg ic Food.49 The main elements of the earlier resolution remain 
intact , but the new one allows for the use of a one -stop shop or single window application for the 
licensing process.  
Table 3.13 List of prohibited  goods, 2020  
Good  Legal reference  
Prohibited and unlicensed ozone -depleting 
substances  Government Resolution No. 95 of 2007 on the Law 
on Air  
Unauthorized drugs and psychotropic substances 
and their raw materialsa Articles 13.1.5, 13.1.7, and 13.1.8 of the Law on 
Controlling the Circulation of Narcotic Drugs and 
Psychotropic Substances  
Seedlings of trees and shrubs, except for 
experimental and research work  Article  29.1.11 of the Forest Law  
All types of tobacco advertising materialsa Article  8.2 of the Law on Tobacco Control  
Alcohol advertising materialsa Article  9.3 of the Law on Combating Alcoholism  
Toxic and hazardous chemicals prohibited or 
unlicensed in Mongolia  Government Resolution No. 95 of 2007 on Articles 
5.1, 6.4, and 15.4 of the Law on Toxic and 
Hazardous Chemicals  
Hazardous waste for use, storage, temporary 
disposal, and disposal  Article  17.1 of the Law on Waste  
Nuclear material for weaponsa Article  33.2 of the Law on Nuclear Energy  
Prohibited and unlicensed nuclear materials, 
radiation generators, radiation -generating tools, 
equipment and technology prohibited by Mongolian 
lawa Articles 37.2.1, 41.1, and 41.2 of the Law on 
Nuclear Energy  
Counterfeit medicine  Article  11.1.7 of the Law on Medicines and Medical 
Devices  
Unauthorized drugs, medical devices and biologically 
active products  Article  15.9.3 of the Law on Medicines and Medical 
Devices  
Blood, blood products, tissues and organs for profit  Article  13.1 of the Law on Donors  
Pornography, books, movies, videos, p ictures, etc.  Article  5.3 of the Law on Combating Pornography  
Ethyl alcohol, other than for research purposes  Parliament Resolution No. 05 of 1998; Government 
Resolution No. 378 of 2014  
Waste ferrous and non -ferrous metals (cast iron, 
steel, copper, brass, aluminium and their alloys), 
cast and other primary ferrous and non -ferrous 
metals, spare parts and products made of ferrous 
and non -ferrous metals not used for their intended 
purpose, except for beer cans  Parliament Resolution No. 05 of 199 8 
The animals and plants listed in Annex 1 to the 
CITES, for purposes other than research  CITES  
Unauthorized plants, perennial roots, rhizomes, and 
tubers of plants  Articles 17.1 and 17.3 of the Law on Natural Plants  
Very rare and endangered plants and their 
derivatives, except for research purposes or as a 
final product  Articles 17.4 and 17.5 of the Law on Natural Plants  
Acetic acid in small packages, with a concentration 
of more than 25%  Government Resolution No. 378 of 2014  
Products containing asbes tos, including brake pads 
containing asbestos  Government Resolution No. 378 of 2014  
Equipment for the production of foam with HCFC -22 
and HCFC -141b, which are harmful to the ozone 
layer and contribute to global warming  Montreal Protocol on Substances that Deplete the 
Ozone Layer; Government Resolution No. 378 of 2014  
Unauthorized pyrotechnic devices  Law on Controlling the Circulation of Explosives and 
Explosive Devices; Government Resolution No. 149 of 
2006 
a Also applies to goods in trans it. 
Source:  Mongolian Customs, List of Prohibited and Restricted Goods . Viewed at: 
https://www.customs.gov.mn/2014 -03-25-01-15-56. 
 
49 Legalinfo, Government Resolution No. 329 on  Approval of Procedure , 14 August 2019. Viewed at: 
https://www.legalinfo.mn/law/details/14606 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 57 - 
 
  Table 3.14 List of strategic food items, 2020  
 HS Description  
I. Beef 
1 0201.10.00  Meat of bovine animals, fresh or chilled, carcasses and half -carcasses  
2 0201.20.10  Meat of bovine animals, fresh or chilled, other cuts with bone in  
3  0201.30.10  Meat of bovine animals, fresh or chilled, boneless  
4  0202.10.00  Meat of bovine animals, frozen, carcasses and half -carcasses  
5  0202.20.10  Meat of bovine animals, frozen, other cuts with bone in  
6  0202.30.10  Meat of bovine animals, frozen, boneless  
II. Sheep  
7 0204.21.00  Meat of sheep, fresh or chilled, carcasses and half -carcasses  
8 0204.22.00  Meat of sheep, fresh or chilled, other cuts with bone in  
9 0204.23.00  Meat of sheep, fresh or chilled, boneless  
10 0204.41.00  Meat of sheep, frozen, carcasses and half -carcasses  
11 0204.42.00  Meat of sheep, frozen, other cuts with bone in  
12 0204.43.00  Meat of sheep, frozen, boneless  
III. Goat meat  
13 0204.50.00  Meat of goats  
IV. Horse meat  
14 0205.00.11  Meat of horses, with bone in  
15 0205.00.12  Meat of horses, boneless  
V. Yak meat  
16 0201.20.20  Meat of yak, fresh or chilled, other cuts with bone in  
17 0201.30.20  Meat of yak, fresh or chilled, boneless  
18 0202.20.20  Meat of yak, frozen, other cuts with bone in 
19 0202.30.20  Meat of yak, frozen, boneless  
VI. Milk and cream, not concentrated nor containing added sugar or other sweetening matter:  
20 0401.10.00  - of a fat content, by weight, not exceeding 1%  
21 0401.20.00  - of a fat content, by weight, exceeding 1% but not exceeding 6%  
22 0401.40.00  - of a fat content, by weight, exceeding 6% but not exceeding 10%  
23 0401.50.00  - of a fat content, by weight, exceeding 10%  
VII. Dry milk  
24 0402.21.10  Milk powder  
VIII.  Food 
25 1001.19.00  Durum wheat other than seed  
26 1001.99.10  Soft durum  
IX. Seed 
27 1001.11.00  Durum wheat, seed  
28 1001.91.10  Soft wheat, seed  
X. Flour 
29 1101.00.11  High grade  
30 1101.00.12  Grade I  
31 1101.00.13  Grade II  
32 1101.00.20  Wheat -rye flour (meslin)  
XI.  Drinking water  
33 2201.90.10  Bottled drinking water  
Source:  Mongolian Customs, List of Strategic Foods . Viewed at: 
http://www.customs.gov.mn/btkus/pdf/strategyfood.pdf . 
3.54.   A number of categories of products are also subject to restriction or licensing requirements 
(Table 3.15). Licensing requirements emanate from Article  8 of the Customs Law, and are further 
expanded upon  in Government Resolution No. 219 of 25 October 2002, as amended.50 As stated in 
the Resolution, the issuance of licences is under the authority of the respective state administrative 
body, and licences are issued for a period of up to one year, which may be extended for an additional 
year. The Resolution also specifies standard forms for the application and the issuance of licences, 
and for reporting to the Ministry of Industry and Trade.  
 
50 Legalinfo, Government Resolution No. 219 on Listing and Approval of Regulations "List of coded goods 
licensed to cross the state border" . Viewed at: https://www.legalinfo.mn/law/details/2449 . Annex 1 to this 
resolution was amended by Government Resolution No. 379 of 1 December 2014, Government Resolution 
No. 410 of 19 October 2015, and Government Resolution No. 149 of 14 December 2015, as amended by 
Government Resolution No. 32 of 11 January 2016. Lega linfo, Government Resolution No. 32 on Amendments 
to the Resolution . 11 January 2016. Viewed at: https://www.legalinfo.mn/law/details/11571?lawid=11571 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 58 - 
 
  3.55.   Mongolia has not notified these measures to the WTO pursuant to the notification 
requirements on quantitative restrictions or import licensing, as applicable, during the review period.  
Table 3.15 Restricted goods subject to import licensing, 2020  
Good  Legal reference  Licensing agency  
Breeding animals  Law on Licensing of Business 
Activities  MOFALI, Veterinary Breeding 
Department  
Very rare living animals  Article  36.1 of the Law on Fauna  Ministry of Environment and 
Tourism  
Live animals other than very rare 
animals, raw materials of their 
origin, research samples, and 
specimens  Article  36.2 of the Law on Fauna  Ministry of Environment and 
Tourism  
Plants, perennial roots, rhizomes, 
and tubers of plants  Articles 17.1 and 17.3 of the Law 
on Natural Plants  Ministry of Environment and 
Tourism  
Very rare and endangered plants 
and their derivatives, for research 
purposes or as a final product  Articles 17.4 and 17.5 of the Law 
on Natural Plants  Ministry of Environment and 
Tourism  
Ozone -depleting substances  Law on Air; Law on Licensing of 
Business Activities; Government 
Resolution No. 95 of 2007  National Ozone Service  
Alcohol  Law on Licensing of Business 
Activities  MOFALI  
Tobacco  Law on Licensing of Business 
Activities  MOFALI  
All types of fuel  Law on Licensing of Business 
Activities  Ministry of Mining and Heavy 
Industry  
Veterinary medicine and medical 
supplies  Law on Licensing of Business 
Activities  Veterinary breeding station  
Substances used to protect plants  Law on Business; Licensing Law 
on Toxic and Hazardous 
Chemicals  MOFALI and Ministry of 
Environment and Tourism  
Improved livestock from abroad  Law on Licensing of Business 
Activities  MOFALI  
Human medicine, medical devices, 
instruments and prosthetic 
equipment  Law on Licen sing of Business 
Activities  Ministry of Health  
Biologically active products  Law on Licensing of Business 
Activities  Ministry of Health  
Seedlings of trees and shrubs for 
experimental research  Law on Natural Plants  Ministry of Environment and 
Tourism  
Pyrotechnic devices  Law on Controlling the 
Circulation of Explosives and 
Explosive Devices; Government 
Resolution No. 149 of 2006  Ministry of Mining and Heavy 
Industry  
Firearms, ammunition and firearm -
like devices  Law on Firearms; Law on 
Licensin g of Business Activities;  
And Government Resolution No. 
219 of 2001  Ministry of Justice and Internal 
Affairs  
Drugs and psychotropic substances 
and their precursors  Law on Business Licensing;  
Law on Control over the 
Circulation of Narcotic Drugs and 
Psychotropic Substances  Ministry of Health  
Pathogens and their toxins  Law on Licensing of Business 
Activities  Ministry of Health  
Nuclear substances  Law on Business Licensing;  
Law on Nuclear Energy  Nuclear Energy Commission  
Radioactive minerals and radiation 
sources  Law on Business Licensing;  
Law on Nuclear Energy  Ministry of Mining and Heavy 
Industry  
Explosives, explosive devices and 
raw materials  Law on Licensing of Business 
Activities; Law on Explosives and 
Explosive Devices  Ministry of Mining and Heavy 
Industry  
Strategic food  Food Law  MOFALI  
Tissues and organs certified for 
medical purposes only  Donor Law  Ministry of Health  
For the purpose of restoration and 
promotion of unique and valuable 
historical and cultural monuments  Law on Pro tection of Cultural 
Heritage  Ministry of Culture  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 59 - 
 
  Good  Legal reference  Licensing agency  
Endangered species of wildlife and 
flora  CITES, Annex 2  Ministry of Environment and 
Tourism  
Electricity  Article  12.1.10 of the Energy 
Law Ministry of Energy  
Toxic and hazardous chemicalsa Law on Toxic and Hazardous 
Chemicals; Law on Licensing of 
Business Activities; Government 
Resolution No. 95 of 2007  Ministry of Environment and 
Tourism  
a Also required for transit.  
Source:  Mongolian Customs, List of Prohibited and Restricted Goods . Viewed at: 
https://www.customs.gov.mn/2014 -03-25-01-15-56; and information provided by the authorities.  
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.56.   Mongolia does not have any legislation on anti -dumping, countervailing, or safeguard 
measures, nor has it established any authority to initiate or conduct investigations related to these 
measures. Thus, it has not imposed any anti -dumping, countervailing, or safeguard measures at this 
time. 
3.57.   However, Mong olia established a working group, consisting of representatives from relevant 
ministries and the Mongolian National Chamber of Commerce and Industry  (MNCCI) , that has been 
directed by  the Minister of Foreign Affairs to develop a regulation on safeguard mea sures in 
compliance with the WTO  Agreement on Safeguards. According to the authorities, the draft 
regulation aims to distribute functions among departments, to allow it to also apply bilateral 
safeguard measures in line with FTAs to which Mongolia is a par ty. 
3.58.   With respect to Mongolia's EPA with Japan, Section 2 contains provisions on safeguards, and 
Article  2.17, the relevant rules on anti -dumping and countervailing measures. The provisions of 
Article 2.17 state that nothing in the Agreement shall prevent a  party from taking measures in 
accordance with the relevant WTO provisions. Similarly, for safeguards, nothing in the EPA prevents 
a party from invoking a global safeguard measure pursuant to Article XIX of GATT  1994, the 
Agreement on Safeguards, or Articl e 5 of the Agreement on Agriculture. The EPA allows the parties 
to invoke a bilateral safeguard measure under certain conditions and pursuant to an investigation 
by the competent authorities. It also prevents the simultaneous implementation of a bilateral and 
global safeguard on the same item.  
3.1.7   Other measures affecting imports  
3.59.   Mongolia has legislation and related rules that allow it to implement or enforce UN sanctions 
and domestic sanctions. This allows for economic and trade sanctions, arms embargoes, financial 
restrictions, product restrictions, and travel bans. The applicable legislation at the beginning of the 
review period was the Law on Combating Terrorism, 2013, which was replaced by the Law on Counter 
Terrorism and Proliferation of 10 October 2019.51 The main reasons for replacing the Law were to 
develop a legal framework of targeted financial sanctions, to incorporate Recommendations 6 and 7 
of the Financial Action Task Force (FATF) standard, and to broaden the scope of the law to regu late 
proliferation and its financing issues. Following the revision, the Regulation on Listing Terrorists, 
Control and Stopping the Movement of Assets of Listed Persons was also replaced with a new 
Regulation of 25 December 2019. This regulation explains t he obligations laid out in the Law on 
Counter Terrorism and Proliferation and regulates UN Security Council Resolutions (UNSCRs) 1267, 
1373, and other resolutions. These sanctions are focused on designated terrorists, or 
non-cooperating countries and juris dictions. Mongolia does not have any trade or financial sanctions 
associated with the Law on Counter Terrorism and Proliferation. For domestic sanctions, Mongolia 
implements UNSCR 1373.  
 
51 Legalinfo, Law on Counter Ter rorism and Proliferation . Viewed at: 
https://www.legalinfo.mn/law/details/14699?lawid=14699 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 60 - 
 
  3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirement s 
3.60.   Customs clearance procedures for exports involve essentially the same procedure as for 
imports – declaration of the goods, inspection of customs documents, inspection of the goods and 
means of transport, levying of any duties or taxes, and release of the  goods. Like imports, various 
fees may also apply to exports (Table 3.1). According to the Customs Law, there are four main types 
of export: goods may be (i) permanently exported; (ii) temporarily exported; (iii) sent for processing 
abroad; or (iv) returne d from abroad. In essence, goods may be exported from the customs territory 
on the basis of payment of any customs and other taxes, based on the documents required. In 2019, 
electronic applications through the Internet accounted for 15% of total declaratio ns.52 As is the case 
for importation, the CAIS is used for exportation.  
3.61.   An expedited paperless clearance process exists for coal exports, and Mongolia is expanding 
and transferring some mineral export clearance activities to electronic form. Currently, 94. 3% of the 
total customs clearance of coal, fluorspar, oil, iron ore, and copper concentrate exports is completed 
electronically.53 According to Article  2.14 of the Guidelines for Customs Control of Minerals, Mining 
Products and Vehicles, 2015, and Article  7.1.14 of the General Procedures for Customs Control of 
Goods and Means of Transportation Across the Customs Border, 2019, drawn up by Mongolian 
Customs, customs declarations or manifests shall not be published unless the declarant submits a 
request.54 
3.62.   The MNCCI has the authority to provide certificates of origin for exports.55 This is regulated 
by MNCCI's Regulation on Determining the Origin of Export Products Derived from Mongolia and on 
Issuing the Certificate of Origin.56 Thus, the MNCCI issues Origi n Form A for exports benefitting from 
GSP schemes, Form E for preferential treatment pursuant to the Mongolia -Japan EPA, and Form B 
for other destinations. The exporter must submit an application form, a copy of the purchase 
agreement, an invoice, a packin g list, a state registration certificate, and relevant licences or 
inspection documents if necessary. The MNCCI also provides the interface for the European Union's 
registered exporter system for preferential trade. Separate sanitary certificates for live animals and 
phytosanitary certificates for wood are issued by the General Agency for Specialized Inspection 
(GASI).57 Soum and district authorities' forest units issue certificates of origin for wood and timber 
pursuant to a 2013 regulation that controls t he issuance and use of logging licences and certificates 
of origin under the provisions of Article  34 of the Forest Law.58 
3.63.   Similar to the case of imports, Chapter 5 of the Law on Customs Tariffs and Customs Taxes 
provides details on how to value goods for customs export clearance.59 Four different methodologies 
are possible: (i) transaction value method, (ii) computed value method calculated from expenses, 
(iii) transaction value of identical or similar goods, and (iv) market information and research pricin g 
method based on world market prices.60 As with customs valuation methodologies for imports, the 
methods are hierarchal, starting with the transaction value method.  
 
52 Information provided by the authorities.  
53 A special fee of MNT 1,500 per tonne applies for the clearance of coal and mining sector mineral 
products  (Table 3.1).  
54 Legalinfo, Order No. A/275 of the Head of the General Customs Department on Approval of 
Procedure , 4 December 2019. Viewed at: https://www.legalinfo.mn/law/details/14908?lawid=14908 .  
55 MNCCI, Certificate of Origin . Viewed at: https://www.mongolchamber.mn/p/266 . 
56 MNCCI, Regulation on Determining the Origin of Export Products Derived from Mongolia and on 
Issuing the Certificate of Origin . Viewed at: 
https://resource4.sodonsolution.org/mongolchamber/File/2019/10/17/n1nd1c6w3d82otsg/CEO%20regulation
%20new%202007.pdf .  
57 Legalinfo, Veterinary Hygiene Hygiene -Original Certificate and Procedure for Use . Viewed at: 
https://www.legalinfo.mn/annex/details/4229?lawid=7958 .  
58 Legalinfo, Procedure for Granting and Control of Origin . Viewed at: 
https://www.legal info.mn/annex/details/5940?lawid=9339 .  
59 Legalinfo, Law on Customs Tariffs and Customs Taxes , 20 May 2008. Viewed at: 
https://www.legalinfo.mn/law/details/208 . 
60 World market prices include price li sts, reference prices, and information on the Internet.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 61 - 
 
  3.2.2   Taxes, charges, and levies  
3.64.   Mongolia continues to apply export duties, including on five ca tegories of wood products as 
at July 2020 (Table 3.16).  There were no significant changes to the products subject to export duty 
during the review period. A specific export tax is also applied certain skins of goats (Table 3.17). 
According to the authoriti es, the export duties were established to protect the environment and 
avoid excessive wood cutting.  
Table 3.16 Export duty for certain commodities, 2020  
Product/commodity  HS code  Duty amount  
Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; 
wood in chips or particles; sawdust and wood waste and scrap, 
whether or not agglomerated in logs, briquettes, pellets or similar 
forms  4401 MNT 150,000/m3 
Wood in the rough, whether or not strip ped of bark or sapwood, or 
roughly squared  4403 MNT 150,000/m3 
Railway or tramway sleepers (cross -ties) of wood  4406 MNT 150,000/m3 
Wood sawn or chipped lengthwise, sliced or peeled, whether or not 
planed, sanded or end -jointed, of a thickness exceeding 6 mm  4407 MNT 150,000/m3 
Wood (including strips and friezes for parquet flooring, not assembled) 
continuously shaped (tongued, grooved, rebated, chamfered,  
V-jointed, beaded, moulded, rounded the like) along any of its edges, 
ends or faces, whe ther or not planed, sanded or end -jointed  4409 MNT 150,000/m3 
Source:  Mongolian Customs, Customs Duties and Other Taxes . Viewed at: 
http://www.customs.gov.mn/duty/trf . 
Table 3.17 Specific export tax, 2020  
Product/Commodity  HS Code  Tax amount  
Skins of goats  4103.9  MNT 1,500/piece  
Skins of kid goats  4103.9  MNT 1,500/piece  
Untreated furskins of Mongolian goats or kids  4301.1  MNT 1,500/piece  
Source:  Mongolian Customs, Customs Duties and Other Taxes . Viewed at: 
http://www.customs.gov.mn/duty/trf .  
3.2.3   Export prohibitions, restrictions, and licensing  
3.65.   Article 5 of the Customs Law prescribes the rules of prohibited and restricted goods for export. 
Goods prohibited to be exported by legislation are not allowed to leave the customs territory, and 
the same applies for goods in transit unless otherwise prescribed in international treati es 
(Table  3.18). Similar to the situation for imports (Section 3.1.5), many of the export prohibitions or 
restrictions emanate from international agreements  and have been in place for many years without 
modification. Mongolia also maintains a list of goods  subject to control or licensing upon export 
(Table 3.19).  
3.66.   According to a government resolution of July 2019, the export of Saker falcons is prohibited.61 
This is a continuation of an earlier measure from 2013 that applied for five years. It was prohibite d 
during the entire review period.62 Exports of foods identified as "strategic food items" are controlled 
by quantitative restrictions and licensing (Table 3.14 and Section 3.1.5).  
 
61 Legalinfo, Government Resolution No. 293 about Prohibition of Export , 9 July 2019. Viewed at: 
https://www.legalinfo.mn/law/deta ils/14548?lawid=14548 .  
62 Legalinfo, Government Resolution About Prohibition of Export , 12 January 2013. Viewed at: 
https://www.legalinfo.mn/law/details/8926?lawid=8926 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 62 - 
 
  Table 3.18 List of goods prohibited to export, 2020  
Good  Legal reference  
Unauthorized drugs and psychotropic substances 
and their raw materialsa Articles 13.1.5, 13.1.7, and 13.1.8 of the Law on 
Controlling the Circulation of Narcotic Drugs and 
Psychotropic Substan ces 
All types of tobacco advertising materialsa Article  8.2 of the Law on Tobacco Control  
Alcohol advertising materialsa Article  9.3 of the Law on Combating Alcoholism  
Toxic and hazardous chemicals prohibited or 
unlicensed in Mongolia  Government Resolution No. 95 of 2007 on Articles 
5.1, 6.4, and 15.4 of the Law on Toxic and 
Hazardous Chemicals  
Nuclear material for weaponsa Article  33.2 of the Law on Nuclear Energy  
Prohibited and unlicensed nuclear materials, 
radiation generators, rad iation -generating tools, 
equipment and technology prohibited by Mongolian 
lawa Articles 37.2.1, 41.1, and 41.2 of the Law on 
Nuclear Energy  
Pornography, books, movies, videos, pictures, etc.  Article  5.3 of the Law on Combating Pornography  
Waste ferrous and non -ferrous metals (cast iron, 
steel, copper, brass, aluminium and their alloys), 
cast and other primary ferrous and non -ferrous 
metals, spare parts and products made of ferrous 
and non -ferrous metals not used for their intended 
purpose, except for bee r cans  Parliament Resolution No. 05 of 1988  
The animals and plants listed in Annex 1 to the 
CITES for purposes other than research  CITES  
Unauthorized plants, perennial roots, rhizomes, and 
tubers of plants  Articles 17.1 and 17.3 of the Law on Natural Plants  
Very rare and endangered plants and their 
derivatives, except for research purposes or as a 
final product  Articles 17.4 and 17.5 of the Law on Natural Plants  
Saker falcons  Government Resolution No. 293 of 2019  
Unauthorized pyrotechnic dev ices Law on Controlling the Circulation of Explosives and 
Explosive Devices; Government Resolution No. 149 
of 2006  
a Also applies to goods in transit.  
Source:  Mongolian Customs, List of Prohibited and Restricted Goods . Viewed at: 
https://www.customs.gov.mn/2014 -03-25-01-15-56. 
Table 3.19 Restricted goods subject to export licensing, 2020  
Good  Legal reference  Licensing agency  
Breeding animals  Law on Licensing of Business 
Activities  MOFALI  
Veterinary Breeding 
Department  
Very rare living animals  Article  36.1 of the Law on Fauna  Ministry of Environment and 
Tourism  
Live animals other than very rare 
animals, raw materials of their 
origin, research samples, and 
specimens  Article  36.2 of the Law on Fauna  Ministry of Environment and 
Tourism  
Plants, perennial roots, rhizomes 
and tuber s of plants  Articles 17.1 and 17.3 of the Law 
on Natural Plants  Ministry of Environment and 
Tourism  
Very rare and endangered plants 
and their derivatives for research 
purposes or as a final product  Articles 17.4 and 17.5 of the Law 
on Natural Plants  Ministry of Environment and 
Tourism  
Firearms, ammunition and firearm -
like devices  Law on Firearms; Law on Licensing 
of Business Activities; Government 
Resolution No. 219 of 2001  Ministry of Justice and 
Internal Affairs  
Drugs and psychotropic substances 
and their precursors  Law on Business Licensing; Law  
on Control over the Circulation of 
Narcotic Drugs and Psychotropic 
Substances  Ministry of Health  
Pathogens and their toxins  Law on Licensing of Business 
Activities  Ministry of Health  
Nuclear substances  Law on Business Licensing; Law on 
Nuclear Energy  Nuclear Energy Commission  
Radioactive minerals and radiation 
sources  Law on Business Licensing; Law on 
Nuclear Energy  Ministry of Mining and Heavy 
Industry  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 63 - 
 
  Good  Legal reference  Licensing agency  
Explosives, explosive devices and 
raw materials  Law on Licensing of Business 
Activities; Law on Explosives and 
Explosive Devices  Ministry of Mining and Heavy 
Industry  
Strategic food  Food Law  MOFALI  
Tissues and organs certified for 
medical purposes only  Donor Law  Ministry of Health  
For the purpose of restoration and 
promotion of unique and valuable 
historical and cultural monuments  Law on Protection of Cultural 
Heritage  Ministry of Culture  
Endangered species of wildlife and 
flora  CITES, Annex 2  Ministry of Environment and 
Tourism  
Electricity  Article  12.1.10 of the Energy Law  Ministry of Energy  
Toxic and hazardous chemicalsa Law on Toxic and Hazardous 
Chemicals; Law on Licensing of 
Business Activities; Government 
Resolution No. 95 of 2007  Ministry of Environment and 
Tourism  
a  Also applies to goods in transit.  
Source:  Mongolian Customs, List of Prohibited and Restricted Goods . Viewed at:  
https://www.customs.gov.mn/2014 -03-25-01-15-56. 
3.2.4   Export support and promotion  
3.67.   In 2019, an Export Promotion Council was established by the Government, pursuant to an 
order of the Prime Minister, with a mandate of overseeing progress on the Mongolian Export 
Program.63 The Council is composed of representatives from various m inistries and specialized 
agencies, and NGOs representing the private sector, such as the MNCCI and labour organizations. 
It met for the first time in June 2019 to formulate, implement, and coordinate export promotion 
policies.64 The Mongolian Export Progr am of 2018 is an important policy instrument of the 
Government, aimed at supporting the research and marketing of priority products that can be 
exported to foreign markets.65 Its main mandate is to increase the exports of non -mining products 
by creating a conducive environment and facilitating trade. Its initiatives to support exports include:  
• involving producers who export value -added products using tax credits and exemptions for 
the purchase of imported raw materials;  
• including the export income of the ex porter in the tax credit;  
• providing incentives for exporters;  
• establishing export production and trade networks; and  
• developing an export insurance system.66 
3.68.   The Government is currently implementing the provisions of the Mongolian Export Program, 
pursuant to the Action Plan approved by the Minister of Foreign Affairs in 2019.  Another initiative is 
Mongolia's Export Development Project, developed in cooperation with the World Bank, that focuses 
particularly on SMEs. It aims to help non -mining sectors strengt hen their export capabilities. The 
Project began in 2016 and is expected to be finalized by 2021. Four main project development 
indicators that aim to achieve certain targets: (i) increase export volumes; (ii) increase the number 
of firms that obtain inter nationally recognized quality certification; (iii) increase the number of firms 
that start exporting following participation in Project activities; and (iv) provide export credit 
 
63 Order No. 37 of the Prime Minister, 28 March 2019.  
64 Mongolia News Agency. Export Promotion Council Holds Its First Meeting , 26 June 2019. Viewed at: 
https://montsame.mn/en/read/194013 .  
65 Legalinfo, Government Resolution No. 278 about Approval of the Program , 5 September 2018. Viewed 
at: https://www.legalinfo.mn/law/details/13692 . 
66 Mongolia News Agency, Export Promotion Council Holds Its First Meeting , 26 June 2019. Viewed at: 
https://montsame.mn/en/read/194013 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 64 - 
 
  insurance products. As at 2020, the first target of increasing exports had be en met and even 
exceeded; the other three had not yet been achieved.67 
3.69.   Mongolia's free zone (FZ) regime of 2002 was established with a view to developing export -
oriented business and supporting exports in general, in addition to attracting new trade and 
investment opportunities. As at 2020, three FZs were operating – Altanbulag, Tsagaannuur, and 
Zamiin -Uud. The main law governing FZs was revised in 2015, replacing the previous law from 
2002.68 The new law has provisions on the establishment of FZs, manageme nt of FZs, special rules 
for activities in FZs, and land and infrastructure elements.69 The changes introduced in the revised 
law were designed to improve the cooperation between public and private entities in developing FZs. 
In 2019, USD 2.7 million of fo reign goods were imported into the Altanbulag and Zamiin -Uud FZs 
under the FZ procedure, and USD 158 ,000 of Mongolian goods were imported into the FZ from the 
customs territory.70 
3.70.   The MNCCI is also involved in export support and promotion activities, throu gh coordinating 
and organizing trade fairs for the business community. It also provides market information and 
analysis to its members. Mongolia does not provide direct subsidies for any exported goods, including 
agricultural products.  
3.2.5   Export finance, ins urance, and guarantees  
3.71.   Mongolia is developing its export financing, insurance, and guarantees areas; see 
Section  3.2.4 on its new and proposed initiatives. At present, Mongolia does not have any officially 
government -backed export finance, insurance, or gu arantee products, but there are two areas in 
which such products are planned.  
3.72.   Agricultural Re -insurance (AgRe) LLC was established, following a government resolution in 
2014, to implement agricultural reinsurance services to protect herders and farmers fro m possible 
force majeure  events in the agricultural sector.71 Government Resolution No. 303 of October 2018 
renamed AgRe LLC to Mongolian Reinsurance JSC, with a view to developing an offer of export 
insurance and guarantee products. The plan to develop th e financial sector until 2025 also provides 
policy direction, as it indicates that the reinsurance system should be further developed to reduce 
foreign currency outflows, introduce international risk management standards to reduce costs, and 
establish a na tional reinsurance entity. As Mongolian Reinsurance JSC's activities expanded, it began 
cooperating with 15 insurance companies operating in Mongolia and, at present, it provides 
insurance in the following sectors: asset, liability, freight, accident, airc raft tonnage, and financial 
insurance, as well as insurance in the field of agriculture. Currently, it retains about 4% of 
reinsurance costs inside the country with a goal of increasing its share to 10% in 2020. According 
to the authorities, the Law on Ins urance prohibits insurance and reinsurance companies from issuing 
guarantees of any kind, thus Mongolian Reinsurance JSC has only been able to plan development of 
these products.  
3.73.   Article  8.2 of Chapter 2 of the Law on the Development Bank of Mongolia state s: "At least 
60% of the total loan, funding and guarantees from the Development Bank of Mongolia will be spent 
on export -oriented projects and programs." As such, the Bank has provisions to support exporters. 
However, it has not yet started to provide spec ific products and services that support exporters, 
such as guarantees, financing, and insurance. At present, it is in the process of developing them.  
 
67 World Bank, Mongolia Export Development Project . Viewed at: 
https://projects.worldbank.org/en/projects -operations/project -detail/P147438?lang=en .  
68 Legalinfo, Law about Free Zones , 12 February 2015. Viewed at: 
https://www.legalinfo.mn/law/details/10930 .  
69 For example, non -tariff restrictions are not applied on goods imported into or exported from FZs, and 
simplified customs procedures are applied when importing int o or exporting from an FZ.  
70 Information provided by the authorities.  
71 Legalinfo, Resolution No. 280 on the Establishment of the Agricultural Reinsurance Legal Entities , 
28 August 2014. Viewed at: https://www.legalinfo.mn/law/details/10574?lawid=10574 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 65 - 
 
  3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.74.   Mongolia has no specific direct subsidies, except those enumerated below and in Section 4 
(Sections 4.1 and 4.3).  It has several tax and non -tax incentives regularly offered to investors 
(Section 2.4). Free zones and industrial parks also offer certain advantages and infrastructure 
measures (Section 3.2.4 ), and a number of customs tariff and VAT exemptions are also in place for 
certain sectors (Sections 3.1.3.2 and 3.1.4.1).  
3.75.   As a result of the COVID -19 pandemic and the introduction of border restrictions, Mongolia 
issued a government resolution pursuant to  the Law on Disaster Protection that puts in place 
measures to support the cashmere industry. In particular, it reduces interest rates on new loans, 
provides special loans of up to MNT 300 billion for cashmere production with a one -year term and a 
3% rate of interest, and advises the Development Bank of Mongolia to take measures to increase 
funding sources.72 
3.76.   Special privileges and a development fund for small and medium -sized enterprises (SMEs) 
are in place.73 The Law on the Support of Small and Medium Ent erprises and Services was revised 
in 2019, and outlines government policies and support for SMEs.74 In addition to the Small and 
Medium Enterprise Development Fund (SME Development Fund) noted below, the support includes 
soft loans, loan guarantees, intere st subsidies, tax credits and exemptions, support through 
procurement, and support to access foreign and domestic markets. The SME Development Fund was 
established in 2009 to support SME expansion in general, and its main activities include providing 
long-term soft loans to SMEs, offering professional advice and training, providing interest rate 
subsidies to SMEs that export their products; and providing leased equipment bought with state 
funds to support SMEs.75 The Action Plan of the Government for 2016 -20 includes special 
considerations for SMEs, and supports domestic production through tax and customs policies. These 
include discounts on regional taxation, and a 1% income tax and a 90% tax credit for SMEs76 in the 
food, garment and textile, construction materials, and agriculture and animal husbandry sectors.77 
Furthermore, the National Program to Support Small and Medium Enterprises is being implemented 
during 2019 -22, with an emphasis on increasing productivity, market competitiveness, and 
employment of  SMEs. It contains a number of provisions for SMEs, such as creating access to 
preferential financial conditions, improving the legal environment for guarantees and insurance, and 
creating new loan products.78 
3.77.   The Law on Government Special Funds, 2019, pro vides the legal basis for the funding of 
certain special government funds, including the SME Development Fund.79 Twenty -three such funds 
are specified, with funding coming from the Government, their own generated income, or 
international donors/assistance. Most of the funds are for social purposes, such as education or 
social welfare, but a few may impact trade or c ommerce, such as the agricultural support fund and 
the broadcasting development fund.  
 
72 Legalinfo, Government  Resolution No. 101 on Some Measures to Be Taken and Implemented in the 
Cashmere Sector , 19 March 2020. Viewed at: https://www.legalinfo.mn/law/details/15202?lawid=15202 .  
73 SMEs and services are defined in the law as businesses operating in the manufacturing, trade, or 
services sectors, with up to 200 employees and annual sales revenue of up to  MNT 2.5 billion. Certain business 
activities, such as mining, mortgage lending, and manufacture of alcohol and tobacco, are excluded from the 
law. According to the National Statistics Office, 77% of registered enterprises and 72% of employment, but 
only 2 .3% of exports, are in SMEs.  
74 Legalinfo, Law on Support of Small and Medium Enterprises and Services , 6 June 2019. Viewed at: 
https://www.legalinfo.mn/law/details/14525 .  
75 SME Development Fund. Viewed at: https://smefund.gov.mn/ ; and  Legalinfo, Law about the Loan 
Guarantee Fund , 10 February 2012. Viewed at: https://www.legalinfo.mn/law/details/286 .  
76 For SMEs with an annual income of less than MNT 1.5 billion.  
77 Ministry of Food, Agriculture and Light Industry, SME Policy . Viewed at: 
https://mofa.gov.mn/exp/blog/25/224 .  
78 Legalinfo, Government Resolution No. 156 on Approval of the National Program, 17 April 2019. 
Viewed at: https://www.legalinfo.mn/law/details/14350 .  
79 Legalinfo, Law about Government Special Funds , 13 November 2019. Viewed at: 
https://www.legalinfo.mn/law/details/14848 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 66 - 
 
  3.78.   Mongolia does not have export subsidies on agricultural products.80 
3.79.   Mongolia made no notifications to the Committee on Subsidies pursuant to Article  XVI:1 of 
the GATT  1994 and Article  25 of the Agreement on Subsidies and Countervailing Measures 
(SCM  Agreement) since 2004. The last notification, covering the period 2000 -04, indicated that 
Mongolia did not introduce any subsidy within the meaning of Article  1.1 of the SCM  Agreement that 
is specific within the meaning of Article  2 of the Agreement, or operates directly or indirectly to 
increase exports or reduce imports.81 According to the authorities, this remains the case.  
3.3.2   Standards and other technical requirements  
3.80.   In accord ance with its development strategy, Mongolia plans to further promote 
standardization, metrology, conformity assessment, and sampling control policies to ensure national, 
social, and economic security; increase exports; and support the development of natio nal industries. 
The Sustainable Development Vision 2030 has several goals for standards, in particular regarding 
the adoption of international standards in the animal health, fuel, and food sectors.82 For example, 
during the period 2016 -20, Mongolia planne d to develop veterinary services in line with animal health 
standards for the export of livestock and to strictly enforce standards for food products.  
3.81.   This was accomplished by the approval of the new animal health law in December 2017 (in 
force since 1 Ju ne 2018) and the establishment of the General Authority for Veterinary Services 
(GAVS) in compliance with international standards that were recommended by the World 
Organisation for Animal Health (OIE). To implement the new animal health law, more than 120  
pieces of secondary legislation were developed and revised as supporting documents. The GAVS is 
working on the development and adoption of international standards for animal health and food 
safety issues. Mongolia is implementing an animal identification and traceability system through a 
digital veterinary certificate system.  
3.82.   One of the policy developments during the review period was the adoption, in 2016, of the 
National Quality Program, which set out to improve the legal environment for standardization,  
metrology, and the accreditation infrastructure to reach the level of international standards.83 The 
Program emphasizes the food sector and is being implemented during 2016 -20. In addition to its 
main goal of improving the legal framework, it also plans t o build and develop a quality infrastructure 
system, develop the human resource capacity of the quality infrastructure, and increase the 
knowledge and understanding of consumers and producers regarding quality. Specific goals related 
to trade include impro ving the quality of export -oriented products and services through 
standardization, implementing the WTO Technical Barriers to Trade (TBT)  Agreement, increasing the 
capacity of testing laboratories for export -oriented import -substituting products, establish ing an 
electronic foreign trade control system, and introducing EU standards in the construction sector to 
promote trade, testing, and conformity assessment. As at October 2020, not all of these objectives 
had been met; thus, some are also reflected in the  new Government Action Plan for 2020 -24. 
3.83.   The standards -making policy is also guided by Mongolian Agency for Standardization and 
Metrology's (MASM) bi -yearly Standardization Work Plans, which prioritize and focus the work of the 
standards agency. The two mo st recent Work Plans cover the periods 2018 -19 and 2020 -21. The 
most recent Plan focuses on the adoption of International Organization for Standardization (ISO), 
International Electrotechnical Commission (IEC), and other international standards.  According to the 
authorities, one of the main objectives of the standardization policy is to increase the number of 
national standards that are aligned with international standards.  
 
80 WTO document G/AG/N/MNG/9, 4 June 2018.  
81 WTO documents G/SCM/N/60/MNG, 6 Sept ember 2004; G/SCM/N/71/MNG, 6 September 2004; and 
G/SCM/N/95/MNG, 6 September 2004.  
82 Parliament of Mongolia, Mongolia Sustainable Development Vision 2030 , Government  Resolution 
No. 19, 5 February 2016. Viewed at: 
https://www.greengrowthknowledge.org/sites/default/files/downloads/policy -database/MONGOLIA%29% 
20Mongolia%20Sustainable%20Devel opment%20Vision%202030.pdf . 
83 Legalinfo, Government  Resolution No. 344 on Approval of the National Quality Program , 28 June 
2016. Viewed at: https://www.legalinfo.mn/law/details/12140 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 67 - 
 
  3.3.2.1   Framework  
3.84.   There were several developments in the standards framework during the review period. The 
main law on standards, technical regulations, accreditation, and conformity assessment was revised 
and replaced, a new list of products and services subject to mandato ry conformity assessment was 
issued along with the procedures for entering the market, and a new Law on Metrology was adopted 
(Table 3. 20). Other developments included the establishment of the National Accreditation Center 
and two regional assay testing la boratories in 2018. A new Order was put in place in 2016 for 
technical regulations that apply to imported alcoholic beverages.  
3.85.   The MASM is the government regulatory agency responsible for policy, coordinating and 
managing metrology, standardization, and as say inspection. It is also responsible for the 
development of national standards, and providing conformity assessments to domestic and foreign 
products. The MASM has eight departments, including the Institute of Metrology. By an Order of the 
Deputy Prime M inister of September 2016, the MASM's operational strategy and structure were 
amended to support government priorities and action plans.84 The changes were focused to support 
the National Quality Program and in the following areas:  
• to protect the public in terest, human health, the environment, national security, and to 
improve the competitiveness of national industries, products, and services through 
standardization and conformity assessment technical coordination activities;  
• to support social and economic development through a policy to ensure the integrity of 
measurements, and to increase the technical capacity of the measurement system, national 
standard of measurement units, and legal metrology to international levels;  
• to support the establishment of an accreditation system for conformity assessment bodies 
that meet international standards, and to increase economic capacity;  
• to support trade, service providers, and producers through certification activities of product, 
service, and management systems (ISO  9001, IS O 14000, hazard analysis and critical 
control points (HACCP)), and to create favourable conditions for them to compete fairly in 
the market; and  
• to protect the interests of consumers by providing sample certification at the international 
level, id entifying precious metal samples and identifying gemstones in accordance with 
international standards.  
3.86.   Mongolian standards are adopted by the MASM, and standards development activities are 
carried out by technical committees established for different secto rs of the economy. The objective 
of the committees is to draft, evaluate, and give opinions on draft national, regional, or international 
standards; they are composed of representatives of the ministries, representatives of private sector 
entities, and sci entific and professional organizations.  
3.87.   In December 2017, the Law on Standardization, Technical Regulation and Accreditation of 
Conformity Assessment (Law on Standardization) was adopted as the new main law on 
standardization, technical regulation, and co nformity assessment; it entered into force on 
1 July 2018. It contains provisions on technical regulations, standards, conformity assessment, 
accreditation of conformity, violations, and government organization, control, and financing. 
According to the authorities, the main reasons for adopting the Law were to specify that standards 
were "voluntary", to regulate all types of conformity assessment activities, to improve product safety 
and quality in line with international practices, and to improve Mongol ia's alignment with 
international standards (e.g. ISO and IEC) to which it is a member. One of the most important 
changes in the Law is the establishment of a legal environment for an independent National 
Accreditation System. Since August 2020, the Mongol ian National Accreditation System (MNAS) 
operates as an independent body under the Deputy Prime Minister of Mongolia.  
 
84 MASM, Order No. 98 of the Deputy Prime Minister , 8 September 2016. Viewed at: 
https://masm.gov.mn/masmj/wp -content/uploads/2019/03/Agentlagiin -il-tod-baidliin -kart.pdf .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 68 - 
 
  3.88.   In 2016, an Order of the Minister of Industry was issued that approves and enforces technical 
regulations on imported alcoholic beverages.  It requires traders that import alcoholic beverages to 
fully meet the specifications that include Mongolian technical regulations for certain beverages, 
permissible levels of alcohol content, acidity/alkalinity measures, physiochemical characteristics, 
bacteriological indicators, alcohol safety levels of heavy metals, and packaging, transport, and 
labelling requirements. According to the authorities, technical regulations are applicable to both 
imported and domestically produced beverages. This technical r egulation has not been notified to 
the WTO.  
3.89.   The List of Products and Services Subject to Mandatory Conformity Assessment was approved 
by a government resolution in 2018 in compliance with Clause 13.4 of the Law on Standardization 
(see para. 3.100 for prod uct coverage). The same resolution also includes the Procedures to Supply 
Goods and Services with Conformity Attestation in the Domestic Market and International Market. 
This resolution gives the responsibility for enforcement of the measures to the MASM, and to 
Mongolian Customs for imported products; they have the responsibility to allow the supply of 
products that meet the requirements and to not allow products to cross the border without a valid 
certificate of conformity. Special provisions apply to alc oholic beverages and tobacco products, in 
that they must have an approved conformity assessment before entering the country. In November 
2019, Mongolia notified the TBT Committee of this draft Government Resolution.85 
3.90.   The new Law on Metrology was also adop ted during the review period, and it entered into 
force in June 2020. It aims to ensure the unity of measurement, and support economic and social 
development through metrological policy. There are provisions on measurement units, standards, 
and inspection;  metrology policy; organization of metrology within the Government; and powers, 
violations, financing, and rights and obligations of citizens and legal entities. The Law establishes 
the legal environment for the Institute of Metrology's objective of conduc ting scientific research to 
create measurement standards, and improve unit transmission and accuracy. Accredited 
professional metrological organizations, departments, and laboratories shall establish state 
standards of measurement, ensure unit transmission , verify measuring instruments, and design 
testing activities. In order to facilitate public services to business entities, organizations, and 
consumers, and to expand e -services, the metrology licen ce will be abolished, and a simplified 
system for registr ation of metrology information in the state -unified database will be established. 
Furthermore, in order to reduce technical barriers to foreign and domestic trade, the results of initial 
certification and design tests will be accepted on a contractual basi s. 
3.91.   The Law on Fortified Food, 2018, entered into force on 31 December 2019. It requires the 
compulsory enrichment of certain foods to protect the health of the population. It specifies that the 
MASM shall approve the national product standard for each type  of fortified food. As at October  2020, 
two such fortified food standards had been issued on wheat flour and food -grade iodized salt.86 Both 
importers and producers are obliged to meet the food fortification standards. The Law also contains 
several provisi ons to support its implementation. There are requirements for the Parliament to 
determine the customs duty, tax, and credit policies for the import of equipment and concentrates 
for food enrichment. Furthermore, the Law provides for state supports and ince ntives;  however,  
according to the authorities, the State does not provide them to entrepreneurs.  
Table 3.20 Main laws or resolutions on standards, 2020  
Law/resolution  Summary  Reference  
Law on Metrology  Main law on metrology to ensure 
unity of measures  9 May 2019  
https://www.legalinfo.mn/law/details/14440   
Law on 
Standardization, 
Technical Regulation 
and Accreditation of 
Conformity 
Assessment  Main (revised) law establishing the 
legal basis for standardization, 
technical regulation, and 
accreditation of conformity 
assessment  21 December 2017  
https://www.legalinfo.mn/law/details/13071  
Resolution No. 291 on 
Listing and Approval of 
Rules  List of products and services 
subject to mandatory conformity 
assessment and the procedures for 3 October 2018  
https://www.legalinfo.mn/law/details/13707  
 
85 WTO document G/TBT/N/MNG/8, 4 November 2019.  
86 "Fortified wheat flour. General requirements MNS 6812:2019"; and "Food grade iodized salt. General 
technical requirements. MNS 5046:2019".  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 69 - 
 
  Law/resolution  Summary  Reference  
supplying these to the Mongolian 
market  
Law on Fortified Food  For the compulsory industrial 
fortification of certain types of food 
with vitamins and minerals, 
including the import, production, 
export, and control of the 
concentration  3 May 2018  
https://www.legalinfo.mn/law/details/13353  
Resolution No. 87 on 
Measures to 
Implement the Law on 
Standardization, 
Technical Regulation 
and Accreditation of 
Conformity 
Assessment  Instructs the Government to take 
certain steps such as organizing 
inspe ctions and approving new 
regulations to implement the new 
law 21 December 2017  
https://www.legalinfo.mn/law/details/13074   
Resolution No. 270 on 
the Establishment of a 
National Accreditation 
Cente r Establishes the National 
Accreditation Center and approves 
its charter  29 August 2018  
https://www.legalinfo.mn/law/details/13644  
 
Resolution No. 275 on 
the Establishment of 
Laboratories  Establishes two regional 
laboratories  5 September 2018  
https://www.legalinfo.mn/law/details/13655  
Order No. 64 for the 
Approval and 
Enforcement of 
Technical Regulations 
on Imported Al cohol Technical regulations on imported 
alcoholic beverages  12 April 2016  
https://www.legalinfo.mn/law/details/11871  
Resolution No. 281 on 
Sample Control and 
Registration  Sampling, certification, and 
inspection of precious metals, 
gemstones, and articles made 
thereof  3 November 2010  
https://www.legalinfo.mn/law/details/2368   
Source:  Compiled by the Secretariat from the sources indicated in the table.  
3.92.   In order to implement Clauses 14.8 and 14.9 of the Law on Standardization and to promote 
consumer protection, the Order on the Design, Dimension and Usage Procedure of Product Safety 
Mark was approved in 2018 for products subject to  mandatory conformity assessment.87 This Order 
was notified to the WTO in November 2019 in WTO document G/TBT/N/MNG/10, with an 
implementation date of 1 August 2020. According to the authorities, the Order was approved in 2018 
and notified to the WTO with some delay. It is expected to improve well -being and safety, as products 
with safety markings may endanger human life, health, or the environment, and the mark confirms 
its compliance with the regulations.  
3.93.   In 2018, the MASM issued the Order on Procedures for Issuing and Registering Supplier's 
Declaration of Conformity to implement Clauses 14.1, 14.5, and 14.6 of the Law on 
Standardization.88 It specifies the procedures for issuing and registering a supplier's declarations of 
conformity, which is one way to  comply if a product is subject to mandatory conformity assessment, 
and how to request registration of a supplier's declaration. It requires that, among other criteria, 
the supplier's declaration be issued by a legal entity registered in Mongolia, and that  registration is 
performed by an accredited certification body. Other provisions specify maximum time limits, 
grounds for refusing to register, and procedures for monitoring products with a supplier's 
declaration.  
3.94.   The regulations on the Rate Charge for Cer tification Services, the Procedure for Product and 
Service Certification according to the Scheme in Mongolia, the Code of Certification Board at MASM, 
and the Code of Certification Expert were revised and approved by Order No. 22, issued by the 
Deputy Prim e Minister in 2019.  
 
87 Legalinfo, Order No. A/253 on the Design, Dim ension and Usage Procedure of Product Safety Mark , 
23 July 2018. Viewed at: https://www.legalinfo.mn/law/details/13570 . 
88 Legalinfo, Order No. A/257 on Procedure for Registration of Supplier's Decl aration , 24 July 2018. 
Viewed at: https://www.legalinfo.mn/law/details/13571 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 70 - 
 
  3.95.   According to the authorities, since 2016 labelling requirements have existed for the labelling 
of pre -packaged foods, and since 2008 for the packaging and labelling of cosmetics.89 These are in 
addition to those specific to imported alc oholic beverages noted above. In 2017, two further 
standards relating to labelling requirements were approved by the MASM on labelling requirements 
for pre -packaged foods, and guidelines for the production, processing, labelling, and marketing of 
organical ly produced foods.90 
3.3.2.2   Standards, technical regulations, and conformity assessment  
3.96.   As at July 2020, more than 6,500 registered standards and technical regulations were listed 
in Mongolia's national database of standards.91 Each year,  between 100 and 200 new and updated 
standards are approved, and between 20 and 200 standards are revoked; since 2014, about one 
third to one half of the new standards have been aligned with international standards (Table 3. 21). 
Table 3.21 List of standards and technical regulations, adopted 2015 -20 
Year Total 
approved 
standards  Of which are 
international 
standards  Percentage of 
standards harmonized 
to international 
standards  Standards 
withdrawn  Technical 
regulations  
2015 128 76 .. 124 0 
2016 115 65 .. 177 0 
2017 101 49 .. 53 1 
2018 60 20 41.2 23 0 
2019 118 81 41.5 83 4 
January to 
August 2020  106 36 42.0 22 0 
.. Not available.  
Source:  Information provided by the authorities.  
3.97.   In July 2016, the MASM's Department of Standards and Metrology launched the 
Estandard.gov.mn website, which provides information on standards and technical regulations 
registered in Mongolia in one database that is searchable by product grouping or type of standard.92 
It also provides lists of valid or recently invalidated standards and technical regulations.  
3.98.   A list of technical regulations to be developed or revised was approved by Government 
Resolution No. 235 in 2019.93 Its Appendix lists 18 new or revised technical regulations in the areas 
of environmental pollutants, construction/building works, measuring instruments, fire safety, 
alcohol, tobacco, leather production, meat and dairy products, personal protective equipment, 
explosives, vehicles, schools, solid fuels, and uranium leaching. As at the end of October 2020, the 
drafts of these technical regulations were under development by the respective ministries, and the 
deadline for issuing them was extended and incorporated in the Action Plan of the Government for 
2020-24. 
3.99.   The Appendix to the  Government Resolution from 2018 lists 184 HS 4 -digit codes of goods 
and 27 categories of services that are subject to mandatory conformity assessment. Goods include 
certain processed foods, beverages, minerals, metals, chemicals and plastics, leather, mac hinery 
and equipment, and textiles; services include such things as bus transport, hotels, tourism services, 
fitness centres, and railway technical works.94 The list excludes many live animals, plants, and raw 
materials that are exempt if they are covered by the Law on Quarantine Control and Inspection.  
 
89 Mongolian standards MNS 6648 and MNS ISO 22715.  
90 MNS OIML R 79: 2017 and MNS CAC GL 32: 2017; and WTO document G/TBT /N/MNG/10, 
4 November 2019.  
91 Estandard. Viewed at: https://estandard.gov.mn/uploads/MON -CAT2020_11_06.pdf . 
92 MASM, Project introduction . Viewed at: http://estandard.gov.mn/about . 
93 Legalinfo, Government Resolution No. 235 on Some Measures to be Taken After the Examination , 
19 June 2019. Viewed at: https://www.legalinfo.mn/law/details /14502 .  
94 Legalinfo, Appendix 1 to Government Resolution No. 291 on Listing and Approval of Rules , 
3 October  2018. Viewed at: https://www.legalinfo.mn/annex/details/8728?lawid=13707 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 71 - 
 
  3.3.2.3   WTO and international conventions or cooperation  
3.100.   During the review period, one specific trade concern (STC) was raised with respect to 
Mongolia in the TBT Committee; and no STCs were raised by Mongolia against other Members. The 
STC was raised in February 2020 by the Russian Federation regarding the mandatory enrichment of 
certain agricultural products with vitamins.95 According to the Russian Federation, this emanated 
from the Law on the Enrich ment of Food Products that entered into force in December 2019 and, in 
particular, to the enrichment of wheat flour. The Russian Federation questioned the rationale for the 
Law, why the standard was mandatory, and its consistency with international standar ds. The time 
between the publication and the entry into force of the measure was also questioned, and was noted 
as being insufficient for producers and exporters to adapt to it. Mongolia clarified a number of points, 
in particular the applicable government  resolution from 2018 and the subsequent standards issued 
in 2019. The matter remained ongoing in the Committee as at May 2020. The MASM was notified as 
being the national enquiry point for Mongolia.96 In 1997, the MASM was also notified as being the 
only standardizing body in Mongolia that had accepted the Code of Good Practice per Annex 3 of the 
TBT Agreement.97 During the review period, Mongolia notified its new Law and Resolution, and three 
technical regulations, to the TBT Committee.  
3.101.   Mongolia is also a  member of the ISO, the FAO/WHO Codex Alimentarius Commission 
(Codex), and the IEC Affiliate Country Programme. During the review period, the MASM also joined 
the MRA of the Asia Pacific Accreditation Cooperation (APAC) in 2016, and became a member of the 
International Accreditation Forum (IAF) in 2018.98 The MASM is a signatory to the ILAC/APLAC MRA 
for the accreditation of testing/calibration laboratories, and it extended its signatory status with 
inspection bodies in 2016. Also, in 2016, the MASM joined the PAC/Multilateral Recognition 
Arrangement (MLA) accreditation of quality, environment, and food safety management certification 
bodies. In 2018, it signed the IAF MLA on Product Certification.  
3.102.   Mongolia has government -level cooperation agreements on sta ndardization and certification 
with a number of countries, i.e. the cooperation agreement on the quality certification and mutual 
recognition of import and export commodities between the Government of Mongolia and the 
Government of the People's Republic of  China, signed in 1994, and the cooperation agreement on 
the quality of import and export commodities between the Trade Ministry of Mongolia and the Federal 
Agency of Standardization, Metrology, and Quality Certification of the Russian Federation, signed i n 
1996. The MASM also has a partnership agreement with the European Committee for Standardization 
(CEN).  
3.3.3   Sanitary and phytosanitary requirements  
3.103.   The SPS sector has been described as improving in recent years, but a number of challenges 
remain.99 For example, SPS requirements and practices are not fully harmonized with international 
SPS standards, there is a lack of risk -based inspection, and regulatory and testing systems are noted 
as needing investment and improvement.100 As a result, there is a reliance on higher quality 
imported processed food products, and agricultural exports have not been able to reach their 
potential. With several government efforts underway to increase agricultural exports, it is important 
that improvements be made in the S PS infrastructure so that these products can find acceptance in 
international markets. According to information of the Ministry of Food, Agriculture and Light 
Industry (MOFALI), Mongolia has 47 companies certified and accredited to export meat and meat 
 
95 WTO documents G/TBT/M/80, 24 April 2020; and G/TBT/M/81, 26 June 2020.  
96 WTO document G/TBT/ENQ/38/Rev.1, 8 July 2011.  
97 WTO ISO Standards Information Gateway. Viewed at: https://tbtcode.iso.org/sites/wto -tbt/list -of-
standardizing -bodies.html . 
98 MASM, Foreign Relations and Cooperation . Viewed at: 
https://masm.gov.mn/masmj/%d0%b3%d1%85%d1%85%d0%b0/ . 
99 Asian Development Bank (ADB), ADB Supports Mongolia's Drive to Boost Food Safety, Exports , 
13 November 2015. Viewed at: https://www.adb.org/news/adb -supports -mongolia -s-drive-boost -food-safety -
exports . 
100 Central Asia Regional Economic Cooperation (CAREC)/ADB, Modernizing Sanitary and Phytosani tary 
Measures in CAREC: An Assessment and the Way Forward , May 2019. CAREC. Viewed at: 
https://www.adb.org/sites/default/files/publicati on/506151/modernizing -sanitary -phytosanitary -carec.pdf ; and 
Export.gov, Mongolia – Agricultural Sector . Viewed at: https://www.export.gov/apex/article2?id=Mongolia -
Agricul tural-Sector . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 72 - 
 
  products to China and 27 to the EAEU market.101 Another impediment to trade has been the reported 
lack of quarantine facilities at the border.  
3.3.3.1   Policy  
3.104.   Similar to the situation with standards, Mongolia has a number of provisions in the Action 
Plan of the Governm ent for 2016-20 aimed at further developing the SPS infrastructure and directing 
its policy. These include:  
• establishing an integrated registration and electronic information system for food safety;  
• creating conditions that allow citizens to consume health y and safe food and improving food 
safety through the establishment of food preparation, processing, storage, transportation, 
and sales systems;  
• registering livestock, improving quality and standards in the preparation of raw products, 
and introducing an a nimal husbandry origin system;  
• bringing the current veterinary structure up to international standards, ensuring its 
expeditious and integrated action, taking actions to prevent contagious and zoonotic 
diseases and implementing a strategy to control and fi ght these risks at border points, and 
enhancing possibilities to export raw materials and products originating from livestock; and  
• ensuring the supply of healthy and safe food products to the population.102 
3.105.   Several programmes were adopted during the review  period that seek to improve the health 
of humans, plants, or animals, often emanating from the Action Plan  of the Government . They 
include the Mongol ian Export Program of 2018, the Healthy Food -Healthy Mongolia Program of 2019, 
the National Animal Health Program of 2018, and the National Vegetable Program of 2017.103 The 
National Animal Health Program 2018 is particularly concerned with the increase of highly contagious 
animal diseases, and aims to prevent and reduce the risks by implementing long -term miti gation 
strategies and improving compliance of the veterinary system with international standards.104 It had 
also planned to improve the legal environment of the veterinary sector, which was achieved with 
the approval of the Law on Animal Health and the Law on Animal Genetic Resources in 2017. The 
MOFALI is the main administrative organization responsible for developing and implementing 
government strategies and policies on SPS measures.  
3.106.   At the beginning of the review period, Mongolia put in place the Nationa l Food Security 
Program, which ran from 2009 to 2016. As part of the Comprehensive National Development Policy, 
Mongolia established the Program to improve the sanitary and health aspects of the food supply. 
With relatively little industrial domestic food output, the Program recognized that the majority of the 
consumption avoided veterinary, sanitary, and phytosanitary controls. As such, it set out to improve 
food security legislation, improve monitoring and surveillance to ensure food hygiene, and stabiliz e 
the food supply.105 The Program was deemed successful, as it achieved many of its goals, including 
approving 15 new legal acts, establishing a number of good practices, and introducing a n HACCP 
system regarding food production . 
3.3.3.2   Framework  
3.107.   The basic legal infrastructure on SPS  measures remained largely unchanged during the 
review period, although a number of laws were amended. While there were some improvements, a 
number of areas with shortfalls regarding alignment of laws with the WTO SPS  Agreement or related 
international agr eements or standards remain. For example, Mongolia's laws have not incorporated 
 
101 MOFALI, Export/Import of Food Raw Materials . Viewed at: https://mofa.gov.mn/exp/blog/10/253 . 
102 Ministry of Finance, Action Program of the Government of Mongolia for 2016 -20. Viewed at: 
http://www.mfa.gov.mn/wp -content/uploads/2015/06/2016 -2020_Gov_AP_Eng_Revised.pdf.  
103 MOFALI, National Programs . Viewed at:  https://mofa.gov.mn/exp/blog/15/28 . 
104 Legalinfo, National Animal Health Program, Ann ex to Government Resolution No. 12 of 2018 . Viewed 
at: https://www.legalinfo.mn/annex/details/8304?lawid=13230 . 
105 For the full list of objectives, see Legalinfo, National Food Security  Program, Appendix to Resolution 
No. 32 , 4 February 2009. Viewed at: https://www.legalinfo.mn/annex/details/2477?lawid=5415 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 73 - 
 
  any of the International Plant Protection Convention's (IPPC) 1997 International Standards for 
Phytosanitary Measures (ISPMs). Regarding food safety, discrepancies in definitio ns between the 
food laws and the Codex were identified, as well as a lack of a risk -based assessment.106 
3.108.   The main laws regarding the SPS sector include the Law on Quarantine and Inspection for 
Transferring of Animals, Plants, Raw Materials and Products of t heir Origin through the State Border, 
the Law on Animal Health, the Law on Plant Protection, and the Law for Ensuring Safety of Food 
Products (Table 3. 22). Most of these laws underwent revisions, albeit minor ones, and thus the main 
elements remain intact.  
3.109.   The Law on Quarantine and Inspection for Transferring of Animals, Plants, Raw Materials 
and Products of their Origin through the State Border remains the main law regulating SPS trade 
and border matters. It provides for the issuance of import and export c ertificates, quarantine control 
and inspection, risk analysis, and the determination of permissible risks. It was amended in 2018 to 
include specifications on the performance of risk analysis.107 
3.110.   The Food Law, 2012, and the Law for Ensuring Safety of Food P roducts (Food Safety Law), 
2012, form the basic framework regarding food safety. The Food Law requires that importers and 
exporters of food be registered legal entities in Mongolia; that imported food be from an enterprise 
that is certified as using good p ractices or adhering to the HACCP system; that imported food made 
from GMOs is prohibited unless registered accordingly; and that at least two thirds of the shelf life 
of imported food remains valid. The Food Safety Law prescribes methods and forms of ensu ring 
safety in the food chain, such as implementing a n HACCP monitoring system, adhering to Good 
Hygiene Practices or Good Agricultural Practices, and ensuring proper production practices in all 
stages of production. The Food Law also provided for the Nati onal Food Safety Council, which was 
set up in 2013, and is responsible for taking urgent measures in the case of risks to human health 
or food safety, overseeing research on food -borne diseases, and examining the current status of 
domestic food security.108 
3.111.   A number of government resolutions also form the SPS legal structure and support the 
implementation of the laws. For example, there are a list of diseases subject to quarantine, a list of 
highly contagious and infectious diseases, measures to establish qu arantine -free zones, and 
procedures to be followed in the case of plant quarantine.109 Further, a resolution based on the Law 
on Quarantine and Inspection for Transferring of Animals, Plants, Raw Materials and Products of 
their Origin through the State Bord er restricts the import or export of plant seeds, seedlings, 
breeding animals, and raw meat through certain border crossings.110 
Table 3.22 Main laws or resolutions on SPS measures, 2020  
Law/resolution  Summary  Reference  
Law on Quarantine and 
Inspection for Transferring 
of Animals, Plants, Raw 
Materials and Products of 
their Origin through the 
State Border  Regulates veterinary and plant quarantine 
control and inspection for products that cross 
international  borders  28 November 2002  
https://www.legalinfo.mn/law/
details/38   
Law on Animal Health  Regulates the protection of animal healt h by 
ensuring hygiene and sanitation requirements  8 December 2017  
https://www.legalinfo.mn/law/
details/13026   
 
106 CAREC/ADB, Modernizing Sanitary and Phytosanitary Measures in CAREC: An Assessment and the 
Way Forward , May 2019. Viewed at: https://www.adb.org/sites/default/files/publica tion/506151/modernizing -
sanitary -phytosanitary -carec.pdf . 
107 Legalinfo, Amendments to the Law on Quarantine and Inspection for Transferring of Animals, Plants, 
Raw Materials and Products of their Origin through the State Border , 15 November 2018. Viewed at:  
https://www.legalinfo.mn/additional/details/3430?lawid=38 . 
108 Legalinfo, Annex 1 to Government Resolution No. 78 on Rules of the National Food Safety Council , 
2 March 2013. Viewed at : https://www.legalinfo.mn/annex/details/5797?lawid=9091 . 
109 MOFALI, Government resolutions . Viewed at: https://mofa.gov.mn/exp/blog/15 /97. 
110 Legalinfo, Government Resolution No. 22 on the Introduction of Plant Seeds, Seedlings, Plants, 
Breeding Livestock, Raw Meat and Extra Products , 27 January 2010. Viewed at: 
https:// www.legalinfo.mn/law/details/4561?lawid=4561 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 74 - 
 
  Law/resolution  Summary  Reference  
Law on Plant Protection 
(Revised)  Regulates the protection, control, and 
quarantine of plants from plant diseases, pests, 
etc.  15 November 2007  
https://www.legalinfo.mn/law/
details/517   
Law on Fortified Food  For the compulsory indu strial fortification with 
vitamins and minerals of certain types of food, 
including the import, production, export, and 
control of the concentration  3 May 2018  
https://www.legalinfo.mn/law/
details/ 13353  
Food Law (Revised)  Regulates accessible, quality, nutritious, and 
safe food  20 December 2012  
https://www.legalinfo.mn/law/
details/8912   
Law for Ensuring Safety of 
Food Products  Ensures the s afety of food raw materials and 
products at all stages of the food chain  20 December 2012  
https://www.legalinfo.mn/law/
details/8911   
Law on Organic Food  Regulates organic agricultural production, 
certification, sale, import, use, and use of 
symbols  7 April 2016  
https://www.legalinfo.mn/law/
details/11884   
Law on Animal Genetic 
Resources  Regulates registration, identification, 
preservation, protection, and sustainable use of 
genetic resources from livestock and domestic 
animals  14 December 2017  
https://www.legalinfo.mn/law/
details/13051   
Resolution on Approval of 
Procedur es – National 
Food Safety Reference 
Laboratory Procedure; 
Risk Assessment 
Procedures  Reorganizes the central laboratory; establishes 
responsibilities of the National Food Safety 
Reference Laboratory; provides for the 
management of the database on food safety 
indicators; institutes procedures for the risk 
assessment team  5 October 2013  
https://www.legalinfo.mn/law/
details/9507   
Resolution on Procedure 
for Pre -shipment 
Inspection for Imports of 
High-risk Food  Regulates importation of high -risk food items  12 October 2013  
https://www.legalinfo.mn/law/
details/9477   
Source:  Compiled by the Secretariat from the sources indicated in the table.  
3.112.   The competent authorities for SPS inspection, laboratory tests, and enforcement are the 
GASI and the GAVS. The GASI is responsible for the inspection of imported and exported foods and 
products of plant or animal origin, and for ensuring their compliance wi th standards. The GAVS is 
responsible for animal health and disease control, including responses to disease outbreaks. It also 
ensures food safety through the inspection of imports and exports of animals and animal products, 
in conjunction with other relev ant agencies. The MOFALI, the Ministry of Labour and Social Welfare, 
and the Ministry of Health contribute by defining parameters of food safety for human and animal 
health. As a result of the new Law on Animal Health, the functions of the GASI and the GAV S 
changed. Inspection activities are now carried out through both GASI and GAVS central and local 
specialized inspection organizations. These organizations have the authority to issue import and 
export certificates and the International Veterinary Certific ates, monitor veterinary services, and 
prohibit the supply of infected food and animals that pose a risk.  Plant-based products remain under 
the inspection purview of the GASI. The Department of the Export and Import Border Inspection 
continues to operate u nder the GASI.  
3.113.   The National Reference Laboratory for Food Safety was established in 2013, and achieved 
international accreditation pursuant to ISO standard 17025:2007; it has specialized reference 
expertise to assess biological risks, toxic chemicals, products derived from GMOs, food additives, 
veterinary drugs, and pesticide residues.111 Its responsibilities include assessing risks related to food 
safety, coordinating with relevant national and regional bodies, providing support for the 
accre ditation of food laboratories, and providing a final validation of results of other accredited 
laboratories. The Central State Veterinary and Sanitary Laboratory was established for animal 
health; it is responsible for detecting, diagnosing, and confirming  highly contagious, infectious, 
parasitic, non -infectious, and toxic animal diseases in the territory of Mongolia. By 2020, 
66 laboratories were accredited for food testing.112 
 
111 Legalinfo, Government Resolution No. 330 on Approval of Procedure , 5 October 2013. Viewed at: 
https://www.legalinfo.mn/law/details/9507?law id=9507 . 
112 MOFALI, Monitoring and Evaluation Report  of the National Food Security Program. Viewed at: 
https://mofa.gov.mn/exp/ckfinder/userfiles/files/2016huns.pdf . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 75 - 
 
  3.3.3.3   Technical assistance, WTO, and international cooperation  
3.114.   Mongolia is being aided  by an ADB loan to upgrade and improve its SPS regime. In particular, 
it aims to upgrade laboratories, inspection, and quarantine facilities; establish an SPS Information 
Management System; and align SPS controls and inspections with international standard s. The 
programme timeframe is 2015 -21, and is therefore still ongoing, but several goals have been 
achieved thus far. Mongolia also benefitted from a number of technical assistance activities from 
other WTO Member donors in recent years, as announced in th e WTO SPS Committee.113 
3.115.   According to the authorities, Mongolia has been actively participating in the three 
standards -setting bodies recognized by the WTO: the OIE, Codex, and the IPPC. Furthermore, it 
plans to increase the number of adopted international s tandards of Codex for food safety, of the OIE 
for animal health, and of the IPPC for plant health.  
3.116.   Mongolia maintains three enquiry points pursuant to the WTO SPS Agreement provisions, 
for food safety, animal health, and plant health. The main national not ification authority is the Food 
Division of the MOFALI.114 During the review period, no STCs were raised regarding Mongolia, nor 
did it raise any. Mongolia did not make any notifications of SPS measures to the WTO SPS Committee 
during the review period; it has made only two notifications to date (more than 15 years ago, on 
chicken and food/food additives/food packaging).115 
3.3.4   Competition policy and price controls  
3.117.   The main legislation concerning competition policy is t he Competition Law, which was first 
adopted in 1993, and was subsequently amended, including most recently in 2019. The Law seeks 
to ensure fair competition, establishes the legal and organizational basis  for the prohibition and 
prevention of any activities impeding competition, and addresses the issue of implementation of the 
Law. According to Article 2 of the Law, other relevant legislation on competition includes the 
Constitution, the Civil Code, and ot her related laws. The Law binds both private and state entities, 
unless activities are related to government assistance in case of natural disasters and other 
emergencies.  
3.118.   The Authority for Fair Competition and Consumer Protection (AFCCP) was established i n 
2004 in accordance with Government Decree No. 222. It is designated as the sole body permitted 
to investigate alleged anti -competitive practices. The AFCCP is responsible for the enforcement of 
the Competition Law and other related legislation, including  the Law on Consumer Protection, the 
Law on Advertisement, the Law on Elections, the Law of Mongolian Language, the Public Procurement 
Law of Mongolia116, the Law on Infringement, and the Law on Infringement Procedure. The AFCCP 
is headed by the Deputy Prim e Minister,  and has 36 staff, 7 of whom are competition -enforcing 
officers.  
3.119.   The AFCCP is also responsible for the regulation of prices of natural monopolies (Article  6 of 
the Competition Law).  According to Article  5.1 of the Competition Law of Mongolia, a business entity 
is considered to have a natural monopoly where the average social cost is the lowest when only one 
entity supplies a certain product to the market.  Natural monopoly enterprises are operating in 
sectors such as transport, services, electrici ty, heat ing, communications, and asphalt roads. As at 
March 2021, there were no natural monopoly entities in the sectors of finance, fuel and oil products, 
shopping centres , and coal sectors .117 It is noted that many of these are also state -owned enterprise s 
(Table 3. 23). The Competition Law specifies in Art icle 6.1 that the AFCCP administers activities of 
 
113 WTO documen ts G/SPS/GEN/1139, 13 March 2012, and addenda, G/SPS/GEN/1160, 29 June 2012, 
and addenda, and G/SPS/GEN/181, 15 June 2000, and addenda.  
114 WTO, SPS Information Management System (IMS). Viewed at: 
http://spsims.wto.org/en/EnquiryPointsNotificationAuthorities/Search?countryCode=C496&filter= . 
115 WTO, SPS IMS. Viewed at: 
http://spsims.wto.org/en/Notifications/Search?DoSearch=True&NotifyingMember=Mongolia&NotificationFormat
s=1&NotificationFormats=7&NotificationFormats=200&NotificationFormats=201&NotificationFormats=202&Noti
ficationFormats=203&NotificationFormats=8&Notificat ionFormats=9&DisplayChildren=true . 
116 Both the AFCCP and the Ministry of Finance/State Central Administration Body for Budgetary Issues 
have a potential role in addressing complaints of business entities regarding public procurement; this depends 
on whether  the complaint is made before or after the opening of the bidding process.  
117 Regulatory Agency of the Government of Mongolia, Authority for Fair Competition and Consumer 
Protection of Mongolia, List of Natural Monopolies . Viewed at: https://afccp.gov.mn/da shboard.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 76 - 
 
  natural monopoly enterprises including the granting permissions for any changes in the sales prices 
depending on the actual costs.  
3.120.   According to Article  15.1.7 of the Competition Law, the AFCCP can submit proposals to higher 
government bodies or the administrative court to set aside decisions of public administration, local 
self-government, and local administrative organizations that are in violation of this  Law. 
Furthermore, the AFCCP performs market studies, which may include an opinion or recommendation 
regarding anti -competitive matters. It also has the mandate to conduct competition advocacy. In 
terms of policy, the AFCCP has a strategic plan for 2018 -20 that guides its work, and it has developed 
a national programme on promoting and maintaining market competition.  
3.121.   Regarding international cooperation, the AFCCP is a member of the International 
Competition Network, which allows it to reach out to other com petition authorities to address 
concerns. Mongolia also has memoranda of understanding (MOU) on competition matters with Inner 
Mongolia, China, the Japan Fair Trade Commission, Indonesia's Komisi Pengawas Persaingan Usaha, 
the Federal Antimonopoly Service of the Russian Federation, and the Turkish Competition Authority.  
3.3.5   State trading, state -owned enterprises (SOEs), and privatization  
3.122.   State ownership of companies continues to be prevalent despite a number of privatization 
initiatives over the years. More re cently, emphasis has been placed on improving the regulatory and 
legal framework of the sector, and improving public sector management and governance.118 This 
includes the separation of the Government's role of as regulator from that of owner -investor, 
although the parameters of how this works are unclear at this time. Mongolia continued with both 
privatization and nationalization of enterprises during the  review period. In 2017, four companies 
were privatized. The Government also purchased 10.3 million shares (40% of the total) of the 
Mongolian Telecommunication JSC from the Korea Telecom Corporation. As part of the Action Plan 
of the Government for 2016-20, Mongolia emphasized transparency in the policy of property 
privatization, improved the governance of state and rural properties, and developed a partnership 
between the State and the private sector.  
3.123.   The Parliament approves privatization plans based on r ecommendations of the Government; 
during the review period, one plan was approved for the period 2015 -16. The  Guidelines for 
Privatization and Reorganization of State Property in 2015 -16 and a list of SOEs to be partially 
privatized were issued in 2015. Th ey specified the reorganization or privatization of 20 SOEs, and 
the methodology to do so.119 This was later amended in 2015 and 2016 with respect to the number 
of entities and/or methodology; thus, ultimately, not all entities were privatized. Often the gu idelines 
are amended, cancelled, or not fully implemented, and therefore they remain in place after the initial 
dates specified.  In 2018, Parliament was set to consider the Draft Guidelines for Privatization and 
Reorganization of State Property in 2018 -20, which specified the privatization or reorganization of 
27 SOEs ; however, it was not approved.120  
3.124.   During the early part of the review period, the State Property Committee (SPC) was the 
government agency in charge of general oversight of SOEs. It was responsible for monitoring and 
implementing the state property legislation, initiating privatization policies and programs, providing 
instructions for the evaluation of state properties, and leasing state property. However, in 2016,  
pursuant to a governmen t resolution, the Government Implementing Agency for Policy Coordination 
on State Property (PCSP) was created to manage state -owned assets of enterprises under the central 
Government, essentially taking over the functions of the previous SPC.121  
 
118 ADB, Sector Assessment (Summary): Public Sector Management (Reforms of State -Owned 
Enterprises) . Viewed at: https://www.adb.org/sites/default/files/linke d-documents/49409 -001-ssa.pdf . 
119 Legalinfo, Parliament Resolution No. 70 on Approval of Guidelines for Privatization and 
Reorganization of State Property in 2015 -2016, 3 July 2015. Viewed at: 
https://www.legalinfo.mn/law/details/11232 . 
120 MNB, Discussion of the Concept of the Draft Resolution of the State Great Hural on "Approval of the 
Guidelines for Privatization of State Property in 2018 -2020" Has Started . Viewed at: 
http://www.mnb.mn/i/144975 . 
121 Legalinfo, Government Resolution No. 4 on Some Measures to be Taken about Government Agencies , 
27 July 2016. Viewed at: https://www.legalinfo. mn/law/details/12061?lawid=12061 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 77 - 
 
  3.125.   The main l aw governing state enterprises remains the Law on State and Local Property, 
1996, which was amended several times during the review period.122 It defines an SOE as an 
enterprise with state -owned shares that is financed from the state budget. The other main elements 
of the Law include the procedures for the acquisition, transfer, or sale of state property; the 
management of state property; the role and powers of the state administrative body in charge of 
the state property; the privatization programme and met hods; and social sector reform matters.  
3.126.   State -owned companies take several forms including SOEs, limited liability companies 
(LLCs), and joint -stock companies (JSCs). As at July 2020, there were 105  state-owned companies 
in Mongolia; a significant number o f which were concentrated in the energy, mining, and transport 
sectors (Table  3.23). The majority of enterprises were under the supervision of the PCSP, six were 
under the supervision of the Ministry of Finance, and 15 were part of Erdenes Mongol LLC. Duri ng 
the review period, Erdenes Mongol LLC was further developed as a holding company  SOE that 
controls and focuses on providing an integrated strategy and management for its subsidiaries, 
associates, joint companies, and projects.123 Initially, it controlled  four mining companies, but it 
expanded to control a number of other enterprises in other sectors, such as oil and gas, hospitality, 
road maintenance, and finance.124 It was valued at MNT 11.8 trillion at the end of 2018, and, in 
2019, profits grew signific antly to MNT 13.6 billion; this was attributed to the growth of the 
Mongolian economy and the increase in coal prices.125 
3.127.   According to the authorities, Mongolia does not maintain any state trading entities pursuant 
to the provisions of Article XVII of the G ATT 1994 or the WTO Understanding on the Interpretation 
of Article  XVII. However, the AFCCP designates natural or permitted monopolies, several of which 
operate with exclusivity in several import or export markets, e.g. the import or export of coking 
coal, sugar, baby formula, gasoline, jet fuel, soap, and sanitary ware.126 
Table 3.23 State -owned companies, by sector, 2020  
Company  Percentage of state 
ownership  
Mining  
Erdenet Mining Corporation SOE  100 
Mongolrostsvetmet SOE  100 
Central Geological Laboratory SOE  100 
Geological Research Center SOE  100 
Erdenes Mongol LLC  100 
Erdenes Tavan Tolgoi JSC  100 
Baganuur JSC  75 
Shivee -Ovoo JSC  90 
Tavan Tolgoi Fuel LLC  100 
Mongolian Oil Refinery SOE  100 
Oyu Tolgoi JSC  34 
Erdenes Ashid LLC  34 
Erdenes Steel LLC  50 
Germon Gas LLC  51 
Erdenes MGL LLC  100 
Erdenes Oyu Tolgoi LLC  100 
Mon-Atom LLC  100 
Erdenes Gold Resources LLC  100 
Erdenes Silver Resources LLC  100 
Erdenes Methane LLC  100 
Energy  
Thermal Power Plant -2 JSC  100 
 
122 Legalinfo, Law on State and Local Property , 27 May 1996. Viewed at: 
https://www.legalinfo.mn/law/details/492?lawid=492 . 
123 Erdenes Mongol LLC is the hold ing company of the following SOEs: Erdenes Tavan Tolgoi JSC, 
Baganuur JSC, Shivee -Ovoo JSC, Erdenes Oyu Tolgoi LLC, Erdenes Gold Resource LLC, Erdenes Silver Resource 
LLC, Erdenes Asset Management LLC, Erdenes Shivee Energy LLC, Mon -Atom LLC, Gashuun Sukha it Road LLC, 
Erdenes Methane LLC, Erdenes Ashid LLC, Erdenes Steel LLC, Erdenes Commodity Exchange LLC, Erdenes Rare 
Earth Elements R&D Unit, and Shivee Energy Complex Project of Energy Export.  
124 Natural Resource Governance Institute, What Does Edenes Mongol Do and Is It Profitable?  Viewed 
at: https://resourcegovernance .org/sites/default/files/documents/what -does-erdenes -mongol -do-and-is-it-
profitable.pdf . 
125 Information provided by the authorities.  
126 AFCCP. " List of Natural or Permitted Monopolies."  Viewed at: https://afccp.gov.mn/.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 78 - 
 
  Company  Percentage of state 
ownership  
Thermal Power Plant -3 JSC  100 
Thermal Power Plant -4 JSC  100 
Darkhan TPP JSC  100 
Erdenet TPP JSC  100 
Ulaanbaatar Electricity Distribution Network JSC  100 
Ulaanbaatar Heating Network JSC  100 
National Electricity Transmission Network JSC  100 
Darkhan Heating Network JSC  100 
Erdenet -Bulgan Electricity Distribution Network JSC  100 
Energy System of Dornod Region JSC  100 
Dalanzadgad TPP JSC  100 
Baganuur Southeastern Region Electricity Distribution Network JSC  100 
Western Region Energy System JSC  100 
Nalaikh DS JSC  100 
Southern Region Electricity Distribution Network JSC  100 
Altai-Uliastai Power Plant JSC  100 
Dulaan Shar Gol JSC  100 
Khuvsgul Thermal Power Plant JSC  100 
Institute of Energy Economics SOE  100 
National Center for Renewable Energy SOE  100 
Energy Development Center SOE  100 
Baganuur DS JSC  100 
Erdenes Shivee Energy LLC  50 
Zamiin -Uud DS SOE  100 
Khovd DS JSC  100 
Amgalan DS JSC  100 
Ulaangom DS -2 JSC 100 
Tavan Tolgoi DS LLC  100 
Egiin Gol Hydro Power Plant JSC  100 
National Dispatch Center LLC  100 
Road transport  
MIAT JSC  100 
Mongolian Railway JSC  100 
National Center for Road Transport SOE  100 
Road and Transportation Development Center SOE  100 
Bayanchandmani AZZA JSC  100 
Nalaikh AZZA JSC  100 
Darkhan AZZA JSC  100 
Selenge AZZA JSC  100 
Dornogov AZZA HC  100 
Khushigiin Khundii Airport  LLC 100 
Kharkhorin AZZA JSC  100 
Uvurkhangai AZZA JSC  100 
Arkhangai AZZA JSC  100 
Bulgan AZZA  100 
Orkhon AZZA JSC  100 
Khuvsgul AZZA JSC  100 
Tuv AZZA JSC  100 
Hovd AZZA JSC  100 
Uvs AZZA JSC  100 
Govi-Altai AZZA JSC  100 
Zavkhan AZZA JSC  100 
Erdenesant AZZA JSC  100 
Baganuur AZZA JSC  100 
Hargui JSC  100 
Taliin Zam JSC  100 
New Ulaanbaatar International Airport LLC  49 
Ulaanbaatar Railroad JSC  50 
Avtoimpex JSC  51 
Gashuun Sukhait Road LLC  100 
Communications  
Information and Communication Network LLC  100 
Mongolian Telecommunication JSC  94.67  
Mongol Post JSC  66 
Public service  
Mongolian Film Consolidation SOE  100 
White Falcon SOE under the General Police  100 
Buyant -Ukhaa Sports Palace SOE  100 WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 79 - 
 
  Company  Percentage of state 
ownership  
Sports Training Center state enterprise in Khangal soum of Bulgan aimag  100 
Liquid Fuel Transshipment Facility SOE  100 
Diplomatic Service Agency SOE  100 
National Park of Information Technology  100 
Technical Sports Center SOE  100 
Mongol Us SOE  100 
Resorts  
Tourism Development Center SOE  100 
Mongolian Kuwait Environmental Protection Center SOE  100 
Housing  
Construction and Development Center SOE  100 
State Housing Corporation LLC  100 
Agriculture  
Light Industry Research, Testing and Production Business Corporation SOE  100 
Financial, banking, and stock exchange  
Mongolian Minerals Exchange LLC  100 
Agricultural Exchange LLC  100 
Mongolian Stock Exchange JSC  100 
State Bank  100 
Central Securities Depository LLC  100 
Commercial Settlement LLC  100 
Development Bank LLC  100 
National Reinsurance JSC  100 
Erdenes Asset Management LLC  100 
Source:  PCSP, State and State-owned Companies . Viewed at: http://www.pcsp.gov.mn/# ; and information 
provided by the authorities.  
3.3.6   Government procurement  
3.128.   Mongolia is not a signatory to the WTO plurilateral Agreement on Government Procurement 
(GPA). It has been an observer to the Committee on Government Procurement since 1999, and 
plans to conduct an internal survey regarding whether to join the GPA.  
3.129.   Annual  spending on public procurement was MNT 2,643.0 billion in 2019, up from 
MNT 1,442.1 billion in 2018 (Table 3. 24). Around 87% of government procurement was conducted 
through open bidding in 2019.  
3.130.   Since 2008, the Government has been working to introduce int ernational best practices in 
public procurement by improving its relevant laws and regulations . The Public Procurement Law of 
Mongolia (PPLM),  adopted in 2011 and subsequently amended, regulates all stages of the 
procurement process. The most recent amendm ents entered into force in 2019, and introduced 
significant changes to the public procurement process by: (i) implementing a preconditioned 
procurement procedure127 and a "green procurement" concept128; (ii) clarifying the roles and 
responsibilities of procu rement inspectors; and (iii) providing for an additional condition for forfeiting 
bid securities. The PPLM stipulates four procurement methods: open bidding, price quotations, direct 
contracting, and limited bidding.  
 
127 Under preconditional procurement, a  procuring entity may start conducting a procurement process 
before the necessary funding is approved by Parliament. In such cases, a contract should be awarded only 
after Parliament approves the state budget or ratifies international agreements on obtaini ng loans or grants in 
which such funding is stipulated. A preconditioned procurement procedure is to be adopted by the Ministry of 
Finance.  
128 According to the authorities, the concept of green procurement includes purchasing goods and 
services designed or designated to ensure: (i) the efficient use of energy and natural resources; (ii) the 
sustainability of ecosystem services; and (iii) climate change adaptation.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 80 - 
 
  Table 3.24 Government procurement, based on procurement methods, 2014 -19 
(MNT billion)  
 Open bidding  Price 
quotations  Direct 
contracting  Limited 
bidding  Total  
2014 956.1  60.4 25.4 4.4 1,046.3  
2015 676.2  40.3 140.4  8.3 865.2  
2016 390.1  70.9 145.7  241.4  848.1  
2017 753.2  74.5 65.8 148.8  1,042.3  
2018 1,264.9  102.7  39.2 35.3 1,442.1  
2019 2,300.8  159.6  177.5  5.1 2,643.0  
Source:  Information provided by the authorities.  
3.131.   The PPLM regulates the procurement activities of the central and local governments. Legal 
entities with 50% or more of state or local government participation are considered to be procuring 
entities. The Ministry of Finance is the central public procuremen t agency; it administers the 
government policy and methodology, and oversees procurement. The State Central Administrative 
Body for Budgetary Issues administers the public procurement policy and methodology, and 
oversees compliance. It is also responsible for the organization and implementation of large 
procurement projects. Procuring entities organize the procurement of goods, works, and services 
financed with funds and other resources allocated from the central or local budgets for expenditures 
other than  an investment, and with its own funds.  
3.132.   No data are available regarding foreign suppliers' participation in the public procurement 
market. The 2019 amendment of the PPLM introduced  additional preferences for domestic 
manufacturers. A list of goods to be su pplied only by domestic manufacturers, as proposed by the 
relevant ministry, was issued in the Government Decree No. 336, 2015. Furthermore, the PPLM 
provides for value thresholds for participation of foreign suppliers in public procurement. In 2019, 
27 fo reign suppliers participated in 67 bidding processes, and in 2020, 42 foreign suppliers 
participated in 169 bidding processes.  According to the PPLM, a foreign entity is allowed to submit a 
tender in bidding processes for works with cost estimates of above  MNT 10,000,000,001, and for 
goods and services with cost estimates of above MNT 100,000,001.  
3.133.   As part of the plan to align with best international practices, Mongolia established an 
electronic procurement (e -procurement) system, which facilitates the purc hase and sale of supplies, 
services, and works through the Internet. The e -procurement system (www.tender.gov.mn)  has 
been operational since 2017. The Ministry of Finance  is responsible for administering the 
e-procurement system; publishing public procurem ent plans, reports, bid announcements, and 
results; and implementing contracts (Article  53 of the PPLM). In 2019, the Minister of Finance 
approved the Regulation on Organizing an Online Bidding through Public Procurement Online System 
and Publishing Bid No tices and Results by Decree No. 255, which established rules regarding the 
online bidding process. Around 98% of public procurement is carried out electronically.  
3.3.7   Intellectual property rights  
3.3.7.1   Overview  
3.134.   In 2015, Mongolia adopted the National Strategy for the  Development of Intellectual 
Property. The strategy was implemented between 2015 and 2018. Mongolia received legislative 
assistance in 2017 from WIPO in the area of patent and industrial design rights. Subsequently, 
legislation was drafted to revise existi ng IP laws, namely the Patent Law, the Law on Copyright and 
Related Rights, and the Law on Trade Marks and Geographical Indications. The Patent Law of 25  June 
1993 was amended in September 2016. Parliament adopted the Law on Intellectual Property on 23 
January 2020, and it will enter into force on 1 December 2020. According to the authorities, the Law 
aims to address overlaps, conflicts, and other issues within existing IP laws.  
3.135.   The protection and enforcement of intellectual property rights (IPRs) is regula ted by the 
main IP laws, including the Patent Law (as amended in September 2016), the Law on Trade Marks 
and Geographical Indications (as last amended in June 2010), the Law on Copyright and Related WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 81 - 
 
  Rights (as last amended in January 2006), the Law on Tech nology Transfer (1998), the Law on 
Infringement (2017), and the Customs Law (1996).  
3.136.   In 2019, Mongolia ranked 53rd of 129 countries in the WIPO Global Innovation Index, with 
particular strengths in, for example, knowledge creation, output of intangible asse ts such as 
trademarks and industrial designs, and output of creative goods and services such as national feature 
films. In terms of economic benefit, the Law on Intellectual Property of 23 January 2020 will expand 
the scope of rights for IPR holders, as we ll as state support for the exploitation of IPRs.129 
3.137.   The Intellectual Property Office of Mongolia (IPOM), under the Ministry of Justice and Internal 
Affairs, administers IPRs, enforces IP -related legislation, and settles disputes and grievances. IPOM 
decisi ons may be referred to the courts by the disputing parties.  
3.138.   Table s 3.25 and 3. 26 show recent data on IPR -related applications and registrations, 
respectively.  
Table 3.25 Annual statistics on IPR protection, applications , 2014 -18 
IPR 2014  2015  2016  2017  2018  
 
Resident  Non-
resident  Resident  Non-
resident  Resident  Non-
resident  Resident  Non-
resident  Resident  Non-
resident  
Patents  139 126 109 128 112 107 124 104 82 79 
Trademarks  1,026  2,325  1,197  2,233  1,138  2,076  1,351  2,352  1,431  2,601  
Industrial design  257 201 0 0 127 160 162 149 140 135 
Utility model  190 2 149 0 204 2 255 0 224 0 
Geographical 
indications  5 1 2 0 1 0 1 1 0 1 
Source:  WIPO IP Statistics Data Center, and information provided by the authorities.  
Table 3.26 Annual statistics on IPR protection, registrations , 2013 -19 
 2013  2014  2015  2016  2017  2018  2019  
Patents  203 223 232 158 104 45 177 
Industrial designs  99 80 76 135 101 121 140 
Trademarks  3,147  3,724  3,504  1,118  3,318  3,505  3,929  
Geographical indications  1 4 1 3 2 0 1 
Source:  IPOM data provided by the authorities.  
3.139.   The RTA between Japan and Mongolia entered into force on 7 June 2016. It contains a 
chapter with detailed provisions on IP protection and enforcement.130 For example, Article  12.7 of 
the RTA requires, inter alia , parties to ensure that patent applications are not rejected solely on the 
grounds that the subject matter is  related to a computer programme.  
3.140.   Mongolia has been a member state of WIPO since 1979.131 Table 3. 27 show Mongolia's 
membership in WIPO -administered treaties.  
Table 3.27 Membership in WIPO -administered treaties  
Treaty/Convention  Date  In force  
Convention Establishing the World Intellectual 
Property Organization  Accession: 28 November 1978  28 February 1979  
Madrid Agreement Concerning the International 
Registration of Marks  Accession: 16 January 1985  21 April 1985  
 
129 LehmanLaw Mongolia LLP, Registering Your IP with Mongolia Customs , 9 November 2020. Viewed at: 
http://lehmanlaw.mn/blog/ .  
130 WTO, Regional Trade Agreements Database. Viewed at: 
http://rtais.wto.org/ UI/PublicShowMemberRTAIDCard.aspx?rtaid=835 . 
131 WIPO, Mongolia . Viewed at: https://www.wipo.int/members/en/details.jsp?country_id=117 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 82 - 
 
  Treaty/Convention  Date  In force  
Paris Convention for the Protection of Industrial 
Property  Accession: 16 January 1985  21 April 1985  
Patent Cooperation Treaty  Accession: 17 February 1991  27 May 1991  
Hague Agreement Concerning the International 
Registration of Industrial Designs  Accession: 12 March 1997  12 April 1997  
Berne Convention for the Protection of Literary and 
Artistic Works  Accession: 12 December 1997  12 March 1998  
Locarno Agreement Establishing an International 
Classification for Industrial Designs  Accession: 16 March 2001  16 June 2001  
Protocol Relating to the Madrid Agreement 
Concerning the International Registration of Marks  Ratification: 16 March 2001  16 June 2001  
Nice Agreement Concerning the International 
Classification of Goods and Services for the Purposes 
of the Registration of Marks  Accession: 16 March 2001  16 June 2001  
Strasbourg Agreement Concerning the International 
Patent Classification  Accession: 16 March 2001  16 March  2002 
Nairobi Treaty on the Protection of the Olympic 
Symbol  Accession: 25 July 25 2002  25 August 2002  
WIPO Copyright Treaty  Ratification: 25 July 2002  25 October 2002  
WIPO Performances and Phonograms Treaty  Ratification: 25 July 2002  25 October 2002 
Singapore Treaty on the Law of Trademarks  Accession: 3 December 2010  3 March 2011  
Marrakesh Treaty to Facilitate Access to Published 
Works for Persons Who Are Blind, Visually Impaired 
or Otherwise Print Disabled  Ratification: 23 September 2015  30 September 2016  
Beijing Treaty on Audiovisual Performances  Signature: 26 June 2012  Not yet entered into 
force 
Source:  WIPO. Viewed at: https://www.wipo.int/treaties/en/ShowResults.jsp?country_id=117C .  
3.3.7.2   Copyright and related rights  
3.141.    The Law on Copyright and Related Rights, revised in 2006, regulates matters rela ted to the 
protection of copyright and issues arising in connection with the use of works that are subject to 
copyright. Under the Law on Copyright and Related Rights and the Law on Infringement, pirated 
websites will be taken down by the Communications Re gulatory Commission of Mongolia at the 
request of the IPOM.  
3.142.   Following the ratification and revision of the Law s on Government, Criminal Law, and 
Infringement Law, minor amendments were made to the laws in 2015, 2016, and 2017, respectively. 
After ratifica tion, the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are 
Blind, Visually Impaired or Otherwise Print Disabled entered into force in 2017. Domestic and foreign 
right holders enjoy equal protection and treatment.  
3.3.7.3   Industrial pro perty  
3.3.7.3.1   Overview  
3.143.   The Patent Law of 25 June 1993 (as amended in September 2016) contains provisions on 
the acquisition, maintenance, and protection of inventions, product designs, and utility models. The 
IPOM may grant compulsory licences with respect to a pa tented invention, industrial design, or utility 
model at the request of an interested person in the following cases: (i) if the use is for essential 
social needs, such as food supply or healthcare; (ii) if the patent has not been exploited for a period 
of three years from the date of its granting; or (iii) if the patentee considers a licensee's use to 
constitute unfair competition. The IPOM has not issued any compulsory licences.  
3.144.   The Law on Trade Marks and Geographical Indications (as last amended in June 2 010) 
provides for the acquisition, maintenance, and protection of trademarks, service marks, collective 
marks, certification marks, and geographical indications.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 83 - 
 
  3.145.   Applicants and right holders need to pay service fees as stipulated in the internal rules and  
regulations indicated in the Patent Law and the Law on Trade Marks and Geographical Indications 
(Table 3. 28). 
Table 3.28 Payable fees  
(MNT)  
Item  Application  Transfer of 
right  Address 
change  Re-issue  Issue of patent 
certificate  
Trademark  20,000  10,000  10,000  30,000  15,000  
Utility model  10,000  10,000  10,000  30,000  10,000  
Invention  20,000  10,000  10,000  30,000  15,000  
Industrial design  16,000  10,000  10,000  30,000  15,000  
Source:  IPOM, Service Fees. Viewed at: https://www.ipom.gov.mn/index.php?pid=52&nid=169 . 
3.3.7.3.2   Trademarks and geographical indications  
3.146.    As at 11 August 2016, the WIPO Global Brand Database of trademarks included Mongolian 
trademarks.132 Mongolia's methods of protecting trademark and geographical indications, including 
the examination process, maintenance, and term of protection, remained l argely unchanged since 
the previous Review.133 
3.147.   The EU -Mongolia Partnership and Cooperation Agreement entered into force on 
1 November  2017, and it states, inter alia , that the parties will conclude an agreement on 
geographical indications.134 According to a roadmap published by the European Commission, the 
Agreement would cover EU products in Mongolia and Mongolian products commercialized in the 
European  Union that bear geographical indications.135 As at June 2019, 20 geographical indications 
were registered.136 Regarding the protection of goods with a specific geographical origin, Mongolia, 
as the world's second largest cashmere producer and accounting for approximately 25% of global 
production, pro tects its cashmere's reputation through two certification marks of the Mongolian Fiber 
Mark Society: Pure Mongolian Cashmere and Made With Mongolian Cashmere.137 
3.3.7.3.3   Design protection  
3.148.   Under the Patent Law, product design patents are valid for 10 years after the  application 
filing, and such patents are granted if the design of a product is new, decorative, or unique. The 
examination process shall be completed within 9 months of the filing date; if required, the period 
may extend up to 12 months.  
3.3.7.3.4   Patents  
3.149.   Unchanged  since the previous Review, patent protection is provided for 20 years after the 
application filing, and patents are granted for products and processes that are new, involve an 
inventive step, and are capable of industrial application. The examination proc ess shall be completed 
within 9 months of the filing date; if required, the period may extend up to 12 months.  
3.150.   During the review period, the protection of patents, including the examination process, 
maintenance, and term of protection, remained largely unc hanged.138 Article  29 of the Patent Law 
 
132 WIPO, Mongolian Trademarks Added to the Glob al Brand Database , 11 August 2016. Viewed at: 
https://www.wipo.int/reference/en/branddb/news/2016/news_0006.html .  
133 WTO document WT/TPR/S/297/Rev.1, 12 December 2014.  
134 European Commission, Roadmap,  Food Quality Schemes – EU-Mongolia Agreement on Geographical 
Indications . Viewed at: https://ec.europa.eu/info/law/better -regulation/have -your-say/initiatives/11824 -EU-
Mongolia -agreement -on-protection -of-geographical -indications .  
135 European Commission, Roadmap, Food Quality Schemes – EU-Mongolia Agreement on Geographical 
Indications . Viewed at: https://ec.europa.eu/info/law/better -regulation/have -your-say/initiatives /11824 -EU-
Mongolia -agreement -on-protection -of-geographical -indications .  
136 European Commission, Roadmap, Food Quality Schemes – EU-Mongolia Agreement on Geographical 
Indications . Viewed at: https://ec.europa.eu/info/law/better -regulation/have -your-say/initiatives/11824 -EU-
Mongolia -agreement -on-protection -of-geographical -indications . 
137 WIPO, Case Stud y: Protecting Tradition and Revitalizing a National Brand , 26 September 2012. 
Viewed at: https://www.wipo.int/ipadvantage/en/details.jsp?id=3109 .  
138 WTO document WT/TPR/S/297/Rev.1, 12  December 2014.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 84 - 
 
  on the enforcement of patent legislation and copyright and patent rights was amended in 
December  2015; the revised Patent Law entered into force on 1 September 2016.139 The amendment 
provides for civil and criminal rem edies to enforce IPRs . 
3.3.7.3.5   Utility models  
3.151.   Under the Patent Law, a utility model certificate is valid for seven years from the filing date; 
this duration has remained unchanged since the previous Review. Utility model certificates are 
granted for new technical solutions related to production tools, instruments, and methods that can 
be used in production. Within one month of the filing date of the application, the IPOM shall examine 
whether the application meets the requirements for registration. The IPOM shall i ssue a utility model 
certificate within one month of the date of the examiner's conclusion that it is possible to register as 
a utility model.  
3.3.7.3.6   Plant variety protection  
3.152.   The Law on Crop Varieties and Seeds, as amended in 2011, regulates matters related to 
preserving the crop gene pool, testing and certifying varieties, controlling the quality of varieties 
and seeds, and maintaining and disposing of national crop reserves.  
3.153.   In June 2019, the MOFALI submitted to Parliament a draft Law on Seed and Variety (Draft  
Law).140 In November 2019, the International Union for the Protection of New Varieties of Plants 
(UPOV) decided on the conformity of the relevant parts of the Draft Law with the provisions of the 
UPOV Act, 1991, which would allow Mongolia, once the Law was  in force, to deposit its instrument 
of accession to the Act.141 As at April 2020, Mongolia was in the process of acceding to the Act.142 
3.3.7.4   Enforcement  
3.154.   The Law on Infringement entered into force in 2017. The State Intellectual Property 
Inspectors of the IPOM Enforcement Department are responsible for enforcing IPR -related laws 
under the prosecutor's supervision in accordance with the Law on Infringement and its procedure. 
Since 2013, the Enforcement Department has conducted 1,414 cases and determined 1,23 0 IPR 
infringements (Table 3. 29). 
Table 3.29 IP enforcement statistics, 2013 -19 
Items  2013  2014  2015  2016  2017  2018  2019  
Inspections conducted  202 285 248 214 186 256 291 
Inspections planned  65 5 16 29 6 69 150 
Follow -up of complaints  137 270 232 185 180 147 141 
Follow -up of public media 
information  6 10 12 4 3 1 2 
Entities inspected  142 379 176 86 298 0 98 
Citizens inspected  80 102 242 231 1,718  0 43 
Infringements  188 367 387 428 832 46 41 
Confiscated goods (MNT million)  0.7 20.4 16.5 3.3 3.5 37.0 5.1 
Fines (MNT million)  21.4 6.0 6.3 6.8 6.8 95.7 109.0  
Transferred to police action  0 1 0 0 0 0 0 
Expert opinion  78 115 26 34 18 3 6 
Notification  88 0 0 26 45 36 76 
Acts 21 27 14 39 44 0 0 
Source:  IPOM data, provided by the authorities.  
 
139 WIPO IP Portal, Patent Law of Mongolia of June 25, 1993 (as amended up to September 1, 2016) . 
Viewed at: https://wipolex.wipo.int/en/legislation/details/16223 . 
140 FAO, Aiming for Effective Seed and Variety Management System , 11 June 2019. Viewed at: 
http://www.fao.org/mongolia/news/de tail-events/ar/c/1200186/ . 
141 UPOV, Report of Fifty -third Ordinary Session , UPOV document C/53/15, Geneva, 1 November 2019. 
Viewed at: https://www.upov.int/edocs/mdocs/upov/en/c_53/c_ 53_15.pdf . 
142 UPOV, Status in Relation to the International Union for the Protection of New Varieties of Plants (as 
of April 28, 2020) . Viewed at: https://www.upov.int/export/s ites/upov/members/en/pdf/status.pdf .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 85 - 
 
  4  TRADE POLICIES BY SECTOR  
4.1  Agriculture, Forestry, and Fisheries  
4.1.1   Agriculture  
4.1.  Agriculture remains integral to Mongolia's long -term development strategy and its sustainable 
development goals. Despite the country's challenging environment and short growing season, 
agriculture has long played an important and central part in Mongolia's  economy, employment, 
trade, and identity, as it was traditionally the main economic sector before the discovery of major 
mineral resources. More recently, Mongolia placed further ambitions on agriculture as part of its 
diversification strategy to alleviat e heavy reliance on the mining sector. Agriculture remains the 
second most important sector in the economy after mining.  
4.2.  In 2019, the agricultural sector1 accounted for 10.9% of GDP, a level that declined during the 
review period from 13.4% in 2013.2 Agriculture's contribution to employment has also been 
important historically, and while it stood at 25% in 2019, it declined steadily from 30% in 2013. 
Despi te these slight contractions, agricultural output and exports continued to grow. The 
Government stressed the importance of improving the value added in the sector by increasing 
processing, as opposed to only producing/exporting raw materials. This shift be gan to have an 
impact as output increased and the processed food and cashmere sectors expanded significantly 
(Section 4. 3).  
4.3.  As at 2019, 73.4% of the territory was agricultural land, but most of it was pastures for grazing 
(Chart 4.1).3 Only 1.1 million h ectares, or 1%, is arable land suitable for crop production; most 
arable land is used to produce wheat. According to the Land Law, pastureland is to be used for a 
common purpose pursuant to government regulation. Foreigners, both persons and legal entities , 
may use land for a specific purpose subject to a specific timeframe.4 While abundant, Mongolia's 
pastureland is described as ecologically fragile and subject to environmental degradation. Due to 
Mongolia's climate, agricultural production (both crops an d livestock) can vary significantly year to 
year as a result of droughts, floods, dzud (severe winter), cold, and the growing season. The sector 
faces a number of additional challenges, such as proximity to markets, the compatibility of sanitary 
and veteri nary standards with international standards (Section 3.3.3), lack of access to financing, 
and relatively little use of irrigation.  
Chart 4.1 Agricultural land, 2019  
 
Note:  "Other land" includes land of cities, villages and other settlements, land under roads and networks, 
land with forest and water resources, and land for special needs. "Other agricultural land" includes 
meadows, arable and fallow land, land for agricultural building and structures, and land n.e.s.  
Source:  National Statistics Office of Mongolia, Mongolian Statistical Yearbook, 2019 . 
 
1 Including forestry and fishing, at current prices.  
2 National Statistics Office, Mongolian Statistical Yearbook, 2019 . Viewed at: 
https://1212.mn/BookLibr ary.aspx?category=007 . 
3 National Statistics Office, Mongolian Statistical Yearbook, 2019 . Viewed at: 
https://1212.mn/BookLibrary.aspx?category=007 .  
4 FAO, Mongolia: Prevailing Systems of Land Tenure . Viewed at: http://www.fao.org/gender -landrights -
database/country -profiles/countries -list/land -tenure-and-related -institutions/en/?country_iso3=MNG .  
Chart 4.[MNG]  Agricultural land, 2019
Other land
26.6%Agricultral land
73.4%
Other agricultural land
2.8%Pastures
70.5%
Source: National Statistics Office of Mongolia, Mongolian Statistical Yearbook 2019.Note: "Other land" includes land of cities, villages and other settlements, land under roads 
and networks, land with forest and water resources, and land for special needs.
"other agricultural land" includes meadows, arable and fallow land, land for
agricultural building and structures, and land n.e.s. WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 86 - 
 
  4.1.1.1   Production and trade  
4.4.  Growth in the production of agricultural products continued steadily throughout the review 
period in most categories, but some outpaced o thers (Table 4.1). During the review period, growth 
was particularly strong in the livestock sector, increasing by MNT 2,245 billion (76%), compared 
with crops (MNT 326 billion) (Chart 4.2) (see discussion of livestock in Section 4.1.1.4.2). Mongolia 
is self-sufficient in many agricultural commodities, and thus is a net exporter of many livestock 
products including wool and cashmere, but a net importer of agricultural products overall. Due in 
part to its climatic conditions, Mongolia remains a significant i mporter of fruits and vegetables. In 
recent years, it was also a net importer of dairy products, grains, and sweeteners.5 
4.5.  In terms of crops, a small but steady increase occurred in the number of hectares sown each 
year, from 418,000 hectares to 526,000 he ctares during the review period, an increase of 26%. As 
a result, crop output also generally increased, although some crops fluctuated significantly 
(Table  4.1). However, the land sown is still lower than the peak of about 800,000 hectares in 1990. 
As at 2 019, the main crops in terms of area sown were cereals6 (71%), fodder (8%), and potatoes 
(3%).7 Significant growth was achieved in the production of fodder, which is increasingly needed to 
support livestock, due to the degradation or overuse of pastureland. Crop harvest output and yields 
are largely determined by climate change, i.e. average tempera tures and precipitation during the 
growing season.8 By international standards, crop yields remain low, also due to poor seed quality, 
lack of mechanization, and plant diseases.9 
Chart 4.2 Gross output of li vestock and crops, 2013 -19 
(Billion MNT, at current prices)  
 
Source:  National Statistics Office, Mongolian Statistical Yearbook, 2019 . 
 
5 National Statistics Office, Indicators for Food Security Statistics, 2018 . Viewed at: 
http://1212.mn/B ookLibraryDownload.ashx?url=Food_security_report -2018_en.pdf&ln=Mn .  
6 Mostly wheat.  
7 National Statistics Office, Socio -economic Situation of Mongolia, 2019/12 . Viewed at: 
https://1212.mn/BookLibraryDownload.ashx?url=Bulletin_2019_12_en.pdf&ln=En . 
8 National Statistics Office, Socio -economic Situation of Mongolia, 2019/12 . Viewed at: 
https://1212.mn/BookLibraryDownload.ashx?url=Bulletin_2019_12_en.pdf&ln=En . 
9 Asian Development Bank (ADB), Agriculture Development in the Central Asia Regional Econom ic 
Cooperation Program Member Countries . Viewed at: 
https://www.adb.org/sites/default/files/publication/549916/agriculture -development -carec-countries.pdf .  
01,0002,0003,0004,0005,0006,000
2013 2014 2015 2016 2017 2018 2019Livestock
CropsChart 4.[MNG] Gross output of livestock and crops, 2010 -2019
Source: National Statistics Office of Mongolia, Mongolian Statistical Yearbook 2019.Billion MNT, at current pricesWT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 87 - 
 
  Table 4.1 Production of selected agricultural products, 2013 -19 
  2013  2014  2015  2016  2017  2018  2019  
Potatoes         
Area harvested ('000 ha)  15.5 13.2 12.8 15.0 15.1 12.9 14.9 
Production ('000 tonnes)  191.6  161.5  163.8  165.3  121.8  168.9  192.2  
Cereals         
Area harvested ('000 ha)  293.3  315.0  390.7  377.8  390.9  366.8  369.4  
Production ('000 tonnes)  387.0  518.8  216.3  483.5  238.1  453.8  433.3  
Vegetables         
Area harvested ('000 ha)  8.3 8.7 7.7 9.1 8.4 8.9 8.4 
Production ('000 tonnes)  101.8  104.8  72.3 94.4 82.1 100.7  99.5 
Horses         
Stock ('000 animals)  2,619.4  2,995.8  3,295.3  3,635.5  3,939.8  3,940.1  4,214.8  
Camels         
Stock ('000 animals)  321.5  349.3  368.0  401.3  434.1  459.7  472.4  
Cattle         
Stock ('000 animals)  2,909.5  3,413.9  3,780.4  4,080.9  4,388.5  4,380.9  4,753.2  
Cattle meat ('000 tonnes)  57.7 54.9 93.2 92.4 97.7 126.6  119.4  
Goats         
Stock ('000 animals)  19,227.6  22,008.9  23,592.9  25,574.9  27,346.7  27,124.7  29,261.7  
Cashmere ('000 tonnes)  7.0 7.7 8.9 9.4 10.2 10.9 10.9 
Sheep         
Stock ('000 animals)  20,066.4  23,214.8  24,943.1  27,856.6  30,109.9  30,554.8  32,267.3  
Wool ('000 tonnes)  20.2 22.3 25.8 27.4 30.6 33.0 33.7 
Sheep and goat meat 
('000 tonnes)  155.0  151.8  220.9  193.1  207.5  236.3  264.8  
Fodder ('000 tonnes)  42.6 44.3 49.2 53.4 47.9 123.8  121.1  
Industrial crops ('000 
tonnes)  41.7 52.1 23.1 21.5 13.9 23.9 34.0 
Fruit ('000 tonnes)  1.6 1.2 1.4 1.6 1.5 1.7 1.8 
Milk ('000 tonnes)  667.0  765.4  874.4  891.5  919.5  902.4  1,074.2  
Hides and skins ('000 
tonnes)  11.0 10.2 15.2 14.0 14.5 19.3 19.6 
Source:  National Statistics Office, Mongolian Statistical Yearbook, 2019 .  
4.6.  The main agricultural exports are washed cashmere, horse meat, and other prepared and 
preserved meat (i.e. ham, sausage, jerky, and offal) (Table 4.2). The top trade items remain st able, 
as cashmere continues to be the dominant agricultural export by far. While cashmere grew 
significantly throughout the review period, so did the export of horse meat, from USD 7.6 million in 
2013 to USD 57.7 million in 2019. The main reasons for this growth were: (i) the number of 
producers with approval to export to China increased from 8 to 12; and (ii) the export market 
expanded slightly.  
4.7.  Tobacco products continue to be the main imported product, accounting for USD  61.1 million 
in 2019, followed by processed food preparations, and a number of other processed agricultural 
goods (e.g. chocolate, sugar, bread, beverages, and pasta) (Table 4.2). Despite efforts to process 
more food domestically, imported processed food continued to increase steadily and reached an all -
time high of USD 444 million in 2019.10 
4.8.  Mongolia continues efforts to increase agriculture exports through a number of government 
policies, in particular regarding livestock products. However, this sector faces certain non -tariff 
issues, suc h as the need to meet food quality standards, SPS measures, and preservation during 
transport. While there have been inroads in addressing these issues (Sections 3.3.3 and 4.1.1.4.2), 
the amount of meat exports remains small, except for horse meat. The mil k and dairy sector is 
another area that was identified as having more potential for production and export. The production 
 
10 National Statistics Office, Socio -economic Situation of Mongolia, 2019/12 . Viewed at: 
https://1212.mn/BookLibraryDownload.ashx?url=Bulletin_201 9_12_en.pdf&ln=En . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 88 - 
 
  of milk nearly doubled, but the lack of dairy -processing facilities, the inability to meet food standards, 
and the lack of packaging a nd marketing limit its potential for export.11 
Table 4.2 Main agricultural exports and imports, 2013 -19 
HS code/description   
2013  2014  2015  2016  2017  2018  2019  
Exports          
5102 - Fine or coarse 
animal hair, not carded 
or combed  Value (USD million)  193.9  235.7  212.9  211.8  227.2  281.1  302.8  
Volume ('000 tonnes)  6.5 7.2 7.0 7.8 8.3 9.5 8.8 
0205 - Meat of horse  Value (USD million)  7.6 5.0 7.3 14.4 44.5 65.0 57.7 
Volume ('000 tonnes)  2.6 1.8 3.9 8.0 26.1 32.2 30.8 
1602 - Other prepared 
or preserved meat, 
meat offal or blood  Value (USD million)  0.0 0.1 0.6 1.6 8.5 79.0 50.3 
Volume ('000 tonnes)  0.0 0.0 0.2 0.4 2.8 29.2 18.5 
0204 - Meat of sheep or 
goats, fresh, chilled or 
frozen  Value (USD million)  2.2 0.0 0.1 0.4 8.3 15.6 24.2 
Volume ('000 tonnes)  0.4 0.0 0.0 0.2 2.6 6.1 7.0 
5101 - Wool, not 
carded or combed  Value (USD million)  3.0 9.6 13.9 16.4 20.6 20.2 20.4 
Volume ('000 tonnes)  2.4 7.4 11.5 14.1 16.1 12.2 14.8 
1205 - Rape or colza 
seeds, whether or not 
broken  Value (USD million)  5.1 20.2 19.1 16.3 5.8 8.9 11.7 
Volume ('000 tonnes)  13.7 43.9 43.7 40.6 14.7 23.0 34.1 
0504 - Guts, bladders 
and stomachs of 
animals (other than 
fish) Value (USD million)  11.7 8.0 8.9 6.6 6.4 8.7 8.6 
Volume ('000 tonnes)  0.6 0.4 0.4 0.5 0.5 0.6 0.6 
2302 - Bran, sharps 
and other residues, 
derived from working of 
cereals or of 
leguminous plants  Value (USD million)  3.9 6.7 3.9 2.5 3.1 4.7 3.5 
Volume ('000 tonnes)  32.7 40.3 20.3 23.4 23.4 29.8 24.7 
2402 - Cigars, 
cheroots, cigarillos and 
cigarettes, of tobacco 
or of tobacco 
substitutes  Value (USD million)  8.3 2.7 1.8 2.6 5.8 1.9 3.2 
Volume (million unit)  183.2  64.3 60.1 129.9  190.4  91.3 53.9 
0206 - Edible offal of 
bovine animals, swine, 
sheep, goats, horses, 
asses, mules or hinnies, 
fresh, chilled or frozen  Value (USD million)  1.3 0.2 0.1 0.1 0.2 2.2 2.5 
Volume ('000 tonnes)  0.8 0.2 0.0 0.0 0.1 1.6 2.4 
         
Imports          
2402 - Cigars, cheroots, 
cigarillos and cigarettes, 
of tobacco or of tobacco 
substitutes  Value (USD million)  54.7 51.1 52.2 50.0 57.0 53.7 61.1 
Volume (million unit)  1,948.4  2,042.9  2,026.2  2,247.1  2,918.0  2,550.6  2,905.1  
2106 - Food 
preparations not 
elsewhere specified or 
included  Value (USD million)  42.9 34.8 31.4 33.0 46.2 60.7 59.6 
Volume ('000 tonnes)  7.2 6.1 6.0 4.2 4.4 6.3 5.9 
1806 - Chocolate and 
other food preparations 
containing cocoa  Value (USD million)  59.7 54.9 39.9 38.8 43.5 49.6 51.7 
Volume ('000 tonnes)  15.0 14.2 12.2 11.6 12.9 14.8 15.3 
1905 - Bread, pastry, 
cakes, biscuits and 
other bakers' wares  Value (USD million)  31.7 31.4 26.5 28.4 29.5 34.5 39.4 
Volume ('000 tonnes)  14.7 14.4 13.7 14.7 14.5 17.4 18.8 
0207 - Meat and edible 
offal of the poultry of 
heading 01.05, fresh, 
chilled or frozen  Value (USD million)  15.9 15.5 10.8 12.6 14.8 21.5 24.6 
Volume ('000 tonnes)  9.3 8.9 5.8 7.4 9.4 11.6 13.2 
1006 - Rice Value (USD million)  9.5 14.9 15.8 16.0 20.6 26.1 23.7 
Volume ('000 tonnes)  20.4 29.6 24.5 26.6 34.3 44.1 43.7 
1701 - Cane or beet 
sugar and chemically 
pure sucrose, in solid 
form Value (USD million)  24.9 26.0 19.4 26.4 26.6 31.6 23.1 
Volume ('000 tonnes)  45.8 46.5 40.3 50.9 51.7 67.3 53.2 
1704 - Sugar 
confectionery (including Value (USD million)  31.2 29.9 25.3 24.0 26.9 23.9 23.0 
Volume ('000 tonnes)  11.0 10.9 11.1 11.2 12.3 11.6 11.6 
 
11 FAO, Support to Income Creation in Mongolia (SECIM): Improving Local Dairy Processing through 
Promoting Women . Viewed at: http://www.fao.org/3/ca8770en/ca8770en.pdf .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 89 - 
 
  HS code/description   
2013  2014  2015  2016  2017  2018  2019  
white chocolate), not 
containing cocoa  
1902 - Pasta, such as 
spaghetti, macaroni, 
noodles, lasagne, 
gnocchi; couscous  Value (USD million)  21.6 18.3 16.4 14.5 17.5 21.7 22.7 
Volume ('000 tonnes)  13.7 11.2 11.0 10.2 11.4 12.6 11.9 
2202 - Waters, 
containing added sugar 
or other sweetening 
matter  Value (USD million)  23.0 19.0 14.0 16.4 15.4 18.6 22.5 
Volume ('000 tonnes)  25.4 21.0 15.9 20.3 21.6 23.8 28.6 
Source:  Data provided by the authorities, and UN Comtrade Database.  
4.9.  Mongolia does not have any import or export tariff -rate quotas on agricultural goods, nor does 
it have any such provisions in its WTO schedule. However, it does control a list of 33 "strategic food 
items", mainly meat, milk, and grains, through quotas and allows imports/exports only through 
licences issued by the Ministry of Food, Agriculture and Light Industry ( MOFALI ) (Table 3.14 and 
Section 3.1.5). According to the authorities, the quota levels are set at a level to fill the gap between 
domestic producti on and consumption. Thus, MOFALI determines the quota levels that vary by 
product and amount each year for imports and exports. During the review period, import quotas 
were mainly on beef, milk and wheat; whereas export quotas mainly applied to beef and ho rse 
meat.12 Mongolia also does not have any agricultural special safeguards provision. There is an export 
tax on certain skins of goats (Section 3.2.2), and a number of products are indicated as prohibited 
or restricted in Mongolia's tariff schedule, e.g. poppy seeds, coca leaf, poppy straw, opium, and 
certain alcohols.13 During the review period, tariffs were raised on certain agricultural products, e.g. 
alcohol and tobacco, which in turn increased the peak tariffs and the overall average on agricultural 
goods (Section 3.1.3.1).  
4.1.1.2   Policy and legal framework  
4.10.   The Food and Agriculture Policy, 2015, is the main policy document in the agricultural sector.14 
It came into force on 1 January 2016 and is expected to provide direction and targets for the 
agriculture se ctor through 2025. The policy's aim is to increase the productivity and improve the 
competitiveness of the sector. The policy outlines objectives for the subsectors of agriculture, e.g. 
crops, livestock, etc. (Box 4.1). A number of points relate to trade a nd investment measures. For 
example, Mongolia plans to increase budget and expenditures on agriculture to between 3% and 4% 
of the state budget; protect domestic production through state support and tariff and non -tariff 
regulation; and improve exports of agricultural raw materials and products through a one -stop-shop 
policy.15 The Mongolian Agricultural Commodity Exchange was created in 2013 to provide integrated 
management for agricultural exports. Further, a number of subsectors have separate programmes 
or policies (Table 4.3). Most are focused on improving agricultural output and standards of living. 
Mongolia's previous policy, the National Food Security Program, operated in the early years of the 
review period, but it expired in 2016.  
4.11.   Mongolia also plan s to put more emphasis on agricultural research and extension services. 
This part of its agriculture regime has languished since emerging from a planned economy. To date, 
investment in these services remains low, and there are few links between researchers  and 
producers. As a result, Mongolia has not reached its potential. The plan includes strengthening the 
National Agricultural Extension Cent er (NAEC), developing a national strategic framework, and 
providing more resources.16 In order to enhance its agric ultural research and extension services, the 
integrated Research and Development Center for Food, Agriculture and Light Industry was 
 
12 See specific details on the annual quota products and volumes in section 3.1.5.  
13 HS 12079100, 12113000, 12114000, 13019000, 13021110, 13021120, 2207100 0, 22072090, and 
22089010.  
14 Legalinfo, Parliamentary Resolution No. 104 on Approval of Government Policy on Food and 
Agriculture , 26 November 2015. Viewed at: https://www.legalinfo.mn/law/details/ 11485 .  
15 As at October 2020, the situation was as follows: the increase in budget had not occurred; state 
support consisted of soft loans to the cashmere industry; non -tariff regulations were the technical regulation 
on imports of alcoholic beverages in 2 016 and withdrawal of the technical regulation on exports of skins and 
hides; and the tariff regulation was the increase in tariffs on imports of non -mining products in 2015.  
16 FAO, Mongolia: A Review of the Agricultural Research and Extension System . View ed at: 
http://www.fao.org/3/a -i6571e.pdf .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 90 - 
 
  established under the MOFALI in September 2020 by Government Resolution No. 93. The newly 
established R&D centre integrated  the NAEC and the Institute of Light Industry (ARMONO).  
Table 4.3 Agricultural programmes and policies, 2013 -19 
Programme/Policy  Years in 
operation  Overview  Reference  
First Meat and Milk 
Campaign and Atar-III 
Campaign  2016-20 Stabilize the food supply, decrease 
dependency, and promote food products' 
exports.  http://www.legalinfo.mn/law/details
/12349?lawid=12349   
National Vegetable 
Program  2016-20 Increase household income, reduce 
unemployment and poverty, and improve 
food supply through the increase of 
production of potato and vegetable crops.  http://www .legalinfo.mn/law/details
/12881?lawid=12881   
National Program 
Fruits and Berries  2016-20 Increase the range, quality, and production 
of fruits; and improve competitiveness by 
developing a value chain that meet 
international quality requirements and 
standa rds. http://www.legalinfo.mn/law/details
/12877?lawid=12877   
National Livestock 
Program  2010-21 See Section 4.1.1.4.2.  http://www.legalinfo.mn/law/details
/7039?lawid=7039   
National Animal Health 
Program  2016-20 Implement comprehensive measures to limit 
the causes and conditions of outbreaks and 
spread of hi ghly contagious and infectious 
animal diseases.  http://www.legalinfo.mn/law/details
/13230   
National Water 
Program  2015-21 Improve the industrial and agricultural water 
supply through the constructi on of reservoirs 
and irrigated agriculture, and the 
intensification of groundwater exploration.  http://www.legalinfo.mn/law/details
/7038?lawid=7038   
Policy on Herders  Phase II 
2018-20 Increase herder income and improve living 
standards by increasing production and 
markets for products.  https://mofa.gov.mn/exp/ckfinder/
userfiles/files/malchin2019.pdf   
National Program to 
Support Intensive 
Livestock 
Development  2019-23 Support food and agricultural production, 
regional development, and diversification of 
livestock product ion; stabilize food supply; 
reduce imports of some livestock products; 
and promote exports.  https://www.legalinfo.mn/law/detail
s/13932?lawid=13932   
Sub-Program to 
Support Livestock 
Production  .. Increase herder income and create value 
added by introducing advanced technologies 
and developing export -oriented livestock 
production. Banks to supply loans to herders 
from bank or government funds.  http://www.legalinfo.mn/annex/det
ails/7112?lawid=11733   
Short -term 
Agricultural 
Stabilization Program  2016-17 Provide financial support to citizens and 
business entities for sowing, fertilizers, and 
seed stocks for potato, vegetable, berry, and 
fruit production.  https://www.legalinfo.mn/annex/de
tails/7017?lawid=11577   
Meat Program  2016-17  Improve the meat supply and herder 
incomes, and increase exports of meat and 
meat products.  http://www.legalinfo.mn/annex/det
ails/7027?lawid=11591   
Sea Buckthorn 
Program  2010-16 Cultivate sea buckthorn on up to 20,000 
hectares of land for business and household 
purposes.  http://www.legalinfo.mn/annex/det
ails/2603?lawid=5437   
Cashmere Program  2018-21 See Section 4.1.1.4.1.  http://www.le galinfo.mn/annex/det
ails/8271?lawid=13204   
.. Not available.  
Source:  Compiled from the information in the table.  
4.12.   In 2016, the Government established agricultural free zones to promote exports of agricultural 
products. The Parliament approved the establish ment of the Khalkh gol Agricultural zone by 
Parliamentary Resolution No. 46 of 19 May 2016.17 According to the Resolution, the Government 
approved 500,000 hectares for the Khalkh gol Agricultural zone, which was further established by 
 
17 Legalinfo, Parliamentary Resolution No. 46 on the Establishment of the "Khalkh Gol" National 
Development Zone in Agriculture , 19 May 2016. Viewed at: 
https://www.legalinfo.mn/law/details/11945?lawid=11945 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 91 - 
 
  Government Resolution No. 328 on 16 June 2016.18 Due to land -use conflicts, there are no 
companies operating in th e Zone at this time.  
Box 4.1 Agricultural policy, objectives for the livestock and crop subsectors  
Livestock production  Crop production  
1. Increase productivity of livestock, improve 
economic turnover, develop cattle and sheep 
breeding for meat and increase meat export 
resources;  1. Use agricultural land to full potential and efficiency, 
improve registration and control, develop agricultural 
production in combination with intensive animal 
husbandry;  
2. Establish an optimal system of state regulation that 
supports the development of the livestock sector and 
the role of livestock producers;  2. Improve the use of agricultural land in the central 
zone, and put into circulation fallow land in the 
western and eastern zones;  
3. Improve the system of registration, assessment, 
and use and protection of livestock genetic resources; 
preserve traditional knowledge of animal husbandry;  3. Introduce zero tillage technology for production 
and create conditions to protect agricultural lands 
from wind, water erosion and damage;  
4. Adhere to the appropriate ratio of number, type 
and herd structure of livestock, adapted to climate 
change and related risks;  4. Increase the number of crop rotations, reduce  the 
amount of fallow land, adjust crop rotation based on 
the needs of intensive livestock breeding, food 
production and foreign markets;  
5. Carry out livestock breeding and selection work in 
a scientific manner and in accordance with market 
demand, creat e new breeds adapted to the region, 
use biotechnological achievements to protect the 
gene pool and improve livestock breeding;  5. Introduce economically efficient and soil -fertile 
crops and varieties, meet the needs of certified crops 
for domestic producti on with seeds suitable for the 
soil and climate of the region, and revitalize the 
system of sowing seeds and varieties;  
6. Implement regional strategies for prevention and 
control of infectious animal diseases, improve early 
detection and prompt response of communicable 
diseases, and protect certain regions without 
communicable diseases;  6. Select machinery and tractors with advanced 
technology that does not adversely impact soil 
structure and fertility, establish a stable network of 
maintenance, support d omestic production and 
assembly of some machines, tools and parts;  
7. Establish a system that ensures the efficiency and 
integrity of the veterinary service at all levels in 
accordance with international standards, strengthen 
the capacity of local veterin ary services and increase 
the responsibility of citizens, entities and 
organizations with livestock;  7. Collect surface, rain and snow water, improve the 
use of irrigation, increase the size of irrigated arable 
land; 
8. Introduce advanced forms of veterin ary services in 
accordance with market demand and requirements;  8. Introduce advanced drip and subsoil irrigation 
technology with low water and energy consumption 
for potato, vegetable, fruit and berry cultivation;  
9. Use pastureland under regulations of the state 
authorities, and use agricultural land for the purpose 
of planting fodder for intensive livestock production;  9. Implement comprehensive measures for chemical 
fertilizers and plant protections for plant diseases, 
pests, weeds, rode nts etc.;  
10. Rational use of pastureland and other natural 
resources, improvement of pastureland manage -
ment;  10. Increase the cultivation and variety of fruits and 
berries;  
11. Create economic incentives for the number, type 
and herd structure of lives tock based on pasture 
capacity and condition, rational use, and protection of 
pastures;  11. Increase the types and varieties of cereals, 
legumes and other crops to meet domestic demand; 
develop production of wheat, potatoes, vegetables 
and oilseeds for exp ort orientation;  
12. Expand measures to control rodents and insects 
causing damage to pasture plants using 
environmentally friendly and advanced technologies;  12. Provide fodder to intensive livestock breeding, 
introduce crops with high protein content, a nd create 
a variety of seed stocks; and  
13. Support herders' and citizens' initiatives to 
improve pasture water supply, establish reservoirs, 
and ponds, and use renewable energy;  13. Develop winter and summer greenhouses and 
cellars, increase vegetable cu ltivation, and provide 
the urban population with fresh vegetables 
throughout the year.  
 
18 Legalinfo, Government Resolution No. 328 on the Establishment of the "Khalkh Gol" National 
Development Zone in Agriculture , 13 June 2016. Viewed at: 
https://www.legalinfo.mn/law/details/12023?lawid=12023 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 92 - 
 
  Livestock production  Crop production  
14. Increase the production of animal feed and bio -
fertilizers through the introduction of advanced 
technologies;   
15. Regional development of processing plants and 
workshops;   
16. Coordinate state support for the supply of raw 
materials and products of animal origin; and   
17. Increase the processing of underutilized 
resources, including meat by -products.   
Source:  Legalinfo, Government Resolution No. 104 on Approval of Government Policy on Food and 
Agriculture , 26 November 2015. Viewed at: https://www.legalinfo.mn/law/details/11485 . 
4.13.   Mongolia's legal framework consists of a number of laws or resolution s on agricultural topics 
(Table 4.4). The most relevant law for the sector is the Law on Agriculture, 2016, which classifies 
and designates arable land, identifies state support and financing, outlines rights and responsibilities 
of farmers, and sets out s oil protection measures. There were no major changes to this Law or the 
other main agriculture laws during the review period.  
Table 4.4 Main legislation, 2020  
Legislation  Overview  Reference  
Law on Agriculture  Regulates farming, use of agricultural land, and 
development of livestock production  http://www.legalinfo.mn/l
aw/details/11641?lawid=1
1641  
Plant Protection Act  Regulates relations between the state, citizens, and 
legal entities on protection, control, quarantine, and 
control of crops from plant diseases  http://www.legalinfo.mn/l
aw/details/517?lawid =517   
Seed Insurance Law  Regulates relations between insurance companies 
and citizens, business entities, and organizations for 
compulsory insurance for seed planting  http://www.legalinfo.mn/ l
aw/details/14?lawid=14   
Law on Seed 
Varieties of 
Cultivated Plants  Regulates the safeguarding of the gene pool of 
cultivated plants, testing and certification of 
varieties, and quality control of seeds and varieties  http://www.legalinfo.mn/l
aw/details/471?lawid=471   
Land Law  Regulates possession and use of land by citizens, 
business entities, and organizations  http://www.legalinfo.mn/l
aw/details/216   
Animal Genetic 
Resources Law  Regulates registration, identification, preservation, 
protection, sustainable use, and research of genetic 
resources of livestock a nd domestic animals  http://www.legalinfo.mn/l
aw/details/13051   
Source:  Compiled from the information in the table. For a complete list, see MOFALI. Viewed at: 
https://mofa.gov.mn/exp/blog/15/27 . 
4.14.   In 2013, Mongolia established the Mongolian Agricultural Commodity Exchange, pursuant to 
the Law about Agricultural Com modity and Raw Material Exchange, 2011.19 The exchange was 
established to improve the supply and trade of cashmere, but also to expand to other commodities. 
It is designated as the sole agricultural commodity exchange with the right to organize stock 
excha nge trading of a list of agricultural commodities. The MOFALI is responsible for determining 
the list of goods and raw materials eligible to be traded on the exchange. The exchange allows for 
spot contracts, futures contracts, options, and forward contract s. As at October 2020, the 
commodities traded included wool, cashmere, skins, and hides. In 2018, the Mongolian Agricultural 
Commodity Exchange signed a strategic partnership agreement with China's Bohai Commodity 
Exchange to allow cross -border trading of commodities, thus traders may trade online without being 
present in Mongolia.  
4.1.1.3   Subsidies/support programmes  
4.15.   Mongolia has a number of subsidy schemes or incentive programmes in the agricultural sector 
that increased steadily in recent years, although there a re no precise figures on the level of support. 
 
19 Legalinfo, Law About Agricultural Commodity and Raw Material Exchange , 2 June 2011. Viewed at: 
https://www.legalinfo.mn/law/details/567 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 93 - 
 
  Several Government funds, direct subsidies from the MOFALI, and international donor projects 
comprise the support measures given to the agriculture sector. Numerous subsidy funds or supports 
were active during  the review period, covering various themes. The Agriculture Support Fund and 
the Livestock Protection Fund were the two main funds supporting the sector during the review 
period; in 2020, they were merged into one Agriculture Support Fund (Table 4.5).  
4.16.   Mongolian subsidy measures take various forms, such as price -support mechanisms, soft 
loans, and output -based direct payments. A number of studies examined the various agricultural 
subsidies and suggested that more could be done to use less distorting subsidi zation methods that 
can be harmful to markets.20 Some concrete suggestions include rationalizing the agricultural 
subsidy programmes to help resolve inconsistencies and overlap; as an alternative to subsidization, 
improve research and development, educatio n and training, infrastructure development, and 
inspection and health services; address problems of market structure; and adopt a smart subsidies 
strategy.  
4.17.   A price -support mechanism on wheat has been in place since 2007, with generally increasing 
subsidy l evels each year. Subsidies are paid when wheat is sold to the Crop Fund or domestic flour 
mills. Between 2005 and 2018, the Crop Protection Fund provided MNT 157.4 billion in wheat 
subsidies to 7,500 farmers.21 The price support amounted to approximately U SD 50 to USD 70 per 
tonne (MNT 50,000 to MNT 100,000 per tonne) due to harvesting and financial capacity.22 A similar 
measure applies to herders of sheep and camels, who receive a cash incentive of MNT 1,500 to 
MNT 2,000/kg (depending on quality) when they sell their wool to domestic enterprises. Between 
2011 and 2017, MNT 158.5 billion was dispersed to herders  through this programme.23 Herders who 
delivered raw hides and skins to domestic enterprises for leather processing were likewise eligible 
for a cash incentive of between MNT 3,000 and MNT 15,000 depending on animal size; this amounted 
to MNT 33 billion ov er the period 2013 -16.24 
4.18.   Farm machinery usage and mechanization is also an area recognized as needing 
improvement. Thus, to increase and improve crop mechanization, which is largely outdated or 
underutilized, farmers may obtain machinery through government  purchases through the Crop 
Support Fund, specialized soft loans of export -import banks, or international aid programmes.  
4.19.   Other forms of government support include VAT and duty exemptions on imports of farm 
machinery ( Sections 3.1.3.2 and 3.1.4.1), subsid ization of the construction and renovation of 
irrigation systems (30% subsidized), construction of dams and reservoirs (100% subsidized), and 
training programmes.25 Farmers of crops, also milk and dairy, fruit and berries, fodder, and intensive 
chicken far ming, also receive a 50% reduction on income tax.26 
4.20.   A number of foreign donor projects or development organizations continue to support the 
agricultural sector in various capacities, including the Green Gold  Animal Health project, the 
German -Mongolian Sust ainable Agriculture (Phase II) cooperation project, additional funding for 
agriculture and rural development projects, and the Market and Pastureland Management 
Development Financing project.27 The total costs or loans under these programme are estimated t o 
be around USD 400 million.  
 
20 World Bank, Agriculture in Transition, Agricultural Productivity and Marketing . Viewed at: 
http://documents1.worldbank.org/curated/ar/27778146819556 7857/pdf/101087 -WP-P130366 -PUBLIC -
Box393257B -Agricultural -Productivity -and-Marketing -in-Mongolia -Feb-18-FINAL -with-pictures.pdf ; and World 
Bank, Review, Estimation and Analysis of Agricultural Subsidies in Mongolia . Viewed at: 
http://documents1.worldbank.org/curated/ar/985931468197057985/pdf/101086 -WP-P130366 -PUBLIC -
Box393257B -Review -Estimation -and-Analysis -of-Agricultural -Subsidies -in-Mongolia.pdf .  
21 News.mn, News on Farmers . Viewed at: https://news.mn/r/2196464/ .  
22 Mongolian Farmers Association, Agriculture Mongolia . Viewed at: http://un -
csam.org/ppta/201410wuhan/5MN.pdf .  
23 MOFALI, About the Wool Premium . Viewed at: https://mofa.gov.mn/exp/blog/43/92 . 
24 MOFALI, About the Leather Incentives . Viewed at: https://mofa.gov.mn/exp/blog/43/92 . 
25 Mongolian Farmers Association, Agriculture Mongolia . Viewed at: http:/ /un-
csam.org/ppta/201410wuhan/5MN.pdf . 
26 Ministry of Finance, 2020 Approved Budget . Viewed at: 
https://mof.gov.mn/files/uploads/article/_%D1%82%D3%A9%D1%81% D3%A9%D0%B2_ -_2020.pdf .  
27 Agricultural Value Chain Knowledge Sharing Platform, Projects and Programs . Viewed at: 
http://www.vcmongolia.mn/default.aspx?page=1#collapse40 ; and MOFALI, Foreign Projects . Viewed at: 
https://mofa.gov.mn/exp/blog/15/ 31.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 94 - 
 
  Table 4.5 Main agricultural subsidy funds or supports  
Programme  Amount  Notes  
Livestock Protection Fund  
(replaced by the Agriculture 
Support Fund)  MNT 71.4 billiona The fund was abolished in 2019 by Government 
Resolution No. 179, and was replaced by the 
Agriculture Support Fund in 2020.  
Crop Protection Fund  .. Provides seeds, fuel, herbicide, fertilizer, and 
access to heavy machinery on subsidized credit.  
Merged wit h the Agriculture Support Fund.  
Crop-Production Support Fund 
(integrated into the 
Agriculture Support Fund)  MNT 172 millionb Provides basic support for wheat seed, wheat 
support to flour mills, fuel, fertilizer, and plant 
protection products. Also provides support for 
technological advances, such as mechanical 
equipment, storage silos, and concessional loans.  
Integrated into the Agriculture Support Fund in 
2020 via Government Resolution No. 16, 
8 January 2020.  
Procedure to provide cash 
incentives t o herders and 
livestock owners  MNT 13.7 billionc Incentives, bonuses, or subsidized loans paid from 
the Livestock Protection Fund for the processing of 
hides and skins. The Livestock Protection Fund 
merged with the Agriculture Support Fund via 
Government R esolution No. 16, 8 January 2020.  
Wheat Price Supports  MNT 179.5 billiond Provides prices supports; merged with the Crop 
Protection Fund.  
Fruit and Berry cultivation  .. Farmers can have interest -free loans for 
investments in this sector for up to five years.  
Incentives for Milk and Dairy  MNT 4 billion  Provides incentives to herders to increase milk 
production.  
Sheep and camel wool cash 
incentive  MNT 22.5 billione Cash incentives to herders who sell sheep and 
camel wool to private enterprises.  
Leather Incentives  MNT 12.7 billionf Cash incentives to herders who sell raw hides and 
skins to state -owned processing plants.  
Meat Reserves  MNT 40.5 billiong Government purchases of 14,000 MT to 18,000 MT 
is subsidized at MNT 1,000/kg for storage.  
Staple Food Price Stabilization 
Program  .. The Program has expired.  
.. Not available.  
a 2018 budget.  
b 2021 draft budget.  
c Total estimation 2013 -18. 
d Total estimation since 2010.  
e 2017 annual outlay.  
f 2016 half -year outlay.  
g Total estimation 2013-16. 
Source:  World Bank, Review, Estimation and Analysis of Agricultural Subsidies in Mongolia . Viewed at: 
http://documents1.worldbank.org/curated/ar/985931468197057985/pdf/101086 -WP-P130366 -
PUBLIC -Box393257B -Review -Estimation -and-Analysis -of-Agricultural -Subsidies -in-Mongolia.pdf ; The 
Livestock Protection Fund and the Agriculture Promotion Fund. Viewed at: 
http://khaads.mn/introduction ; The Livestock Conservation Fund. Viewed at: 
http://www.mxc.gov.mn/ ; MOFALI, About the Wool Premiu m and About the Leather Incentives . 
Viewed at: https://mofa.gov.mn/exp/blog/43/92 ; and information provided by the authorities.  
4.21.   In addition to the various funds, the MOFALI provides indirect subsidies to state -owned 
enterprises (SOEs) and private businesses through its annual budget (Table 4.6). These subsidies 
have remained relatively stable during the review period at about MNT 90 billion, with about 
MNT 55 billion provided to the private se ctor and between MNT 30 billion and MNT 40 billion to SOEs. 
The subsidies are mainly paid out for cashmere, milk and dairy, wool, skins and hides, and meat 
and meat production.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 95 - 
 
  Table 4.6 Agricultural subsidies , expenditures, 2013 -19 
(MNT billion)  
 2013  2014  2015  2016  2017  2018a 2019a 
Subsidies to the 
private sector, from 
the MOFALI  52 56.98  52.98  48.72  53.31  54.11  56.11  
Subsidies to SOEs, 
from the MOFALI  .. .. .07 32.62  39.93  .. .. 
Total subsidies  52 56.98   53.05  81.34  93.24  54.11  56.11  
.. Not available.  
a Budgeted.  
Source:  MOFALI, Budget and Financial Reporting . Viewed at: https://mofa.gov.mn/exp/blog/12/29 .  
4.22.   According to its notifications to the WTO, Mongolia indicated that it did not provide any export 
subsidies during the period 2007 -15 and that it had certain development programmes notified under 
domestic support measures during 2014 -15.28 These measures are notified as spe cial and differential 
treatment measures exempt from reduction commitments, and they include the National Program 
to Support Intensive Livestock Development, the National Livestock Program, the Improving Animal 
Breeding Program, and the Crop Production Pro motion Program. In 2014, the total support under 
these programmes was reported as USD 39.7 million, and in 2015, USD 28.5 million.  
4.1.1.4   Key sectors  
4.1.1.4.1   Cashmere  
4.23.   The cashmere sector remains very important, accounting for about 4% of total exports in 
2019. Exports of cashmere climbed steadily during the review period, increasing by over a third 
(Table 4.7). According to the MOFALI, Mongolia produces about 40% of the world's supply of 
cashmere, and is second to China, the world's largest producer.29 In 2019, Mongolia produced 
9,500  tonnes of cashmere.30 
4.24.   The cashmere industrial sector is divided into four subsectors: integrated processing factories, 
simple processing factories, SME knitting factories, and household micro businesses (Box  4.2). The 
sector support ed 10,000 employees in 2019, of which 90% were women, most under the age of 
45.31 In line with promoting more downstream production, the cashmere industry increased capacity 
in recent years in all areas of processing, i.e. washing, separating, spinning, pr oducing textiles, and 
knitting. In 2019, sales reached MNT 1,300 billion.32 
Box 4.2 Cashmere industry structure, 2020  
Integrated processing 
factories  15 companies  52% of total employment in the sector  
Simple pr ocessing 
factories  23 companies  10% of total employment in the sector  
SME knitting factories  59 companies  35% of total employment in the sector  
Household micro 
businesses  150 companies  3% of total employment in the sector  
Source:  MOFALI, Wool and Cashmere Products . Viewed at: https://mofa.gov.mn/exp/blog/11/175 . 
 
28 WTO documents G/AG/N/MNG/9, 4 June 2018; and G/AG/N/MNG/10, 22 February 2019.  
29 MOFALI, Manufacture of Wool and Cashmere Products . Viewed at: 
https://mofa.gov.mn/exp/blog/11/175 .  
30 Mongolian Wool & Cashmere Association, Wool and Cashmere Industry Information . Viewed at: 
http://www.mongoltextile.mn/news/statistic/mn .  
31 MOFALI, Wool and Cashmere Products . Viewed at: https://mofa.gov.mn/exp/blog/11/175 .  
32 MOFALI, Light Industry . Viewed at: 
https://mofa.gov.mn/exp/ckfinder/userfiles/files/hongon20191.pdf .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 96 - 
 
  4.25.   During the review period, a number of Government policies and programmes supported the 
cashmere sector. The principal policy is the Cashmere Program that was put in place by a 
government resolution in 2018; it builds upon prior cashmere programmes.33 The Cashmere 
Program is integrated into Mongolia's Sustainable Development Goals and places an emphasis on 
improving the downstream proce ssing sector, in particular with respect to exports. Together with its 
Action Plan, the Program prescribes that the Development Bank of Mongolia will make loans to 
cashmere enterprises. In 2018, MNT 182.9 billion was allocated in loans, and in 2019, 
MNT 82.9 billion.34 In 2020, MNT 300 billion was allocated to the Program, and it has been credited 
with creating 1,570 jobs. To date, the second phase of the programme has been completed with 
20% of textile processing capacity achieved, a shortfall of the 60% t argeted.35 
4.26.   In 2014, a resolution was passed putting in a place a procedure to support cashmere 
production and increase exports. It provided loans and guarantees to Mongolian majority -owned 
enterprises at preferential rates.36 Under this programme, soft loa ns totalling MNT 29.33 billion were 
provided to seven domestic enterprises.  
4.27.   In January 2020, a new standard on wool and cashmere was initiated by the government and 
came into force that certifies the quality of products bearing the Mongolian Certification Mark.37 It is 
expected to improve product branding and adherence to high quality standards.  
4.28.   Another recent incentive was the 100% exemption until 1 January 2024 from customs duties 
and VAT on imported cashmere, leather, and wool infrastructure goods and equipment for the 
Darkhan -Uul leather and wool complex project, pursuant to two laws passed in August 2020.38 A 
VAT exemption also exists for exports of raw, washed, and combed cashmere and leather 
(Section  3.1.4.1). As part of its  COVID support measures, Mongolia decided to further support the 
cashmere industry by reducing interest rates and offering special loans (Section 3.3.1).  
4.29.   The Government's initiative to establish the Mongolian Agricultural Commodity Exchange in 
2013 was als o a boost to the cashmere industry (Section 4.1.1.2). The Exchange helped establish 
supply chains and facilitate the export of cashmere.  
4.30.   Initiatives to promote the downstream processing sector were successful, with significant 
increases in exports of cashm ere finished goods, which increased 68% since 2013 (Table 4.7). 
However, despite this increase, the export of minimally processed greasy cashmere continued to 
dominate, and it also increased significantly (56%) during the review period, although not to ext ent 
of finished goods growth. The export of semi -processed cashmere declined during the review period. 
Most cashmere, about 70%, is exported to China.  
 
33 Legalinfo, Government Resolution No. 47 on the Approval of the Cashmere Program , 
6 February  2018. Viewed at: https://www.legalinfo.mn/law/details/13204?lawid=13204 .  
34 In 2018, the amoun t was MNT 182.9 billion.  
35 MOFALI, Light Industry . Viewed at: 
https://mofa.gov.mn/exp/ckfinder/userfiles/files/hongon20191.pdf . 
36 Legalinfo, Government Resolution No. 87 About Some Measures to Support Cashmere Production and 
Increase Exports , 21 March 2014. Viewed at: https://www.legalinfo.mn/law/details/9874 . 
37 Order C / 70 of the Director of Standardization and Me trology, 30 December 2019.  
38 Legalinfo, Law on Customs Tax Discount , 28 August 2020. Viewed at: 
https://www.legalinfo.mn/law/details/155 75?lawid=15575&sword=%D0%BD%D0%BE%D0%BE%D0%BB%D1
%83%D1%83%D1%80 ; and Legalinfo, Law on VAT Exemption , 28 August 2020. Viewed at: 
https:/ /www.legalinfo.mn/law/details/15576?lawid=15576&sword=%D0%BD%D0%BE%D0%BE%D0%BB%D1
%83%D1%83%D1%80 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 97 - 
 
  Table 4.7 Cashmere exports, 2013 -19 
(USD '000)   
2013  2014  2015  2016  2017  2018  2019  
Greasy cashmere  191,714.5  232,103.7  211,118.4  209,091.7  223,573.9  277,770.5  298,768.9  
Waste  27.2 33.7 34.8 86.1 118.3  171.9  47.1 
Semi-processed  56,641.7  62,074.4  40,727.7  33,189.1  38,847.6  55,044.5  45,330.9  
Finished goods  33,308.4  32,841.5  32,437.8  34,288.4  42,575.0  43,649.8  55,892.9  
Total  281,691.8  327,053.3  284,318.7  276,655.3  305,114.8  376,636.7  400,039.8  
Source:  Information provided by the authorities; and Mongolian Customs, Statistics on Mongolian Trade in 
Goods, Appendix No. 6 . Viewed at: 
https://www.customs.gov.mn/statistic s/index.php?module=users&cmd=info_st . 
4.1.1.4.2   Livestock  
4.31.   The livestock sector remains important in terms of output, employment, and trade, as it is 
the second largest agricultural export earner after cashmere. It is also important to Mongolia's 
identity and nomadic  lifestyle, so much so that it is inscribed and protected in the Constitution.39 
Pastureland is designated as a collective asset whereby private ownership is prohibited.40 The 
amount of pastureland has slightly declined over the years, due to shifts in cla ssification to urban 
infrastructure, mining, and agricultural crops. Intensified grazing and demand for fodder have also 
increased demand on pastureland.  
4.32.   In 2019, the number of livestock amounted to 70.9 million heads, an increase from 
45.1 million heads i n 2013 (Table 4.1). Livestock comprises horses, cattle, camels, sheep, and goats, 
of which sheep and goats are the most prevalent, accounting for 45.5% and 41.2%, respectively, in 
2019. Growth in nearly all livestock categories was significant during the r eview period, and a record 
number of livestock was reached in 2019 for all livestock categories except camels. Importantly, the 
ratio of goats to total livestock has increased steadily since 1990; this growth is attributed to the 
attractiveness of producin g cashmere due to increasing prices.41 Production increases were met 
mainly with increases in the number of heads and not in productivity increases, which has been a 
concern for the sector, as it retains low productivity in part due to underdeveloped breed ing 
systems.42 The number of herders fluctuated very little over the review period, and remains at 
285,000, the same as in 2013.  
4.33.   The significant increases in the number of livestock have not come without a cost. Increased 
use and pressure on fragile grazi ng lands combined with climate change potentially threaten the 
future of the sector, as desertification and erosion become more prevalent. According to one source, 
the unsustainable and inefficient use of natural resources throughout the supply chain has f urther 
exacerbated the situation.43 On the positive side, improvements were made in tackling infectious 
and parasitic diseases. During the review period, the number of diseased livestock has declined, and 
the use of vaccination and preventative measures ha s increased, demonstrating an improvement in 
the sanitary health of the livestock population.44 Since its establishment in June 2018, the General 
Agency for Veterinary Services (GAVS) has provided integrated management vertically, from state 
to soum level. Despite these advances, foot and mouth disease remains a threat and has been on 
the rise since  2018. As it has spread, particularly in the eastern region of the country, emergency 
 
39 Article  5 of the Constitution states that "Livestock is a national treasure and is under state 
protection".  
40 FAO, Mongolia: Prevailing Systems of Land Tenure . Viewed at: http://www.fao.org/gender -landrights -
database/country -profiles/countries -list/land -tenure-and-related -institutions/en/?country_iso3=MNG . 
41 National Statistics Office, Socio -economic Situation of Mongolia, 2019/12 . Viewed at: 
https://1212.mn/BookLibra ryDownload.ashx?url=Bulletin_2019_12_en.pdf&ln=En . 
42 FAO, Mongolia at a Glance . Viewed at: http://www.fao.org/mongolia/fao -in-mongolia/mongolia -at-a-
glance/en/ . 
43 UN Partn ership for Action on Green Economy (PAGE) and the Environment and Trade Hub of UN 
Environment, Trade and Green Economy in Mongolia . Viewed at: https://www.un -
page.org/files/public/trade_and_green_economy_in_mongolia -technical_report.pdf .  
44 National Statistics Office, Mongolian Statistical Yearbook, 2019 . Viewed at: 
https://1212.mn/BookLi brary.aspx?category=007 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 98 - 
 
  assistance was sought from the FAO and a four -year control strategy has been launched for 2020 -23, 
with a particular focus on improving capacity  building for local veteri narians.45 
4.34.   The National Livestock Program, 2010 -21, remains the main policy document for the sector. 
It was put in place to encourage livestock breeding and promote market developments in line with 
social development trends. The Program is complemented by a number of related livestock 
programmes and policies, such as the National Animal Health Program, the Policy on Herders, and 
the National Program to Support Intensive Livestock Development (Table 4.3). The Government 
continues to emphasize  the sector and promote its further development, including through an 
emphasis on increasing meat exports.  
4.35.   The priorities of the National Livestock Program include:  
• creating a favourable legal, economic, and organizational environment to ensure sustainable  
development and promote good governance;  
• improving livestock breeding in accordance with social needs, productivity, quality, and 
market competitiveness;  
• protecting public health by improving veterinary practices to international standards;  
• developing liv estock breeds adaptable to climate and other ecological changes; and  
• accelerating economic returns by developing the market for livestock and livestock products, 
creating an optimal network for procurement and sales, and providing incentives.46 
4.36.   One recent development in the sector was the establishment of a temporary "one -stop-
service" for meat -exporting companies. This service was developed by the MOFALI to streamline the 
required government paperwork or procedures and reduce the length of time, as it take s more than 
30 days to complete the export requirements.47 The exporting entities take advantage of the 
combined services from the GAVS, the National Emergency Management Agency, the MNCCI , and 
the State Central Veterinary Laboratory in a single stop. The exporters complete the necessary 
documents within 1 or 2 days, which is a significant reduction in the time needed to export.  
4.37.   The livestock sector became increasingly important for international trade. During the review 
period, Mongolia made a significant shift from being a net importer of livestock and livestock 
products to a net exporter (Chart 4.3). This shift moved in parallel with the increased output of 
livestock. The main driver of this growth was the export of horse meat and heat -treated meat 
produc ts, mainly to neighbouring China and the Russian Federation.  
 
45 FAO, Emergency Assistance for the Control of Foot and Mouth Disease in Central and Western Regions 
of Mongolia . Viewed at: http://www.fao.org/3/cb1467en/CB1467EN.pdf .  
46 Legalinfo, State Great Hural Resolution No. 23 on Approval of the "Mongolian Livestock" National 
Program , 20 May 2010. Viewed at: https://www.legalinfo.mn/law/details/7039?lawid=7039 .  
47 MOFALI, Provide One -stop Services to Meat Exporting Companies . Viewed at: 
https://mofa.gov.mn/exp/article/entry/2218 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 99 - 
 
  Chart 4.3 Livestock, 2013 -19 
 
Note:  Trade data on "live animals and products thereof" refer to Section 1 of the HS nomenclature, 
including HS Chapt ers 1 to 5.  
Source:  National Statistics Office, Mongolian Statistical Yearbook, 2019 ; and WTO calculations based on UN 
Comtrade data.  
4.2  Mining and Energy  
4.2.1   Mining  
4.38.   Mining is by far the most strategic sector of the Mongolian economy. In 2019, it accounted 
for 23.2% of GDP, 71.7% of industrial output, 75.8% of FDI, 90.1% of exports, 75% of inward direct 
investment inflows, and 70% of foreign investment stocks.  
4.39.   By contrast, this highly capital -intensive sector represents only about 2% of the total 
employment of th e country (15% if one takes into account indirect employment induced by the 
sector in construction, financial services, transport, and telecommunications).  It contributed 19.8% 
to the state budget in 2013, 18.5% in 2015, 20.9% in 2017, 20.9% in 2018, and 2 2.5% in 2019.  
4.40.   Since mining is a cyclical activity, whose demand and prices are exogeneous, it creates a 
macroeconomic effect of dependency of the whole Mongolian economy on the fluctuations of the 
industry. Hence, the Government endeavours to develop the s ector to maximize mining revenues 
and exports, and to channel those revenues to the development of the country, but also to diversify 
the rest of the economy in order to limit so called "Dutch disease" effects.  
4.41.   This situation is expected to continue. Accor ding to the Asian Development Bank (ADB)48, 
while mineral reserves are still under -explored, notably due to a lack of financing, identified reserves 
place Mongolia among the countries richest in several mineral products (Table 4.8).  
Table 4.8 Estimated mineral reserves and resources, and their global rankings  
Mineral  Unit Reserves and 
resourcesa Global rank  Share of global 
total (%)  
Tungsten  '000 tonnes (tn)  692.2  6 2.6 
Coal Billion tn  33.4 11 2.5 
Uranium  '000 tn  166.6  12 1.1 
Molybdenum  '000 tn  1,554.5  12 1.6 
Copper  Million tn  69.9 14 2.1 
Gold tn 23.9 21 1.1 
Zinc Million tn  4.7 30 0.4 
Iron ore  Billion tn  1.9 33 0.1 
a Some sources, for example, Invest in Mongolia, indicate that probable reserves of coal and iron ore 
are 175 billion tonnes. Viewed at: https://www.invest -mongolia.com/ . 
Source:  Ministry of Mining and Heavy Industry (MMHI); ADB, Mongolia's Economic Prospects , June 2020.  
 
48 ADB, Mongolia's Economic Prospects , June 2020. Viewed at: 
https://www.adb.org/sites/default/files/publication/611416/mongolia -economic -prospects.pdf . 
01,0002,0003,0004,0005,0006,000
020406080100120
2013 2014 2015 2016 2017 2018 2019Exports of live animals and products thereof (USD million)
Imports of live animals and products thereof (USD million)
Gross output (MNT billion)Chart 4.[MNG] Livestock, 2013 -19
USDmillion
Source: National Statistics Office of Mongolia, Mongolian Statistical Yearbook 2019; and WTO calculations based on UNSD 
Comtrade data.MNTbillion
Note: Trade data on "live animals and products thereof" refers to Section 1 of the HS nomenclature,  including HS Chapters 1 to 
5.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 100 - 
 
  4.42.   Table 4.9 describes the evolution in volume of the main mineral products during the review 
period, and shows that production grew notably (and even doubled for go ld) for all products except 
fluorspar concentrate, iron concentrate, and zinc concentrate.  
4.43.   The sector was affected by the fall in demand and in price (except for gold), triggered by the 
effects of the COVID -19 pandemic on the world economy. Production and exports resumed after the 
first confinement.  
Table 4.9 Mining production, 2013 -19 
Mineral 
product  Unit/a  2013  2014  2015  2016  2017  2018  2019  
Coal '000 tn  30,123.3  25,287.8  24,205.9  35,522.3  48,145.1  51,401.3  50,833.7  
Copper 
concentrate  '000 tn  803.0  1,080.4  1,334.7  1,445.1  1,317.6  1,310.8  1,262.4  
Molybdenum 
concentrate  tn 3,732.1  4,054.0  5,207.0  5,174.4  5,759.6  5,486.1  5,302.7  
Gold  kg 8,900.9  11,503.8  14,532.8  18,435.7  19,849.0  20,655.2  16,251.3  
Fluorspar ore  '000 tn  161.7  303.0  183.5  167.7  108.9  101.2  156.1  
Fluorspar 
concentrate  '000 tn  76.4 71.9 47.3 34.1 55.2 80.7 47.5 
Iron ore  '000 tn  5,011.9  6,293.1  4,273.6  4,936.2  7,694.7  6,225.4  8,572.2  
Iron concentrate  '000 tn  6,124.0  3,967.4  1,899.8  2,209.9  3,675.0  3,405.5  3,386.4  
Zinc concentrate  '000 tn  104.1  93.2 89.6 100.2  82.7 87.9 83.1 
Source:  National Statistics Office.  
4.44.   Table 4.10 describes the evolution of foreign investment flows and stocks, both in absolute 
terms and as a proportion of total investment, during the review period. Mining represents more 
than 60% of both flows and stocks of inward FDI. FDI flows are subje ct to large fluctuations, 
depending on the stage of the mining cycle.  
Table 4.10 Total FDI inflows and inward stock in the mining and quarrying sector , 
2014 -19 
(USD million)   
2014  2015  2016  2017  2018  2019  
Inflows  1,271.7  789.7  941.2  1,442.4  2,130.3  2,374.45  
 % of total inflows  63.9 56.6 63.3 69.1 78.1 75.8 
Inward stock  15,419.7  15,360.0  11,518.3  12,825.8  14,566.8  16,232.3  
 % of total inward stock  76.2 74.2 70.8 71.2 72.0 72.8 
Source:  Information provided by the authorities.  
4.45.   Mineral products are by far the main export, although their share in value of total exports 
declined slightly during the review period, from 89.1% in 2013 to 88.6% in 2019. Copper 
concentrate alone represents about 50% of mineral exports in value.  
4.46.   Table 4.11 describes the evolution of the exports of mineral products in value during the 
review period; coal and copper constitute by far the main exports. After a cyclical downturn in 2015, 
those exports are on the rise and, in total, doubled during the review period.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 101 - 
 
  Table 4.11 Exports of the main HS 4 -digit mineral products (HS section 5), 2013 -19 
  
2013  2014  2015  2016  2017  2018  2019  
Total (USD million)  3,495.5  4,791.5  3,678.2  3,484.0  4,933.7  6,070.3  6,377.5   
HS Chapter 25  
(salt; sulphur; earths, 
stone; plastering 
materials, lime and 
cement)  84.2 72.4 66.1 59.0 84.2 189.9  206.2  
 
HS Chapter 26  
(ores, slag and ash)  1,761.2  3,223.0  2,662.3  2,108.4  2,200.5  2,670.0  2,686.2  
 
HS Chapter 27  
(mineral fuels, mineral oils 
and products of their 
distillation; bituminous 
substances; mineral 
waxes)  1,650.0  1,496.1  949.7  1,316.7  2,648.9  3,210.4  3,485.1  
2701 Coal; briquettes, ovoids 
and similar solid fuels 
manufactured from coal  1,116.2  848.6  555.0  971.8  2,256.7  2,786.2  3,074.4  
2603 Copper ores and 
concentrates  949.0  2,574.7  2,280.1  1,607.8  1,613.1  2,012.2  1,795.9  
2601 Iron ores and 
concentrates; including 
roasted iron pyrites  654.3  446.4  227.2  249.9  313.4  342.2  576.6  
2709 Petroleum oils and oils 
obtained from bituminous 
minerals; crude  515.5  634.6  387.2  337.2  374.1  392.0  366.7  
2529 Feldspar; leucite; 
nepheline and nepheline 
syenite; fluorspar  83.3 71.5 65.5 59.0 84.2 189.9  205.3  
2608 Zinc ores and concentrates  119.1  113.2  101.7  145.4  180.8  197.8  189.0  
2607 Lead ores and 
concentrates  1.3 0.4 0.4 24.1 43.7 57.4 66.8 
2613 Molybdenum ores and 
concentrates  29.5 35.1 29.5 26.4 37.4 49.9 49.0 
2704 Coke and semi -coke, of 
coal, lignite or peat, 
whether or not 
agglomerated; retort 
carbon  0.0 0.0 0.0 0.0 0.0 5.5 27.2 
2710 Petroleum oils and oils 
from bituminous minerals, 
not crude; preparations 
n.e.c., containing, by 
weight, 70% or more of 
petroleum oils or oils from 
bituminous minerals, 
these being the basic 
constituents of the 
preparations; waste oils  11.8 11.9 5.9 5.9 6.9 10.0 12.1 
Source:  UN Comtrade Database.  
4.47.   China and, to a much lesser extent, the Russian Federation are by far Mongolia's main export 
destinations. In 2019, for the products of HS Chapter 25 (salt; sulphur; earths, stone; plastering 
materials, lime and cement), China absorbed 75.8% of Mongolia's exports in value, followed by the 
Russian Federation, with 24.0%. For products covered by HS Chapter 26 (ores, slag and ash), China 
accounted for 99.2% of the exports; and for products covered by HS Chapter 27 (mineral fuels, 
mineral oils and products of their distillation; bituminous substances; mineral waxes), 97.9%.  
4.48.   As at September 2020, 2,645 licences, covering a total of 6.2 million hectares of land, had 
been granted, of which 956 exploration licences covering 4.6 million hectares of land and 
1,710  operation licences, of which 300 were active. Of these 2,645 licences:  
• 2,102 were held by compan ies with 100% domestic investment (about 10% of which were 
state-owned);  
• 401 were held by companies with 100% foreign investment; and  
• 142 were held by companies with joint ventures (a vast majority of which with Mongolian 
private interests).  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 102 - 
 
  4.49.   Among the com panies with 100% foreign investment, 132 are from China, 30 from the Virgin 
Islands, 16 from Singapore, 15 from Hong Kong, China, 12 from Canada, 10 from the Republic of 
Korea, 5 from Australia, 4 from the Russian Federation, 2 from the United States, 2 fr om Japan, and 
2 from Germany.  
4.50.   The principles of the legal regime of mining are defined by the 1992 Constitution. Under it, 
"the land and its subsoil shall be subject to the people's authority and under the protection of the 
State". The amendment to the Con stitution, approved on 14 November 2019, modified that 
formulation to state that "the land other than in [a] citizen's private ownership, as well as the subsoil 
with its mineral wealth, forests, water resources, and wildlife are state public property".  
4.51.   The mining industry is regulated by the Ministry of Mining and Heavy Industry (MMHI) and by 
the Mineral Resources and Petroleum Authority of Mongolia (MRPAM). The latter is a government 
implementing agency in charge of policies and plans for the preservation,  conservation, and 
reclamation of geological resources, and of the administration of geological resources and activities. 
It conducts geological and mineral surveys, inspections, studies, and research; maintains mineral 
data and licence information; and is sues mineral licences.  
4.52.   The main legislation governing the sector is the Minerals Law, 2006. In terms of scope, it 
governs the reconnaissance, exploration, and mining of all types, except water, petroleum, natural 
gas, radioactive minerals, and common miner als, which are regulated by other specific laws. In 
terms of substance, the Law regulates ownership of minerals; classification of mineral deposits; 
requirements for minerals licence holders; state involvement and participation in the sector; 
limitations a nd prohibitions of mineral prospection, exploration, and mining; licensing regulations; 
terms and fees for exploration, and mining activities and their requirements; obligations of licence 
holders (environmental protection requirements, royalties, and repo rting); licence transfer and 
licence revocation -related issues; and licence -related dispute settlement mechanisms.  
4.53.   The main change to the mining legislation during the review period was a series of 
amendments to the Mineral Law,  which were approved by Parl iament on 26 March 2019, and concern 
the tax and royalties' regime. Previously, royalty payments collected for the State budget were based 
on the sales value of each type of product extracted and sold, shipped for sale, or exploited at the 
mine site. This created conditions for the avoidance/evasion of royalty fees by unlicensed artisanal 
mining cooperatives and partnerships, including exporters, sellers who bought minerals from them, 
and unlicensed concentrators and processing plants; there was also a lack  of reports/information 
submitted to the relevant authorities. Consequently, it became difficult to implement Article 6.1 of 
the General Taxation Law, which states that "taxable items include income, property, goods, works, 
services, certain rights, land, its subsoil, natural resources, mineral reserves, air, soil and water 
pollution". The amendments to the Mineral Law subjected these operators to the payment of royalties 
and to reporting obligations. They also closed loopholes regarding the purchase of gol d by the Bank 
of Mongolia , so as to increase the country's foreign exchange reserves and to fully collect royalty 
payments for the state budget.  
4.54.   The Law stipulates that the level of state ownership may vary, depending on the financing of 
the exploration, its nature, and whether the mineral deposit qualifies as a "strategically important 
mineral deposit". Article 4.1.12  of the Mineral Law states tha t a "strategically important mineral 
deposit" means a deposit that affects national security, or national economic and social development, 
or produces or can produce more than 5% of annual GDP. Compulsory state ownership clauses can 
be replaced by addition al royalties. The Law also stipulates that:  
• For mineral deposits identified after an exploration financed by state budget funds, the share 
of public ownership shall be determined by the mining contract.  
• In the case of the exploitation of a strategically im portant mineral deposit, the State may 
own up to 50% of the deposit if the deposit is explored with state budget funds.  
• In the case of a strategically important mineral deposit that has been explored and identified 
with private funds, the State may own up to 34% of the shares of the company. Accordingly,  
the Government owns 34% of the Oyu Tolgoi gold and copper project, while Canada's 
Turquoise Hill Resources holds the remainder of the shares.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 103 - 
 
  • In the case of radioactive mineral deposits explored with state budget funds, the State shall 
own at least 51% of the shares.  
• In the case of radioactive mineral deposits explored and identified with private funds, the 
State shall own at least 34% of the shares of the company holding the mining licence to 
operate the de posit. Accordingly, Badrakh Energy LLC, which is the owner of the Zuuvch -
Ovoo, Dulaan Uul, and Umnut uranium deposits located in Ulaanbadrakh soum in Dornogobi 
aimag , is owned by the state -owned Mon -Atom LLC (34%), and by the French and Japanese 
joint vent ure Areva -Mongolia LLC (66%) .  
• Radioactive mineral deposits are classified as strategically important mineral deposits, 
regardless of their size, and the Government has exclusive powers over their ownership and 
use. 
4.55.   The Law stipulates that only legal entit ies incorporated in Mongolia can apply for and hold 
licences for mineral exploration . This requirement does not preclude a 100% foreign ownership of 
the entity. Exploration licences can be granted either upon the request of the legal entity or by way 
of tendering. The holder of an exploration licence has the exclusive right to apply for and to obtain 
a mining licence covering all or any portion of the exploration licensed area. The MRPAM grants 
mining licences for a period of 30 years, which can be extended  for up to two 20 -year periods. If the 
exploration licence holder fails to submit an application for a mining licence upon the expiration of 
its exploration licence, the mining licence for the area is put out to tender.  
4.56.   Procedures applied for the granting of mining exploitation licences differ regarding land rights, 
depending on the degree of foreign ownership of the applying entity. For an entity whose capital 
comprises between 25% and 100% foreign investment, the licence holder can obtain only a land -use 
right. Entities with less than 25% foreign investment are considered domestic entities, and are 
eligible to obtain a land possession right. Another difference in treatment between domestic and 
foreign entities is the requirement that foreign SOEs investing  in an entity operating in the mining 
sector need prior approval from the authorities if they acquire 33% or more of the shares. This 
requirement stems from the generic investment law applicable to all economic sectors.  
4.57.   Holders of mining licences on strate gic deposits must trade at least 10% of their shares on 
the Mongolian stock exchange. Holders of mining licences must give preferential supply of mined 
and semi -processed mining products to domestic refineries or processing plants that operate in 
Mongolia,  at market price.  
4.58.   A mining licence can be transferred if:  
• the licence holder was reorganized through a merger or consolidation;  
• the licence holder sold the mining equipment, machinery, and documents, and proved 
that the applicable tax was fully paid for the purchase of the same; or  
• in the case of the licence holder defaulting on its obligations under the pledge 
agreement or underlying loan agreement, the pledgee may enforce the licence pledge 
by transferring it to itself or a third party that is incorpora ted under Mongolian law to 
be the resident taxpayer.  
4.59.   Chart 4.4 details the number of exploration and mining licences granted during the review 
period.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 104 - 
 
  Chart 4.4 Exploration and mining licences granted, 2013 -20 
 
Note:  2020 figures are provisional.  
Source:  Data provided by the authorities.  
4.60.   Chart 4.5 describes the tax regime of mining in Mongolia. Relevant laws and regulations apply 
equally to both domestic and for eign investors.  
Chart 4.5 Key fiscal instruments  
 
Note:  Fiscal instruments are in blue, and the tax base is in green.  
Source:  Asian Development Bank. Viewed at: 
https://www.adb.org/sites/default/files/publication/611416/mongolia -economic -prospects.pdf . 
4.2.2   Energy  
4.2.2.1   Overview  
4.61.   Chart 4.6 provides the key energy indicator s as defined by the International Energy Agency 
(IEA). It illustrates a downturn until 2015 for energy production, supply, and emissions, but not for 
electricity consumption, which shows constant growth. It also shows the absence of a decoupling 
between en ergy production and supply, on the one hand, and carbon emissions, on the other. This 
1,717
1,345 1,2952,022
1,745
1,405
1,126
9481,301
1,3911,3961,558
1,624
1,673
1,670
1,696
05001,0001,5002,0002,5003,0003,5004,000
2013 2014 2015 2016 2017 2018 2019 2020Mining ExplorationChart 4.[MNG] Exploration and mining licenses granted, 2013 -20
Source: Data provided by the authorities.Note: 2020 figures are provisional.
Chart 4.[MNG]    Key fiscal instruments
Revenue from commodity sales
Gross revenue to investorsRoyalty
5% of sales
Taxable income to investorsAdditional royalty
2.5%-5%
Income tax
25%After-taxprofit
Government equity tax
34%-100%Investor's dividends
Investor's net
dividendsWithholding tax
Government revenueInvestor's
returnCustoms duties 5% 
and VAT 10%Production cost
Note:  Fiscal instruments is in blue and the tax base in green.
Source: Asian Development Bank.  Viewed at: https://www.adb.org/sites/default/files/publication/611416/mongolia -economic -
prospects.pdf .WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 105 - 
 
  is largely due to the prominent share of coal in the energy supply, a share that increased during the 
review period. Chart 4.7 illustrates the evolution of the total prim ary energy supply between 2012 
and 2018.  
Chart 4.6 Key energy statistics, 2012 -18 
Source:  IEA. Viewed at: https://www.iea.org/countries/mongolia . 
Chart 4.7 Total energy supply (TES) by source  
 
Source:  IEA. Viewed at: https://www.iea.org/countries/mongolia . 
4.62.   As illustrated by Chart 4.7, energy consumption grew by 25%, but the relative shares of the 
sources remained stable. The largely dominant share of coal grew, whereas that of biofuels and 
waste, which was already marginal, diminished. The share of hydro, wi nd, and solar energies 
Chart 4.[MNG]   Total energy supply (TES) by source
Oil
26.6%2018 2012
Coal
70.1%Biofuels and waste
3.2%
Hydro, wind, 
solar, etc.
0.1%
Source:  International Energy Agency.  Viewed at:  https://www.iea.org/countries/mongolia .Total:  4,459 KTOETotal:  5,609 KTOE Oil
24.6% Biofuels and waste
2.5%
Hydro, wind,
solar, etc.
0.7% 
Coal
72.2% 
Chart 4.[MNG]  Key energy statistics, 2012 -18
Source:  International Energy Agency.  Viewed at: https://www.iea.org/countries/mongolia .Energy production
MtoeTotal primary energy supply
Mtoe
Electricity final consumption
TWhTotal CO 2emission
Mt of CO 21015202530
2012 2013 2014 2015 2016 2017 20184.04.55.05.56.0
2012 2013 2014 2015 2016 2017 2018
4.05.06.07.08.0
2012 2013 2014 2015 2016 2017 201814.016.018.020.022.0
2012 2013 2014 2015 2016 2017 2018WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 106 - 
 
  increased seven -fold but from a very low base. In fact, the total of renewables diminished (from 
3.3% to 3.2%).  
4.63.   In 2014, Mongolia adopted the Green Development Policy (Parliamentary Resolution No. 43), 
whose objective is to promote a sustainable consumption and production pattern with efficient use 
of natural resources, and reduced greenhouse gas emissions and waste generation. It aims to reduce 
greenhouse gas emissions, through increased energy efficiency, by 20% by 2030, and to ens ure 
that the share of renewables used in total energy production  reaches  20% by 2020, and 30% by 
2030. This goal could be achieved by investing in greener energy production processes and in other 
industrial technologies, reducing excessive consumption and losses, and optimizing pricing policies.  
4.64.   Mongolia ratified the Paris Agreement in 2016, confirming its intended Nationally Determined 
Contribution (NDC)  of 2015, to reduce greenhouse gas emissions by 14% below the business -as-
usual scenario in 2030, equiva lent to an annual reduction of approximately 7.3 Mt CO 2 of economy -
wide emissions in 2030. On 19 November 2019, the Government approved an update with an 
increased NDC to reduce greenhouse gas emissions by 2030 to 22.7%, compared with the business -
as-usual  scenario of 2015. This revised NDC was submitted to the United Nations Framework 
Convention on Climate Change (UNFCCC) on 13 October 2020.  
4.2.2.2   Hydrocarbons  
4.2.2.2.1   Coal 
4.65.   Exploration and exploitation of coal mines come under the mining regime described in the 
section above. In 2019, more than 95% of the coal produced was exported to China.  
4.66.   The main use of non -exported coal and, in particular, of lignite is the generation of electricity 
and heating in Combined Heat Power (CHP) plants. This practice started in th e 1960s, and creates 
significant environmental challenges for Mongolia. The Government has not set detailed targets to 
reduce coal dependency.  
4.67.   Both w holesale and retail trade of coal are open to private investors, including foreign 
investors.  
4.2.2.2.2   Gas 
4.68.   No significant gas deposits have been found in Mongolia. There is almost no consumption of 
gaseous fuels, except for small amounts of liquefied petroleum gas  (LPG), which is imported mainly 
from the Russian Federation for use in vehicles or for cooking purposes in households and 
restaurants. A gas pipeline linking the Russian Federation and China through Mongolia is envisaged, 
and a feasibility study has been launched in 2020 by Gazprom and the Government.  
4.2.2.2.3   Oil 
4.69.   The exploration and production of crude oil follow a specific regime distinct from the general 
mining regime outlined in the Petroleum Law, 2014. The main objective of the Law is to attract 
further forei gn investments.  
4.70.   Out of 33 prospective oil exploration fields, 17 foreign and 18 local contractors have signed 
Product Sharing Agreements (PSAs) on 17 fields, and are conducting oil exploration activities as 
detailed in Table 4.12.  
4.71.   Crude oil is being extra cted from three oil fields in accordance with PSAs, namely the 
Toson -Uul XIX and Tamsag XXI fields located in Dornod aimag (PetroChina Daquing Tamsag LLC, 
China), and the BKHG -97 field located in Dornogobi aimag (Dongsheng Petroleum Mongol LLC, 
China).  
4.72.   Prospecting is a preliminary stage of the mineral exploration. A licence is not required to 
prospect, but the MRPAM must sign a prospecting agreement with the interested party. The 
Petroleum Law distinguishes between two main categories of petroleum products,  conventional "oil" 
(i.e. crude oil, natural gas, and refined petroleum) and "unconventional oil" (i.e. oil sands and shale). WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 107 - 
 
  Conventional and unconventional oil exploration activities are carried out on the basis of a PSA. The 
MRPAM negotiates and enters into a PSA with investors, upon approval from the Government, to 
conduct oil exploration in the specified exploration field. The MMHI issues, extends, suspends, and 
revokes exploration and mining licen ces. 
Table 4.12 Oil exploration licen ces 
Source:  Information provided by the authorities.  
4.73.   Entities carry out petroleum research and sales activities under exploration and production 
licences; additional licences are not required. As there is not an existing oil refinery in Mongolia, the 
extracted crude oil is exported to China. The F -type licen ce for export transport is issued by the 
National Road Transport Center, an agency of the MRTD .  
4.74.   The term of an oil exploration licence cannot exceed eight years, and may be extended twice 
for two -year periods. The term of an oil extraction licence is 25 y ears, and may be extended twice 
for up to 5 years.  
4.75.   Unconventional oil exploration licen ces are issued for a term of a maximum of 10 years, which 
may be extended once for a maximum of 5 years.  
4.76.   Furthermore, an exploration licence may be issued to a company  that was successful in its 
bid for an oilfield where the MRPAM and a company conducting research have not been able to 
conclude a PSA. As specified in the Petroleum Law, the contractor shall receive petroleum cost 
reimbursements only when the sale of oil begins. The reimbursement is paid on 40% of the oil 
remaining after the oil for which royalties are paid is deducted from the total oil extracted in a given 
year incurred during the exploration, exploitation, and processing phases can be reimbursed up to 
the amount stated in the PSA. According to Article 32 of the Petroleum Law, once the term of a PSA 
ends, the contractor shall not be granted the portion of cost -recoverable expenses, and they shall 
remain unrecovered.  
4.77.   The Government shall not pay any intere st on the contractor's accumulated expense for cost 
recovery. The Petroleum Law, 2014, adopted additional rules and some key provisions of the PSA 
template. The PSA template was approved by Government Resolution No. 104, 2015, for petroleum 
exploration and  production. Some changes were made to the template regarding confidentiality 
conditions of agreement. Government Resolution No. 5, 2018, "Procedure for payment, allocation 
and spending of petroleum royalty and license" and the Government Resolution No. 17 8, 2019, 
"Procedure for petroleum accounting and settlements" were also adopted.  
4.78.   The Petroleum Products Law, 2005, regulates the import, production, domestic trade, 
transportation, and storage of petroleum products defined as "all types of fuel products, special 
liquids, combustible gas, lubricating materials, bitumen, black oil and other products that are 
produced through the refining of petroleum and other chemical compounds".  Site name  Contractor  Investors' registered jurisdiction  
Matad XХ PetroMatad LLC  Cayman Islands, (a British Overseas 
Territory)  
Nyalga XVI  Shaman Resources Limited  Canada  
Galba XI  Zon Hen Yu Tian Limited  China  
Sulinkheer XXIII  Shunkhlai Energy Co., Ltd  Mongolia  
Huhnuur XVIII  NPI Co., Ltd  China  
Bogd IV Cupcorp Mongolia LLC  Cayman Islands  
Ongi V 
Bayantumen XVII  Magnai Trade LLC  Mongolia  
Dariganga XXIV  Mongolia Shin II Energy (Apexpro 
Investment Ltd)  China  
Tokhom X (south)  Mongolyn Alt MAK LLC  Mongolia  
Sukhbaatar XXVII  Wolf Petroleum LLC  Australia  
Nomgon IX South Mongolian Oil LLC  Mongolia  
Uvs I Mongolia Gladwill Uvs Petroleum LLC  Hong Kong, China  
Kherlentokhoi XXVIII  Well-Pack Industrial LLC  Hong Kong, China  
Khar-Us II Renova Ilch LLC  Hong Kong, China  
Arbulag XXIX Max Oil LLC  Mongolia  
Tariach XV China Golden Sea LLC  China  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 108 - 
 
  4.79.   The import, production, and domestic trade of petroleum products require a pet roleum 
products licence from the MMHI , whereas transportation and storage activities do not require a 
specific licence but must be carried out in compliance with the Petroleum Products Law and relevant 
rules and regulations issued by the MRPAM. An amendmen t was also made to the Petroleum Products 
Law, 2013, requiring an additional licence for the retail trade of petroleum products delivered by the 
MMHI .  
4.80.   Mongolia has 31 exploration blocks for crude oil, and the country's current proven oil reserves 
are abou t 332.64 million tonnes. Table 4.13 details the production, imports, and exports of oil, crude 
oil, and oil products during the review period.  
Table 4.13 Oil, crude oil, and oil products production, imports, and exports, 2012 -19 
   
2012  2013  2014  2015  2016  2017  2018  2019  
Production of crude 
petroleum oil  '000 barrels  3,636.0  5,128.9  7,405.3  8,769.3  8,249.8  7,624.1  6,388.6  6,876.1  
Export of crude petroleum 
oil '000 barrels  3,568.0  5,243.8  6,885.1  8,135.2  8,015.9  7,514.2  6,189.8  6,545.2  
Export of crude petroleum 
oil USD million  336.0  515.5  634.6  387.2  337.2  374.1  392.0  366.7  
Imports of petroleum 
products           
Total below  '000 tonnes  1,144.7  1,194.4  1,131.2  1,119.0  960.8  1,249.1  1,327.6  1,671.5  
USD million  1,339.6  1,369.6  1,112.8  668.3  461.0  692.5  918.7  1,031.5  
Gasoline  '000 tonnes  389.1  380.1  416.0  433.5  385.3  410.9  435.5  541.5  
USD million  474.1  439.6  425.4  274.0  192.9  243.7  308.1  327.4  
Diesel fuel  '000 tonnes  715.5  772.9  685.9  655.0  548.1  805.3  848.8  1,080.4  
USD million  818.7  880.6  656.2  376.7  254.8  427.9  576.7  669.4  
Jet fuel  '000 tonnes  36.2 38.8 26.2 27.3 24.8 30.7 40.3 46.6 
USD million  43.9 47.5 29.1 16.6 12.6 20.1 32.4 33.3 
Heavy oil  '000 tonnes  3.9 2.6 3.1 3.2 2.6 2.2 3.0 3.0 
USD million  2.9 1.8 2.1 1.1 0.6 0.7 1.5 1.4 
Source:  IEA; and Mongolia Statistical Yearbook , 2019 . 
4.81.   As illustrated by the table, crude oil is exported in its quasi -totality because Mongolia does 
not yet have any refining facilities. The first such facility is due to open in 2022, with a planned 
capacity to cover three quarters of the country's needs. To that effect, Government Resolution 
No. 92, dated 20 March 2017, on "Establishing a state -owned enterprise", approved the creation of 
an up 100% state -owned company, Mongol Refinery LLC, to implement the oil refinery project and 
manage the facility. In addition, Government Resolution No. 59, 2017, approved the fin ancing of the 
project by a USD 1.24 billion Soft Loan Agreement established between the Government and EXIM 
Bank of India. According to the Agreement, the Project Management Consultant and EPC 
(engineering, procurement, and construction) contractors shall be selected from Indian companies. 
Government Resolution No. 323, dated 24 October 2018, stipulated that the MMHI shall exercise 
shareholders' rights of Mongol Refinery LLC.  
4.82.   Mongolia currently imports all of its refined products from neighbouring countrie s, and the 
overall trade balance of oil and oil products is largely negative.  
4.2.2.3   Electricity  
4.83.    Over 90% of the population has access to electricity at affordable prices .49 This level of access 
was achieved by a voluntarist policy of expansion of the electricity grid and the governmental price 
control of electricity tariffs compensated by equity infusions into electricity companies. Because of 
Mongolia's harsh climate, the p rovision of heat and electricity to the population, even below cost, is 
seen as an absolute political priority by the Government. The country intends to tackle the lack of 
economic viability of the sector by a massive investment programme partially finance d by foreign 
and private funds and by reform. Another illustration of this priority was the Solar Home System 
(SHS), a government -subsidized programme from 2008 to 2012, that provided virtually all herder 
families with access to electricity for lights, tel evisions, and mobile phones.  
 
49 World Bank, Systematic Country Diagnosis, Mongolia . Viewed at: https://elibrary.worldbank.org/ 
doi/pdf/10.1596/30973 . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 109 - 
 
  4.84.   Chart 4.8 describes the Mongolian production of electricity, by source, in 2012 and 2018.  
Chart 4.8 Electricity generation, by source, 2012 and 2018  
 
Source:  IEA, Mongolia . Viewed at: https://www.iea.org/countries/mongolia . 
4.85.   Coal remains the predominant source of electricity generation, but its share diminished by 
5% (Chart 4.8), in contrast to its growth in tota l energy consumption. The share of oil also decreased 
slightly, while wind energy achieved a remarkable breakthrough due to a massive investment 
programme. Hydro and solar energy also shows an increase, but not a significant one.  
4.86.   Mongolia has 19 generation  facilities (9 combined heat and power plants (CHPPs), 3 wind 
power plants, 2 hydroelectric power plants (HPPs), and 5 solar power plants) with a total installed 
capacity in 2020 of 1,407 MW, of which 275 MW (i.e. 19.3%) is from renewable sources. These 
plants cover about 80% of the country's needs, while the remainder is imported from China and the 
Russian Federation. Table 4.14 describes the evolution of production, imports, and use of electricity 
during the review period.  
Table 4.14 Electricity indicators, 2012 -19 
(Million kWh, unless otherwise indicated)  
  2012  2013  2014  2015  2016  2017  2018  2019  
Supply  5,181.6  6,215.0  6,725.0  6,930.0  7,113.4  7,601.7  8,201.0  8,623.1  
Gross generation  4,815.6  5,019.5  5,375.8  5,513.2  5,667.1  6,027.3  6,535.3  6,900.4  
Imports  366.0  1,195.5  1,349.2  1,416.8  1,446.3  1,574.3  1,665.7  1,722.7  
Use 3,772.6  4,732.1  5,158.4  5,283.5  5,445.7  5,948.7  6,449.7  6,846.4  
Industry and 
construction  2,338.9  2,930.7  3,171.6  3,261.4  3,356.3  3,692.0  4,003.0  4,249.2  
Transport and 
communication  156.8  196.9  211.4  216.5  222.9  247.4  268.3  284.8  
Agriculture  39.8 49.9 63.7 54.8 56.6 62.8 68.1 72.3 
Household, 
housing, and 
community 
amenities  906.7  1,139.2  1,251.4  1,277.5  1,321.3  1,426.6  1,546.7  1,641.9  
Other  330.4  415.4  460.4  473.3  488.6  519.8  563.6  598.3  
Losses in 
transmission and 
distribution  675.4  739.5  760.8  817.5  883.0  810.9  875.3  891.6  
Station internal use  712.4  725.3  772.4  778.2  748.7  816.4  849.3  860.9  
Exports  21.2 18.2 33.4 50.8 36.0 25.7 26.7 24.1 
Electricity produced 
per capita, kWh  1,762.3  1,797.9  1,866.2  1,860.0  1,872.2  1,945.8  2,068.8  2,163.1  
Source:  IEA, Mongolia . Viewed at: https://www.iea.org/countries/mongolia . 
Chart 4.[MNG]   Electricity generation by source
Oil
5.3%2018 2012
Coal
93.5%
Hydro, wind, 
solar  1.3%
Source:  International Energy Agency.  Viewed at:  https://www.iea.org/countries/mongolia .Total:  4,816 GWh Total:  6,535 GWh Oil
4.5% 
Wind
5.2%
Hydro, solar
1.8% Coal
88.5% WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 110 - 
 
  4.87.   While the production per capita grew consistently during the review period, consumption grew 
faster; thus, the relative share of imports within the total supply gr ew (from 7% in 2012 to 20% in 
2019). The high share of industry (62%) among the final uses indicates the importance of mining.  
4.88.   During the review period, the structure and organization of the sector remained largely 
unchanged. From a regulatory point of vi ew, the Ministry of Energy is in charge of the overall policy 
of the sector, and the Energy Regulatory Commission (ERC): (i) sets prices for heat and electricity; 
(ii) establishes the methodologies to calculate prices for fuel used to generate electricity;  and 
(iii) provides for the functioning of the electricity market. The ERC is also responsible for issuance of 
licences for electricity generation, transmission, and distribution; dispatching arrangements; 
electricity import and export; construction of ene rgy facilities, and gas and heating supply. It 
monitors and evaluates the activities of licence holders. Regulatory decisions by the ERC may be 
appealed in the Administrative Court if an energy enterprise disagrees with an ERC decision.  
4.89.   From an operational point of view, the sector is unbundled. The ownership and the 
management of renewable energy power plants are partially privatized and open to foreign 
investment; the remainder of the sector is, for the time being, state -owned and publi cly managed.  
4.90.   Regarding unbundling, a 2001 law created 18 state -owned corporations (now 25) that 
separated generation, transmission, and distribution: nine thermal power plants50, one national 
transmission grid, five regional distribution networks, two hea ting networks51, five electricity 
systems (i.e. regional grids), and one metallurgical plant and one coal mine (each with its own 
energy -generation facilities).52 
4.91.   These entities are currently state -owned and managed, as none has yet been privatized or 
concessioned.  There is no competition among them. Electricity tariff is determined by the ERC, based 
on the cost and inflation.  
4.92.   Renewable energy facilities are mostly funded by foreign investments.  The Renewable Energy 
Law provides for compet itive bidding for renewable energy sources.  
4.93.   Regarding privatization, while generation and distribution/retail companies could be 
privatized, transmission and distribution will remain public in the medium term. The transmission 
company operates a single -buyer system. The National Dispatching Center operates both a spot and 
an auction market.  
4.94.   There is no single unified national electricity network. Instead, the electricity system is 
composed of five grids, four of them interconnected. Table 4.15 details the c apacity installed for 
each grid and its share of consumers.  
Table 4.15 Number of consumers by grid  
Note:  Percentages do not add to 100% due to rounding.  
Source:  Information provided by the authorities.  
4.95.   The electricity system faces several challenges, in addition to its economic viability: the 
constant growth in consumption; the increasing dependency on imports; the obsolescence and 
environmental footprint of the existing CHP plants; the large energy loss es incurred during the 
 
50 Thermal power plants 2, 3, and 4; Darkhan Thermal Power Plant; Erdenet Thermal Power Plant; 
Dalanzadgad Thermal Power Plant; Baganuur Th ermal Power Plant; Nalaikh Thermal Power Plant; and Dulaan 
Shar River Thermal Power Plant.  
51 Ulaanbaatar Heating Network and Darkhan Heating Network.  
52 Darkhan Metallurgical Plant and Baganuur coal mine.  Grid Share of electricity consumers  
Central Energy System (CRES)  83.8%  
Southern Region Energy System (SRES)  2.3%  
Western Region Energy System (WRES)  6.4%  
Eastern Region Energy System (ERES)  4.2%  
Altaï-Uliastin Energy System (AUES)  3.2%  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 111 - 
 
  generation, transmission, and distribution processes; the decarbonization of the industry; and the 
financing of new capacities.  
4.96.   To address these challenges, during the review period, Mongolia reorganized its legislative 
and strategic  framework for electricity. It adopted two major policies that define renewable 
expansion plans, targets, and measures for improved efficiency in the energy supply sector, e.g. the 
reduction of transmission and distribution losses:  
• the State Policy on Ener gy (2015 -30) of 2015 (Parliamentary Resolution No. 63); and  
• the Mid -Term National Programme to Develop the State Policy on Energy (2018 -23), of 
2018 (Parliamentary Resolution No. 325).  
4.97.   The State Policy on Energy (2015 -30) foresees two stages. During the fi rst stage (2015 -23), 
the capacity is planned to double  (with the construction of six coal power plants and two hydropower 
plants), highly efficient equipment will be introduced, the share of hydropower is planned to reach 
at least 10%, and the tariff struc ture will be reformed to ensure the economic viability of the sector.  
4.98.   During the second phase (2024 -30), the energy security reserve , i.e. the potential maximum 
capacity needed to face peaks, will increase by at least 20%, the share of renewable energy sou rces 
in total installed capacity is planned to reach 30%, a unified energy system with a smart grid will 
replace the five present systems, the distribution system will be fully privatized, and the sector will 
operate on a competitive market basis. Mongolia  also plans to start exporting high -voltage 
electricity, notably through the 5.38 GW Shivee -Ovoo coal plant project, to cater to the needs of its 
neighbours.  
4.99.   Table 4.16 details the objectives and the indicators of the State Policy on Energy, compared 
with the status of the sector in 2014.  
Table 4.16 Detailed indicators and objectives of the State Policy on Energy  (2015 -30) 
Indicators/objectives  2014 base  End of the first 
stage (2023)  End of the second 
stage (2030)  
Reserve electrical installed capacity (i.e. 
maximum potential capacity installed to 
face consumption peaks)  -10% ≤10%  ≤20%  
Reserve heat installed capacity for big 
cities  3% ≤10%  ≤15%  
Profit margin for electrical tariff for central 
energy system  -16.22%  0% 5% 
Power plants used during the generation 
process  14.4%  11.2%  9.14%  
Electrical transmission, distribution  
losses  13.7%  10.8%  7.8%  
Share of renewable energy in the installed 
capacity  7.62%  20% 30% 
Greenhouse gas emission per Gcal of 
energy production  0.52 tonnes 
СО2 equivalent  0.49 tonnes СО 2 
equivalent  0.47 tonnes СО 2 
equivalent  
Reduction of building heat losses  0% 20% 40% 
Technologies used  - High pressure  - Subcritical pressure 
technology  
- Natural gas 
technology  
- High-capacity 
energy storage  
technology,  
- Hydro reserve plant  - Supercritical and 
ultra-supercritical 
pressure 
technology  
- Hydrogen 
technology  
- Solar thermal  
power plant  
Source:  Information provided by the authorities.  
4.100.   The second element of this overall electricity strategy is the Mid-Term National Programme 
to Develop the State Policy on Energy (2018 -23), which was approved by the Government in 2018. 
This national programme shall be implemented as part of the respective policies of the National 
Investment Program, the Government Action Program, the annual directives for  economic and social 
development, the state budget, loans, and public -private partnerships. The programme's estimated WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 112 - 
 
  budget includes USD 2.6 billion in foreign investment and USD 230.0 million from the state budget. 
This expansion strategy was revised in January 2020 to take into account the impact of the COVID -19 
pandemic and the additional environmental studies now required for the construction the mega 
hydropower project on the Eg River.  
4.101.   Table 4.17 details these revised expansion plans.  
Table 4.17 Electricity capacity expansion plans, 2020 -24 
Expansion plan  Source of 
energy  Capacity  Calendar  Financing  
Expansion of Thermal Power 
Plant 4  Fossil fuel  46 MW  2020-2021 
(delayed due to 
COVID -19) Loan from the Russian 
Federation  
Expansion of Erdenet Thermal 
Power Plant  Fossil fuel  35 MW  First half of 2021 
(delayed due to 
COVID -19) - 
Construction of Erdeneburen 
hydropower plant and building 
of 220 kW Erdeneburen -
Myangad -Uliastai overhead 
transmission line and 
substation  Hydropower  90 MW  2021 Hydropower plant - 
concessional loan from the 
China: 95%; state budget: 5%  
Overhead transmission line and 
substation - state budget : 
100%  
Expansion of Choibalsan 
Thermal Station  Fossil fuel  50 MW  2021 Concessional loan from China: 
95%; state budget: 5%  
Construction of Tavan Tolgoi 
Power Plant and related 
infrastructure  Fossil fuel  450 MW  - Erdenes Tavantolgoi LLC: 
30%; Mongolian Development 
Bank: 70%  
Construction of a 300 MW - 
400 MW power plant based on 
coal deposits in the central, 
eastern, and Gobi regions  Fossil fuel  300-400 
MW - - 
Increase the capacity of 
Amgalan thermal power plant 
by a combined 50 MW  Fossil fuel  50 MW  2023 State budget: 15%; 
Development Bank Loan: 85%  
Construction of a gas power 
plant based on the 
infrastructure of Thermal 
Power Plant II in Ulaanbaatar  Gas - 2024 Foreign concessional loan; 
public and private investment  
Source:  Information provided by the authorities.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 113 - 
 
  4.102.   The construction of the 90 MW Erdeneburen hydropower station in the western region will 
begin in 2021, and a 100 MW battery energy storage system and hydropower storage facilities are 
planned for the central region.  
4.103.   The State Policy on Energy was complemented during the review period b y the adoption of 
two pieces of technical legislation. First, in June 2015, an amendment to the Law on Energy  of 2001, 
introduced the concepts of "independent power producers" and "power purchase agreement". The 
sale of energy produced by an independent po wer producer will be regulated by a contract.  The 
amendment sets  minimum and maximum tariffs for this contract, and provides for the construction 
of new power sources and transmission lines, and for the modalities of the contract regarding 
connection to th e national transmission grid.  
4.104.   Second, two amendments, in 2015 and in 2020, to the Law on Renewable Energy  of 2007 
created and then reformed a Feed in Tariffs (FIT) system that is based on a location -, capacity -, and 
technology -specific competitive bidding and auction system. The electricity generated and supplied 
by wind power generators is presently valued at u p to USD 0.085 per kWh, and that supplied by 
solar power generators at  USD 0.12 per kWh.  
4.3  Manufacturing  
4.105.   Manufacturing's share in GDP has fluctuated over the period under review; it increased from 
9.7% in 2014 to 10.5%  in 2019 (8.0% in 2016). It accounted fo r around 8% of total employment 
during the review period. The authorities divide the manufacturing sector into two (heavy industry 
and light industry), in part because the two areas are overseen by separate ministries. Heavy 
industry includes metallurgy an d the production of gemstones, and is under the responsibility of the 
MMHI . Light industry, including food processing, wool, textiles, wood, and packaging, is under the 
MOFALI. Each ministry is responsible for policy initiatives, regulations, and rule -making for its 
subsector. Most of the light manufacturing is located near Ulaanbaatar, whereas heavy industry is 
located throughout the country near raw material extraction areas to facilitate integrated operations.  
As at the first quarter of 2020, Mongolia ha d approximately 8,000 active registered enterprises in 
manufacturing – around 3,000 enterprises in the light manufacturing sector , and 5,000 in the 
heavy.53 
4.106.   Mongolia's manufacturing sector exhibited significant growth during the review period, with 
the val ue of gross output more than tripling between 2013 and 2019, from MNT 3.2 billion to 
MNT 9.9 billion (Table 4.18). Much of this growth is attributable to the food and beverage sector, 
which accounted for over half of the manufacturing output in 2019 (MNT 5 .1 billion), and to the 
coke, chemicals, and mineral products sector (MNT 2.6 billion). Albeit from a lower base, there was 
also significant growth in the textiles and clothing and  the basic and fabricated metals sectors during 
the period. Only the compute r, electrical, machinery and equipment sector had lower output in 2019 
compared to 2013.  
Table 4.18 Gross manufacturing output, 2013 -19 
(MNT million)   
2013  2014  2015  2016  2017  2018  2019  
Total  3,212.8  4,042.7  5,320.2  5,210.1  6,780.3  8,635.1  9,873.6  
 Manufacturing of:         
Food, beverages and tobacco  1,118.2  1,403.3  3,221.5  2,976.0  3,357.3  4,522.7  5,125.7  
Textiles and clothing, leather and 
related  551.0  648.2  672.6  740.2  840.6  982.8  1,027.8  
Wood, paper, and printing, etc.  186.5  195.3  229.7  239.0  287.3  311.3  315.0  
Coke, chemicals, and mineral 
products  1,027.0  1,241.1  614.9  789.6  1,748.2  2,175.3  2,645.5  
Basic metals and fabricated metal 
products  185.3  369.5  385.6  290.7  338.1  433.6  445.8  
Computer, electrical, machinery 
and equipment  57.2 74.6 70.0 20.4 33.0 34.9 37.6 
 
53 Mongolian Statistical Information Service, Number  of Business Entities Registered with the Business 
Registration Fund, by Sector of Economic Activities, by Activity . Viewed at: 
http://1212.mn/Stat.aspx?LIST_ID=976_L26&type=tables ; and information provided by the authorities.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 114 - 
 
   
2013  2014  2015  2016  2017  2018  2019  
Motor vehicles and other 
transport vehicles  2.5 1.2 5.1 1.6 1.2 2.7 2.6 
Furniture, other manufacturing, 
repair and installation  85.2 109.5  120.9  152.5  174.5  171.7  273.5  
Source:  National Statistics Office of Mongolia, Mongolian Statistical Yearbook , 2019. 
4.107.   Mineral products, including unprocessed and semi -processed minerals, dominate Mongolia's 
exports. The next two significant categories of exported manufactured goods are t extiles and textile 
articles, and processed or semi -processed stones, each accounting for over USD  400 million in 
exports in 2019 (Table 4.19).54 The majority of manufactured exports tend to have little value added, 
as they are products that have undergone  only primary processing; this is particularly the case with 
the major exports, e.g. mineral concentrates and washed cashmere. Imported manufactured goods 
are less concentrated; the main categories of imported manufactured goods in 2019 were mineral 
produc ts, machinery and equipment, and automobiles and other transport vehicles, each accounting 
for over USD 1 billion.55 
Table 4.19 Imports and exports of key manufactured goods, 2013 -19 
(USD million)  
 2013  2014  2015  2016  2017  2018  2019  
Exports (top five categories)  
Mineral products  3,495  4,791  3,678  3,484  4,934  6,070  6,377  
Textiles and textile 
articles  283 339 303 300 335 410 435 
Natural or cultured 
stones, precious 
metals, jewellery  310 406 421 762 597 145 419 
Automobiles, other 
transport vehicles  21 35 17 70 17 25 79 
Base metals and 
articles  22 48 72 86 101 92 78 
Imports (top five categories)  
Mineral products  1,739  1,464  936 724 988 1,326  1,372  
Machinery, equipment, 
etc. 1,395  985 786 680 921 1,286  1,241  
Automobiles, other 
transport vehicles  1,001  616 368 436 623 897 1,164  
Base metals and 
articles  552 539 372 211 334 540 542 
Food products  412 383 329 329 379 437 444 
Source:  Mongolian Statistical Information Service, Exports, by groups of goods, by month and year  and 
Imports, by groups of goods, by month and year . Viewed at: 
http://1212.mn/stat.aspx?LIST_ID=9 76_L14&type=tables . 
4.108.   Mongolia's manufacturing policy is directed by aspects of its overall policy guidance, e.g. 
Vision 2050 and, in the short term, the Action Plan of the Government for 2016-2020 and the 
recently enacted Action Plan of the Government for 2020 -24.56 The genera l policy of the Government 
on manufacturing, as enumerated in these policies, is to increase competitiveness and promote the 
development of the manufacturing sector; a particular emphasis is placed on developing a "national 
production" programme that prior itizes export -oriented production and import -substituting 
manufacturing. Other goals include developing the creative industry, establishing industrial or 
technology parks, and promoting value -added food -processing manufacturing.  
 
54 Mongolian Statistical Information Service, Exports, by groups of goods, by month and year . Viewed 
at: http://1212.mn/stat.aspx?LIST_ID=976_L14&type=tables .  
55 Mongolian Statistical Information Service, Imports, by groups of goods, by month and year . Viewed 
at: http://1212.mn/stat.aspx?LIST_ID=976_L14&type=tables . 
56 Legalinfo, Resolution No. 24 on Approval of the Action Plan of the Government of Mongolia for 
2020-24, 28 August 2020. Viewed at: https://www.legalinfo.mn/law/details/15586 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 115 - 
 
  4.109.   In June 2015, Mongolia esta blished its Industrial Policy with the main purpose of developing 
industry as a priority sector to ensure the sustainable development of the country.57 It sets out eight 
main objectives, such as improving the legal environment, and supporting advanced tech nology 
industries (Box 4.3). The Policy is designed to be implemented in three stages, of five years each, 
between 2015 and 2030. In the first stage (2015 -20), the emphasis was on protecting national 
production, processing basic raw materials domestically,  supporting exports by introducing 
machinery and technology, and implementing an import substitution industrial policy. The second 
phase (2020 -25) plans to create an export -dominated industrial structure and the third phase 
(2025 -30) will develop knowledge -based industry and support the export of services and technology. 
Mongolia also developed a number of sector -specific programmes or policies for certain 
manufacturing sectors during the review period (Table 4.20).  
Box 4.3 Industrial policy objectives  
Improve the legal environment of the industrial sector and create favourable conditions for production  
Define industrial development zones and develop the Integrated Industrial Planning and Mapping of Mongolia, 
in accordance with the ecosystem, population, settlements, raw material resources, and infrastructure policy  
Identify industrial priorities, and plan and implement industrial clusters, free zones, industrial and technology 
parks, and transport and logistics networks  
Support effective cooperation between the Government, scientists, and the private sector in industry  
Support the establishment of industry based on advanced techniques, high -tech technologies, innovation, 
economically and socially efficient pro cessing, and recycling through investment and financial policies  
Support and develop the creative industry  
Support the training and professional development of human resources in the industrial sector  
Create a favourable environment for the development of trade and services and diversify exports  
Source:  Legalinfo, Resolution No. 62 on Approval of the State Policy on Industry , 19 June 2015. Viewed at: 
https://www.legalinfo.mn/law/deta ils/11129 . 
Table 4.20 Manufacturing programmes, 2013 -20 
Programme  Years in 
operation  Sector  Summary  Reference  
Industrialization 
21: 100 Program  2018-21 Light 
industry  To address challenges in the 
manufacturing sector, five 
specific objectives were 
identified, such as 
supporting production 
through financial and 
investment policies, and 
increasing the production of 
value -added products  https://www.legalinfo.
mn/annex/details/827
2?lawid=13205   
Cashmere 
programme  2018-21 Cashmere  To develop cashmere 
production techniques and 
technologies, increase the 
range and production of 
finished products, and 
support exports  https://www.legalinfo.
mn/law/details/13204   
Packaging national 
programme  2017-21 Packaging  To create a favourable legal 
and business environment 
for sustainable 
development, and to reduce 
the use of harmful 
packagin g https://www.legalinfo.
mn/law/details/12018   
 
57 Legalinfo, Resolution No. 62 on Approval of the State Policy on Industry , 19 June 2015. Viewed at: 
https://www.legalinfo.m n/law/details/11129 .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 116 - 
 
  Programme  Years in 
operation  Sector  Summary  Reference  
High-tech industry 
policy  Not specified  High-tech 
industry  To develop the high -tech 
industry to a level that 
ensures the sustainable 
development of the national 
economy  https://www.legalinfo.
mn/law/details/6632   
Source:  As indicated in the table.  
4.110.   The Government supports the manufacturing sector through a number of measures and 
incentives. In 2015, Mongolia passed a law on Production Support that is aimed at supporting 
export -oriented and import -substituting industries.58 It provides for various types of support 
measures. For example, if an enterprise exports more than 30% of its products, a reduction in the 
interest rate on loans from commercial banks is paid by the Government. For certain high -tech 
manufacturing, up to 75% of the R&D expenditures may be reimbursed by the Government. Export 
financing may also be provided to firms that export. The law establishes an Industrial Development 
Fund for the purpose of financing the various measures. According to the authorities, no support has 
been provided by the Fund to date.  
4.111.   In 2015, Mongolia also passed a resolution requiring state an d local governments to procure 
certain listed products from domestic manufacturers.59 The list contains 14 broad categories of 
manufactured goods that are required to be purchased from domestic factories that meet certain 
standards and quality requirements.  
4.112.   Further, certain machinery, equipment, and raw materials used in manufacturing may be 
subject to customs and/or VAT exemptions (Sections 3.1.3.2 and 3.1.4.1). The cashmere industry 
has also historically had state support measures, including a recent one related to the COVID -19 
pandemic (Section 3.3.1). Free zones and industrial parks pro vide support through the development 
of manufacturing and trade, by offering certain benefits in terms of customs warehousing or 
providing clusters for synergies.  
4.113.   Certain subsectors of the manufacturing sector are regulated. In the heavy industry sector, 
the MMHI requires a licence for the operation of enterprises engaged in the production of precious 
metals and gemstones, metallurgy, and machinery. An application must be completed, and a fee 
must be paid.60  
4.114.   The Government is involved in at least one manu facturing facility; it has a  50% interest in 
the state enterprise Erdenes Steel LLC, which manufactures steel (Section 3.3.5).  
4.4  Services  
4.4.1   Financial services  
4.4.1.1   Overview  
4.115.   While the share of financial services in the GDP is relatively high and grew during the review 
period (from 4.7% in 2014 to 4.9% in 2019), the financial services sector remains relatively 
underdeveloped as illustrated by the absence of foreign banks on the national market and the low 
penetration rate of insurance. Table 4.21 provides the main  economic indicators of the financial 
services sector during the review period.  
 
58 Ministry of Mining and Heavy Industry, Law about Production Support . Viewed at: 
http://mmhi.gov.mn/uploads/file/ceabe852e8fc66ceede8a0884a0 36bff035ae275.pdf .  
59 Resolution on Approval of the List, No. 336 of 17 August 2015. Legalinfo. Viewed at: 
https://www.legalinfo.mn/law/details/11285 .  
60 Fees for the manufacture of articles of pre cious metals and gemstones range from MNT 800,000 to 
MNT 2,000,000; those for metallurgical processing and machine production range from MNT 200,000 to 
MNT 500,000.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 117 - 
 
  Table 4.21 Main economic indicators of the financial services sector, 2014 -19 
 2014  2015  2016  2017  2018  2019  
GDP (in current price, billion MNT)  22,227.1  23,150.4  23,942.9  27,876.3  32,411.2  37,280.8  
Financial services (billion MNT)  1,041.8  1,239.7  1,224.3  1,417.5  1,559.1  1,802.4  
Share in GDP, %  4.7 5.4 5.1 5.1 4.8 4.9 
Total employment  1,040,711  1,067,589  1,132,843  1,266,942  1,256,356  1,155,945  
No. of employed persons in the 
sector  19,426  20,508  23,576  24,924  22,216  21,172  
of which insurance  1,183  1,122  1,171  1,355  1,342  1,195  
Share in total employment, %  1.9 1.9 2.1 2.0 1.8 1.8 
of which insurance  0.1 0.1 0.1 0.1 0.1 0.1 
Net financial services exports, 
(million USD)  3.5 7.0 15.8 25.5 7.7 4.3 
Net financial services imports, 
(million USD)  114.9  82.8 235.7  69.8 149.1  230.6  
of which insurance  11.9 23.9 15.3 20.4 20.9 21.8 
Source:  Information provided by the authorities.  
4.116.   The financial system is dominated by 13 commercial banks. The non -bank financial services 
sector includes 532 non -bank financial institutions, 246 savings and credit cooperatives, 
17 insurance companies, 54 insuranc e intermediaries , and 26 insurance loss -adjuster companies. 
This subsector accounts for only 6.3% of the sector's total assets.  
4.4.1.2   Banking services  
4.117.   Table 4. 22 describes the main indicators of the banking sector, while Table 4. 23 and 
describes its lending and the securities portfolios.  
Table 4.22 Main statistical indicators of the banking system, 2019  
Name  Number 
of 
branches  Assets 
(billion 
MNT)  Share in 
total 
assets 
(%) Deposits/  
current 
accounts 
(billion MNT)  Share in 
total 
deposits/ 
current 
accounts 
(%) Loans 
(billion 
MNT)  Share 
in 
total 
loans 
(%) Equity 
(billion 
MNT)  Share 
in 
total 
equity 
(%) 
Khan Bank  554 10,211.3  28.6 7,013.6  29.9 4,941.8  27.6 1,224.4  33.1 
Trade and 
Development 
Bank 58 7,803.0  21.8 3,369.2  14.4 3,662.4  20.4 728.0  19.7 
Golomt Bank  104 6,633.0  18.6 4,814.5  20.5 3,293.3  18.4 450.3  12.2 
Bank of 
Mongolia  495 3,278.9  9.2 2,563.4  10.9 1,850.2  10.3 253.8  6.9 
Khas Bank  78 3,454.8  9.7 1,843.2  7.9 1,827.6  10.2 248.6  6.7 
Ulaanbaatar City 
Bank 34 1,704.6  4.8 970.3  4.1 830.1  4.6 165.7  4.5 
Other banks  90 2,632.7  7.4 2,871.7  12.2 1,526.8  8.5 626.4  16.9 
Source:  Banks' quarterly financial reports; and Bank of Mongolia, banks' consolidated balance sheet.  
Table 4.23 Lending and securities portfolios of the banking system, 2014 -19 
 2014  2015  2016  2017  2018  2019  
Lending portfolio        
Total lending (billion MNT)  12,441  11,634  12,338  13,512  17,082  17,932  
Agriculture  317 241 283 310 331 384 
Construction  1,647  1,527  1,334  1,261  1,507  1,622  
Manufacturing  1,318  1,286  1,294  1,373  1,446  1,430  
Mining  1,130  1,164  762 1,034  1,233  1,518  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 118 - 
 
   2014  2015  2016  2017  2018  2019  
Real estate activities  2,223  1,525  1,969  1,905  1,824  2,067  
Wholesale and retail trade  1,803  1,678  1,742  1,864  2,411  2,893  
Other  4,003  4,212  4,955  5,764  8,329  8,018  
Loans to non -residents (billion MNT)  88 97 148 152 400 391 
Securities portfolio        
Total securities held (billion MNT)  1,196  1,774  1,411  4,501  5,269  5,135  
Foreign securities  0 0 22 31 59 60 
Domestic securities  1,196  1,774  1,388  4,470  5,209  5,075  
Central Bank Bill  853 1,025  577 3,445  4,447  4,424  
Other  343 749 811 1,025  763 651 
Source:  Bank of Mongolia.  
4.118.   The Bank of Mongolia, which is statutorily independent from the Government, is the 
supervisory authority of the sector and is responsible for monetary policy, banking supervision, bank 
licensing, and enforcement measures. The Financial  Regulatory Commission (FRC) is responsible for 
the supervision and regulation for financial institutions other than banks,  while the MOF is 
responsible for the fiscal policies applicable to the sector.  Competition policies including those 
regarding financial consumers and financial operations are the responsibility of the Authority for Fair 
Compe tition and Consumer Protection . 
4.119.   Mongolia has no p referential arrangement affecting banking services. The Bank of Mongolia 
has signed MOUs with the financial supervisory authorities of China, Japan, and the Republic of 
Korea, which are aimed at enhancing co operation in information exchange and capacity building.  
4.120.   As there is no subsidiary, branch, or unit of a foreign financial institution operating in 
Mongolia, the Bank of Mongolia does not explicitly recognize prudential norms of other countries and 
has not  entered into agreements concerning these areas.  
4.121.   During the review period, Mongolia adopted or amended numerous technical regulations 
regarding banking services61, the most prominent of which in terms of market access being  a new 
regulation on licensing (Decree No. A -82 of the Governor of the Bank of Mongolia , adopted on 
22 March  2019). Further regulations  are being drafted, notably on asset classification and 
provisioning, loan origination, approval and monitoring, collateral valuation, the stabilization f und62, 
and the appointment of independent members to the Board of Banks.  
4.122.   The new licensing regulation authorizes any legal entity and individual, except state and 
local government -owned legal entities and non -governmental organizations to establish a new b ank, 
and sets out the following general requirements to do so:  
• The planned bank shall have sufficient63 paid-in capital to run stable and efficient banking 
operations.  
• The planned bank shall not have an adverse impact on the nation's economic security.  
• The capital invested in the planned bank must be obtained from legal activities, and financial 
documents proving a lawful source of the capital must be provided.  
 
61 These r egulations include those on evaluating, complying with, reporting, and monitoring restrictions 
on banking activities (related parties' regulation); requesting bank refinancing from the Government; 
refinancing a bank under resolution; bank liquidation; bank resolution; bank conservatorship; Non -Performing 
Loans strategy; approval of the change in size and structure of a bank's paid -in capital; the establishment and 
regulation of branches and other bank units on asset classification and provisioning; prudential ratios; 
implementing bank corporate governance; preventing money laundering and  terrorism; financing; and onsite 
and offsite supervision of a bank's Anti -Money Laundering/Combating Finance Terrorism (AML/CFT) framework.  
62 This fund is aimed at recapitalizing and improving the liquidity of banks.  
63 The minimum amount, which is curren tly MNT  50 billion, is set according to a Governor's decree.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 119 - 
 
  • The shareholders, the board of directors, and the CEO must meet the requirements of the 
Banking Law:  
o Shareholders, if they are a legal entity, must be registered with the related 
authorities, subject to supervisory reviews, and structured so that the bank ing 
conglomerate can be examined by the Bank of Mongolia . They must report audited 
financial statements on an annual or more frequent basis. For persons to qualify as 
a "qualifying shareholder", they must: (i) not be a respondent, or a managerial 
official of a respondent legal person, in a bankruptcy case; (ii) not have been 
sentenced or convicted of crimes against the economy, ownership rights, public 
security vested interests, national and mankind security and peace; or convicted of 
corruption, (iii) have  financial capacity and have not caused conditions that would 
adversely impact the operations of the bank; and (iv) have submitted sufficient 
evidence proving themselves to be the owner of the shares.  
o Member of the board of directors must not have: (i) ove rdue debts; (ii) a criminal 
record; (iii) a conflict of ethical and business reputation with regard to overseeing 
the bank; or (iv) a conflict of interest that adversely influences the decision -making 
process of the bank. Additionally, they must: (i) hold a degree in banking, finance, 
economics, law, information technology, or corporate governance; and (ii) possess 
at least 10 years of professional experience (5 of which must be in a managerial 
position at a bank/non -bank financial institution). Moreover, i f the member was in a 
managerial position at a bank/non -bank financial institution whose licence was 
revoked and/or was subjected to administrative penalty, at least three years must 
have passed since that time.  
o In addition to the requirements set for a me mber of the board of directors, the CEO 
must not: (i) have conflicting interests or be a member of the board of directors; 
(ii) be a senior official of a legal entity engaged in non -financial activities that has 
ties to the Bank of Mongolia , other banks, o r other banking conglomerates; (iii) have 
worked in a managerial position at the Bank of Mongolia  in the last two years; and 
(iv) be in violation of any banking legislation or decisions by the Bank of Mongolia . 
Additionally, they must: (i) have a degree in  banking, finance, or economics; and 
(ii) legally be able to run professional operations.  
4.123.   The new licensing regulation sets additional criteria for foreign established banks, namely:  
• submitting the following documents: the decision of a foreign bank or fin ancial institution to 
establish a bank, a bank branch, or a representative office; and the permission from a 
competent authority of the jurisdiction to operate;  
• having been listed in the top 100 places of the Bankers' Almanac, in terms of total assets 
during the last three years;  
• having been rated no lower than A per S&P or Fitch,  or 2 per Moody's;  
• having established a bank or a subsidiary in jurisdictions other than the country of 
incorporation and which has operated continuously or no less than three year s; 
• not having breached the banking legislation or requirements of its country of incorporation 
or other jurisdictions where it operates actively; not having been subject to licence 
revocation or suspension or subsidiary/bank closing; or not having its solv ency status 
exacerbated due to these breaches during the last three years; and  
• having its representative office operating in Mongolia for more than one year.  
4.124.   Banking licen ces are granted by the Bank of Mongolia . There are no limitations on the 
number of li cences or on their time validity; licen ces must be processed within 60 days of the 
application. Selling or disposing of licen ces by banks is prohibited . The minimum capital requirement 
to obtain a licence is MNT 50 billion.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 120 - 
 
  4.125.   Mongolia has undertaken full GATS commitments for the first three modes of delivery 
(cross -border, consumption, and commercial presence) on a relatively large number set of banking 
subsectors , namely: (i) acceptance of deposits of money and other repayable funds from t he public; 
(ii) negotiable loans and advances for the purpose of financing trade and commercial and fixed 
investments; (iii) payments/money collection and transmission services; (iv) guarantees and 
commitments; (v) trading for own accounts or for accounts of customers, on an exchange or an 
over-the-counter market, of the following: (a) cheques and other bills of exchange; (b) foreign 
exchange; (c) forward exchange rate agreements; (d) approved securities and other negotiable 
instruments; and (e) customers' fund management; (vi) financial and investment advisory services;  
(vii) provision and transfer of financial information and financial data processing; (viii) advisory and 
other auxiliary services, excluding intermediation, relating to banking and other fin ancial services; 
and (ix) participation in issues of all kinds of securities, including underwriting and provision of 
services related to such issues.  
4.126.   These commitments were widened in the context of the Mongolia -Japan FTA, notably to all 
lending activitie s and to financial leasing.64 
4.127.   In terms of administrative allocation of financial resources and sound prudential measures, 
the Bank of Mongolia  sets reserve requirements for both domestic and foreign currencies (10.5% 
and 15%, respectively), minimum liquidi ty ratios (25%, but lowered to 20% under the current 
temporary relief measures), Tier I and total capital adequacy ratios (9% and 12%, respectively), 
capital conservation buffer depending on the systemic importance of banks (between 0% and 2%), 
and single and collective borrower exposures concentration limits (5% and 20%, respectively).  
4.128.   Concerning the determination of interest rates and fees, loan and deposit rates are 
determined  by general market conditions and principles. Regarding the calculation methodo logy, 
banks are obliged to follow the Bank of Mongolia  guideline on determining interests, and they must 
disclose information on the interest rates offered and the corresponding service and other fees.  
4.129.   The Bank of Mongolia  adopts and applies the Basel Comm ittee's Core Principles for effective 
banking supervision, taking into account the Mongolian national context and international relevance.  
4.130.   The deposit insurance scheme is based on the Payout Plus system, i.e. the Deposit Insurance 
Corporation is legally authorized to pay out the amounts of insured deposits up to the coverage limit 
of MNT  20 million (Article  8.1 of the Law on Deposit Insurance)  upon a trigger event that occurs 
when the Bank of Mongolia  decides to liquidate a bank within the stipulations provided in the Banking 
Law (Article  6.1 of the Law on Deposit Insurance).  
4.131.   According to a June 2020 IMF country report65, Mongolia's large banking system (assets of 
100% of GDP) poses a perennial vulnera bility to the debt outlook. If the Government were called on 
to backstop a systemic bank, fiscal costs could be considerable. Weak capital buffers in the banking 
system provide little cushion to absorb the impact of the pandemic crisis. In this context, ri sks arising 
from the temporary regulatory loosening of the sector should be carefully managed.  
4.132.   To tackle these challenges, the Bank of Mongolia  submitted a draft Banking Sector Reform 
Program, 2020 -23, for parliamentary discussion.66 This medium -term progr amme includes 5 core 
objectives and 49 reform actions, including recapitalization. The draft programme will address: 
(i)-bank ownership concentration and governance; (ii) modernization of bank supervision; (iii) the 
IMF recommendations (iv) improvement of the AML -CTF system; and (v) modern banking operations 
and FinTech.  
 
64 For more details on these commitments, see Ministry of Foreign Affairs of Japan, Annex 6 Referred to 
in Chapter 7, Schedules of Specific Commitments and List of Most -Favored -Nation Treatment Ex ceptions , 
pp. 674-676. Viewed at: https://www.mofa.go.jp/files/000067722.pdf . 
65 IMF, Staff Country Report No. 20/205 . Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2020/06/16/Mongolia -Request -for-Purchase -Under -the-Rapid -
Financing -Instrument -Press -Release -Staff-49520 .  
66 ADB, Proposed Countercyclical Support Facility Loan Mongolia: COVID -19 Rapid Response Program , 
May 202 0. Viewed at: https://www.adb.org/sites/default/files/project -documents/54174/54174 -001-rrp-
en.pdf .  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 121 - 
 
  4.4.1.3   Insurance  
4.133.   Box 4.4 describes the main indicators of the insurance sector.  
Box 4.4 Main economic indicators of the insurance sector  
Number of insu rance companies:  
2014: 17  
2019: 18 (1 life; 15 non -life; and 2 reinsurance)  
Total balance sheet of the sector (2019):  MNT 365.8 billion  
Share of the types of insurance companies (2019):  
Life: 2.5%; non -life: 76.9%; reinsurance: 20.6%  
Insurance premiums to GDP ratio (2019):  0.54%  
Total premiums (2019):  MNT 198.7 billion (life: MNT 1.3 billion; non -life: MNT 195.3 billion; 
reinsurance: MNT 2.1 billion)  
Market share and concentration  (cumulative market share of the top five companies) 
(2019):  
Life:  
National life: 100%  
Non-life: 
Top five: 63.9%  
Mongol Daatgal LLC: 16.7%  
Mandal Daatgal LLC: 14.8%  
Bodi Daatgal LLC: 14.3%  
Mig Daatgal LLC: 13.7%  
Tenger Daatgal LLC: 9.8%  
Reinsurance:  
National Reinsurance JSC: 98.6%  
Khubilai Reinsurance LLC: 1.4%  
Source:  Information provided by the authorities.  
4.134.   The Ministry of Finance is responsible for the overall policy and legislation of the sector, the 
FRC is in charge of the supervision, and the Office of Fair Competition and Consumer Protection 
deals with the  competition issues.  
4.135.   During the review period, Commission Resolution No. 02, 2019, revised the Insurance Rules, 
which included 17 regulations related to insurance activities (licensing, market conduct, prudential 
regulations, supervision, bankruptcy, and requirements for insurance auditors and actuaries) . 
Commission Resolution No. 114, 2020, approved the Insurance Market Code of Conduct, and the 
Code of Ethics of the Insurance Market, which regulates conduct related to the ethics of insurance 
professionals  and participants in the insurance market, the supervision of the implementation 
thereof, and the imposition of penalties.  
4.136.   The criteria for assessing applications for an insurance licence are:  
• the applicant must demonstrate that it is fully capable of comp lying with the insurance 
legislation and with a set of insurance rules after the issuance of the special licence;  
• the applicant must demonstrate sufficient management, organizational, and financial 
capacities; and  
• the issuance of a licence must not have a negative effect on the public or insured interests.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 122 - 
 
  4.137.   A foreign company or foreign citizen willing to become a shareholder of a Mongolian 
insurance company is subject to the same requirements as a Mongolian company or citizen. That is, 
the share capital must  be derived from a legitimate source of income, and the shareholder must 
meet the "fit and proper" requirement.  However, if a foreign insurer or an insurance intermediary 
carries out insurance activities, the following requirements apply, in accordance wit h Annex 10 of 
the Set of Insurance Regulations:  
• The foreign insurer or insurance intermediary should have a rating established by an 
internationally recognized rating body.  
• An insurance guarantee, in a minimum amount of MNT 1 billion for a foreign insurer and 
MNT 500 million for a foreign insurance professional participant shall be deposited in the 
account of any Mongolian bank.  
• The applicant should be established as an insurance branch or representative office in its 
territory of origin, or  in countries other than Mongolia, and the branch or representative 
office should be in operation for at least two years.  
• The capital of the foreign insurer applying to open a branch or representative office shall not 
be less than MNT 10 billion, and the c apital of a foreign insurance professional participant 
shall not be less than MNT 1 billion.  
• The applicant should not have been involved in money laundering or terrorism financing. 
The FRC can impose additional conditions and requirements, depending on the  classification, 
type, and form of the foreign insurer or the foreign insurance professional participant branch 
or representative office.  
4.138.   The FRC processes licences within 45 days of application. The licences are valid indefinitely 
until suspended or revoked, and they cannot be transferred through sale, gift, or collateral to others.  
4.139.   Mongolia undertook full GATS commitments on insurance, rei nsurance, and transportation 
insurance for the first three modes of delivery (cross -border, consumption, and commercial presence), 
and replicated these commitments in its FTA with Japan.  
4.4.1.4   Securities and stock market services  
4.140.   Box 4.5 provides the main indica tors of securities and stock market services.  
Box 4.5 Main indicators for securities and stock market services, 2014 -19 
Capitalization of the companies listed  
2014: MNT 1,442.7 billion (6.5% in GDP)  
2019: MNT 2, 693.1 billion (7.7% in GPD)  
Number of companies listed:  
2015: 299  
2019: 306  
Number of securities companies (and value of assets managed):  
2015: 68 (MTN 67.6 billion)  
2019: 54 (MTN 96.4 billion)  
Corporate bonds transaction value (2019):  MNT 0.2 billion  
Shar es traded value (2019):  MNT 133.7 billion  
Government bonds traded value (2019):  MNT 9.7 billion  
Number of securities firms, brokers and dealers, underwriters, investment funds, and 
joint -stock companies (2019):  379 
Number of s ecurities dealers (2019):  21 
Number of asset managers (2019):  21 
Source:  Information provided by the authorities.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 123 - 
 
  4.141.   According to the FRC67, the Mongolian capital market is underdeveloped and does not play 
a leading role in long -term financing and corporate bond financing is almost non -existent. The FRC 
states there is a need to implement policy measures to develop a secondary market, develop the 
corporate governance of joint -stock companies  (JSCs) , and introduce securities market settlement 
systems in line with international standards.  
4.142.   The FRC developed a list of amendments to current laws and new draft laws called the Main 
Direction of Improvement in Legislation of Mongolia by 2020, and sent it to the Government and 
Parliament. The list includes the Law on the Securities Mar ket and the Law on Investment. The draft 
law on Securities Market expands the scope of securities market regulation, reflects regulations 
including exchange and over -the-counter market relations, and introduces delivery -versus -payment 
principles. In this r egard, the draft law details regulations related to new clearing members, fund 
regulation of payment guarantees, transparency and governance of JSCs, and the protection of the 
interests of small shareholders . 
4.143.   From a regulatory point of view, the natural pe rson or legal entity applying for a licence for 
conducting securities dealer activities should comply with the requirements set by the Procedure on 
Licences for Conducting Regulated Activities in the Securities Market (Annex 1 of the Resolution of 
the FRC,  as at 4  April 2019), namely:  
• A company that has been operating a brokerage business for at least one year will be entitled 
to obtain an additional dealer licence, and have been adequately assessed for its prudential 
ratio, along with on -site and off -site inspections, for a period of one year.  
• The share capital of the legal entity has to be MNT 300.0 million (cash).  
• The legal entity must have a specialist to conduct dealer activities. This specialist must be 
licensed to work in the securities market and mus t meet the "fit and proper" requirements.  
• The natural person or legal entity must have software and be connected to a trading and 
settlement depository organization.  
• The natural person or legal entity must follow dealers' rules and regulations, and have a 
business plan.  
• The natural person m ust have a reference from a trading settlement organization that he 
or she has no objections to conducting dealer activities, and has fulfilled his or her duties 
as a member.  
4.144.   There are no additional requirements for foreign firms or individuals applying to practice 
these activities, and no such applications have been made so far.  
4.4.2   Legal services  
4.145.   The market access regime of legal services differs for domestic and foreign providers. Under 
the Law on the Legal Status of Lawyers, implemented in 2013, one must form a limited liability 
partnership and be a member of the Bar Association, which requires passing the bar exam, to obtain 
the title of lawyer and provide legal advice. To represent clients in court, a lawyer must also register 
with the Supreme Court.  
4.146.   Foreign lawyers must register with the Ministry of Justice and Internal Affairs, which requires 
proof of membership in a law society or bar association, and their practice is limited to aspects of 
foreig n law. They may not represent clients in court, although they may represent clients in legal 
arbitration.  
4.147.   Mongolia does not have commitments on legal services under the GATS or in its FTA with 
Japan.  
 
67 FRC, Capital Market in Mongolia , Viewed at: 
https://www.unescap.org/sites/default/files/Session%2012_Mongolia.pdf . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 124 - 
 
  4.4.3   Telecommunications  
4.148.   Table 4.24 compares the latest availa ble key indicators of the telecommunications sector 
with regional and world averages , and B ox 4.6 describes the market structure of the 
telecommunications sector . The mobile -broadband population coverage is high, with 3G networks 
launched in 2009 and LTE ( 4G) in 2016. There is also a relatively high degree of competition in the 
fixed market, with five operators. However, Mongolia 's fixed -line penetration is low, reflecting the 
popularity of mobile, especially in areas where fixed -line is not available. Fixe d-line subscriptions 
are now largely bundled into triple -play offers. Fixed -broadband choices include DSL, optical fibre, 
and WiMAX, with optical fibre accounting for the largest share of subscriptions.  
Table 4.24 Key indicators of the telecommunications sector, 2017 and (2019)  
Key indicators  Mongolia  Asia-
Pacific  World  
Fixed -line telephone subscriptions per 100 inhabitants  9.5 
(11.8)  9.5 
(..) 13.0 
(..) 
Mobile subscriptions per 100 inhabitants  126.4  
(134.3)  104.0  
(..) 103.6  
(..) 
Active mobile -broadband subscriptions per 100 inhabitants  80.8 
(96.0)  60.3 
(..) 61.9 
(..) 
3G mobile coverage (% of the population)  95.0 
(96.0)  91.3 
(..) 87.9 
(..) 
LTE/WiMAX coverage (% of the population)  21.0 
(59.0)  86.9 
(..) 76.3 
(..) 
Individuals using the Internet (%)  23.7 44.3 48.6 
Households with a computer (%)  32.6 
(36.4)  38.9 
(..) 47.1 
(..) 
Households with Internet access (%)  23.0 
(32.7)  49.0 
(..) 54.7 
(..) 
International bandwidth per Internet user (Kbit/s)  22.7 
(16.07)  61.7 
(..) 76.6 
(..) 
Fixed -broadband subscriptions per 100 inhabitants  9.3 
(9.66)  13.0 
(..) 13.6 
(..) 
Fixed -broadband subscriptions, by speed tier, % 
distribution:     
256 Kbit/s to 2 Mbit/s  27.0 
(18.5)  2.4 
(..) 4.2 
(..) 
2 Mbit/s to 10 Mbit/s  72.3 
(80.2)  7.6 
(..) 13.2 
(..) 
≥ 10 Mbit/s  0.8 
(1.3) 90.0 
(..) 82.6 
(..) 
.. Not available.  
Source:  International Telecommunication Union (ITU); and information provided by the authorities.  
Box 4.6 Market structure of telecommunications  
Main actors (name and 2019 market share)  
 
Fixed -line telecommunications services:  
Univision LLC: 58.70%; Skymedia LLC: 17.00%; Telecom Mongolia: 14.46%; Mobinet LLC: 5.03%; 
G-Mobile: 3.53%; UB Railway: 1.28%  
 
Mobile telephones services:  
Mobicom LLC: 38.03%; Unitel LLC: 33.08%; Skytel LLC: 17.43%;  G-Mobile LLC; 11.46%  
 
Mobile and Fixed Broadband Internet  
 
Mobile broadband:  Mobicom LLC: 45.37%; Unitel LLC: 34.94%; Skytel LLC: 12.62%; G -Mobile 
LLC: 7.07%  
 
Fixed broadband:  Univision LLC: 58.03%; Skymedia LLC: 26.61%; Telecom Mongolia LLC: 
5.94%; Mobinet LLC: 3.29%; Kewiko LLC: 2.90%; STX Citinet LLC: 1.36%; UB Railway: 0.50%; 
others: 1.37%  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 125 - 
 
  Foreign ownership in telecommunications companies:  Mobicom (KDDI LLC Japan: 98.84%)  
 
State ownership:  MTC: 94.7%; NETcom ( Information Communication Network Company): 100%  
Source:  Information provided by the authorities.  
4.149.   The following types o f service are fully liberalized68: domestic fixed -line long distance, 
Internet, leased lines, fixed -line, mobile cellular and mobile broadband,  cable modem and cable TV, 
international gateways, international fixed -line long distance, and digital subscriber  line. There is 
partial competition for the following services: fixed satellite services (FSS), fixed wireless broadband, 
wireless local loop, mobile satellite services (MSS), very -small aperture terminals (VSAT), and 
broadcasting satellite services.  
4.150.   The Communications Regulatory Commission (CRC), which was established in 2002, is the 
independent regulator of the telecommunications and information and communication technologies 
(ICT) sectors. Its members and chairperson are nominated by the Prime Minister for a six -year 
mandate. The CRC is financed by licence fees, spectrum fees, and regulatory fees. Its main tasks 
are to:  
• issue, suspend, or revoke licences;  
• define and certify technical terms and requirements of communication network facilities 
and equipment on customer premises;  
• approve general conditions of network interconnection agreements and revenue sharing 
agreements;  
• approve the tariff calculation methodology for communications services, and supervise the 
service tariff for market dominant su ppliers;  
• develop communications standards;  
• develop and implement a national numbering plan;  
• allocate and monitor the exploitation of the radio frequency spectrum; and  
• define regulatory fees.  
4.151.   The CRC regulates most aspects of the telecommunications and dig ital environment sectors, 
notably regarding interconnection rates, frequency allocation and assignment, service quality 
monitoring, numbering, quality -of-service standards setting, spectrum monitoring and enforcement, 
price regulation, technical -standards setting, type approval, licensing of ICT networks and services, 
enforcement of quality -of-service obligations, broadcasting (sound transmission and TV 
transmission), and radio frequency assignment (licensing).  
4.152.   The sector 's policy -making body is the Communi cations and Information Technology 
Authority (CITA), which develops and implements policies concerning communications, information 
technologies, spectrum management, postal services and broadcasting, including numbering, 
market competition, advanced techno logies, universal services, and human resources capacity. The 
CITA also administers cross -sectoral coordination on ICT policy implementation, and monitors and 
evaluates policy implementation of ICT state -owned organizations.  
4.153.   Broadcast content is regulated by the CRC, consumer protection by the AFCCP  and the CRC, 
universal service access by the CITA, information technology by the CITA and the CRC, cybersecurity 
by the CITA, and privacy and data protection by the Human Right Commission. Internet content is 
the responsibility of the operator, and is not regulated or moderated, except for issues concerning 
public morals, consumer protection, and national security.  
4.154.   The Mongolian Telecom Regulation authorizes local loop unbundling. There is currently no 
legislatio n or regulation on number portability, but there are plans to introduce such a regulation, 
following a 2014 telecom law amendment. The fixed interconnection regime is based on a symmetric 
model, i.e. fixed -line operators pay the same price to connect their  customers to a mobile network 
 
68 "Fully liberalized" means that there are no longer monopolies or restricted competition, and that any 
operator fulfilling the technical requirements can obtain approval and operate.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 126 - 
 
  as the mobile network has to pay them, which is a regulatory way to compensate the potential 
negative effects of the implementation of the "calling party pays" principle. Interconnection fees 
have to be cost -oriented. The int erconnection provider must submit for approval a reference 
interconnection offer (RIO) to the CRC, which has the mandate to approve general terms of 
interconnection agreements between networks, and revenue distribution procedures.  
4.155.   The frequency licensing p rocess is based on the principle of a "beauty contest" for most of 
the licences and on tendering for resources, such as FM, broadband, and 4G frequencies. The 
licensing system is based on classes. The radio waves are the property of the State. As the owner  
of the spectrum, the State grants rights of exploitation of radio frequency to other legal persons 
under the conditions set forth in the Law. The CRC has the power to assign radio frequency and 
issue regulations about it, and to define the technical requi rements of radio equipment and 
normative documents and to monitor their implementation. The frequency bands are divided 
between "special consumption" and "public consumption", according to their usage. Special 
consumption corresponds to radio frequencies u sed by the State for defence, security, disaster 
protection, and public protection. Public consumption covers radio frequencies assigned to business 
entities, organizations, and citizens. A licence is a document that allows the owner to use the 
frequency t o operate radio equipment to organize radio communication, and to provide public 
service.  
4.156.   A radio frequency certificate grants the right to use a radio frequency and all types of radio 
equipment for the purposes of private -use radio communications, e.g. ra dio communication, 
scientific research, testing, and trial radio service. The frequency certification process is based on 
the "first come, first served " principle.  
4.157.   The CRC allows and encourages both infrastructure -based mobile operators (that operate 
the n etwork) and non -infrastructure -based operators (that lease network capacity) to practice 
infrastructure sharing. It issued a regulation on mobile infrastructure sharing, based on a regulatory 
mandate. However, as at 2019, mobile infrastructure sharing was not practiced by operators.  
4.158.   Universal service obligations cover voice telephony services, fixed -line private residential 
services, individual mobile cellular broadband, and emergency services. They are the responsibility 
of the incumbent operator, and they  are financed by a universal service fund, with 130 contributors 
and a budget of MNT 3 billion (about USD 1.2 million), based on a contribution of 3% of the after -tax 
income of telecommunications service providers. The fund is managed by the CITA.  
4.159.   Apart fr om regulations on pricing of interconnection, and significant market power and 
monopoly issues, there are no pricing regulations on any telecommunications subsector, except for 
retail mobile voice telephony services and satellite TV services.  
4.160.   Table 4.25 p rovides data about and ranking of mobile telephony pricing as determined by 
the ITU's price -monitoring methodology, while Table 4.26 provides similar information for the 
fixed-broadband segment.  
Table 4.25 Pricing data for mobile telephony, 2019  
Type of 
basket  Rank  % of 
gross 
national 
income 
per capita  USD 
(current 
prices)  USD 
(PPP)  Monthly 
voice call 
allowance 
(in minutes)  Monthly 
SMS 
allowance  Monthly 
data 
allowance 
(GB)  Tax rate 
included 
(%) 
High-
consumption 
mobile data 
and voice 
basket  103 3.7 11.17  30.80  140 70 3.0 10.0 
Low-
consumption 
mobile data 
and voice 
basket  105 3.0 8.81 24.28  70 20 3.0 10.0 WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 127 - 
 
  Type of 
basket  Rank  % of 
gross 
national 
income 
per capita  USD 
(current 
prices)  USD 
(PPP)  Monthly 
voice call 
allowance 
(in minutes)  Monthly 
SMS 
allowance  Monthly 
data 
allowance 
(GB)  Tax rate 
included 
(%) 
Mobile voice 
basket  55 0.8 2.25 6.2 Postpaid 
427.4  
Prepaid 171.4  29.5 Postpaid 
1.6 
Prepaid  
2.8 10.0 
Mobile data 
basket  103 2.2 6.67 18.39  .. .. 3.0 10.0 
.. Not available.  
PPP: Purchas ing power parity. 
Source:  ITU, 2019.  
Table 4.26 Pricing data for fixed -broadband telephony, 2019  
Rank  % of 
GNI per 
capita  USD USD 
(PPP)  Speed 
(Mbit/s)  Cap per 
month  
(GB)  Most value for 
money (USD 
(PPP)/Mbit/s)  Tax rate 
included 
(%) GNI per 
capita 
in 2018 
(USD)  
68 2.2 6.43 17.72  1 200 17.7 10 3,580  
Source:  ITU, 2019.  
4.161.   In February 2017, the Government approved the state policy on the development of ICT, 
2017-25, to bring it in line with global trends, enhance e -governance, digitize other sectors, and 
increase the number of e -government services  and their prompt delivery.  
4.4.4   Transport  
4.4.4.1   Overview  
4.162.   Because Mongolia is a landlocked country with a large territory, difficult natural conditions, 
and low and unequal population density, transport infrastructure and transport services are vital for 
development.   
4.163.   Table 4.27 describes, for the review period, the share of the modes of transport for freight, 
in terms of both tonnes and tonne -kilometre s, number of passengers, passenger turnover in terms 
of passenger -kilometres, and revenue.  
Table 4.27 Key indicators of the transport sector, 2013 -19 
Indicator  2013  2014  2015  2016  2017  2018  2019  
Carried freight ('000 tonnes)  42,361  44,636  32,197  40,400  53,983  67,802  68,997  
   of which (%):  
      Railway  49.7 47.3 59.5 49.5 42.2 38.0 40.8 
      Road 50.3 52.7 40.5 50.5 57.8 62.0 59.2 
      Air 0.01 0.01 0.01 0.01 0.01 0.01 0.01 
Freight turnover (million tonne -
kilometres)  14,642  17,419  13,844  16,619  19,167  21,969  23,601  
   of which (%):         
      Railway  82.5 71.6 82.8 74.4 70.4 69.7 73.7 
      Road 17.5 28.3 17.1 25.5 29.5 30.2 26.3 
      Air 0.1 0.1 0.1 0.1 0.1 0.1 0.1 
Passengers carried (million passengers)  307.9  344.2  260.3  264.4  216.1  197.0  173.0  
   of which (%):  
      Railway  1.2 1.0 1.1 1.0 1.2 1.3 1.7 
      Road 98.5 98.8 98.5 98.6 98.2 98.0 97.4 
      Air 0.3 0.2 0.4 0.4 0.6 0.7 0.9 
      Water  0.01 0.01 0.04 0.00 0.01 0.01 0.01 
Passenger turnover (million passenger -
kilometres)  4,604  5,235  4,931  4,988  5,434  6,598  7,146  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 128 - 
 
  Indicator  2013  2014  2015  2016  2017  2018  2019  
   of which (%):  
      Railway  30.3 22.8 20.2 19.2 17.9 15.1 15.6 
      Road 41.2 53.3 39.3 39.3 37.6 44.3 40.9 
      Air 28.5 23.8 40.4 41.5 44.5 40.7 43.5 
      Water  0.01 0.02 0.02 0.01 0.01 0.004  0.003  
Revenue (MNT billion)  1,045.0  1,038.3  987.9  1,191.5  1,422.2  1,754.4  2,003.5  
   of which (%):  
      Railway  40.3 41.2 39.3 36.7 37.3 35.1 35.4 
      Road 36.0 35.0 34.9 39.2 35.6 39.7 39.7 
      Air 23.7 23.7 25.7 24.1 27.1 25.2 24.9 
      Water  0.01 0.05 0.06 0.02 0.02 0.01 0.01 
Source:  Mongolian Statistical Information Service, Transportation . Viewed at: 
http://www.1212.mn/stat.aspx?LIST_ID=976_L12 . 
4.164.   Regarding freight, the share of air transport was marginal and largely constant during the 
review period, both in terms of tonnage and of tonne -kilometre s (Table 4.27). For land transport, 
the share of road tra nsport in terms of tonnage, initially equal to that of rail transport, grew to reach 
a 60% share. In terms of tonne -kilometre s, rail remains dominant, although its share fell from more 
than 80% to around 70%. This high percentage is due to the role railway s play in the transport of 
mineral products, Mongolia's main export .  
4.165.   The situation is somewhat different regarding passengers. In terms of number of passengers, 
road remains the predominant mode with a share of over 97% during the review period. In terms 
of passenger -kilometres, the share of road was around 40% during the review period, while rail 
declined from 30% to 15%, and air progressed from less than 30% to more than 40%.  
4.166.   In terms of overall traffic evolution, the situation differs between frei ght and passengers 
during the review period, freight traffic grew by 62% in terms of tonnage, and by 61% in tonne -
kilometre s, largely due to the growth of mineral production and exports. For passengers, the traffic 
nearly halved in terms of the number of p assengers but grew by 55% in terms of 
passenger -kilometres, an evolution which appears linked to the growing share of air transport, where 
the number of kilometres per passenger is much higher. Overall, the revenue of carrier nearly 
doubled during the revi ew period.  
4.4.4.2   Air transport  
4.167.   The domestic aviation market in Mongolia is small and mainly comprises flights run by 
domestic air carriers linking Ulaanbaatar and other principal towns. There is no ceiling on foreign 
investment in domestic airlines, which is a r are feature by international standards.  
4.168.   The fully state -owned MIAT Mongolian Airlines (MIAT) JSC does not operate domestic flights. 
As illustrated by Table 4.28, the number of both domestic and international passengers and carried 
by air transport within, from, and into Mongolia has increased since 2015 while  the volume of freight 
oscillated around a declining trend.  
Table 4.28 Air transport selected indicators, 2013 -19 
  2013  2014  2015  2016  2017  2018  2019  
Traffic          
Freight  Tonnes  6,505  5,514  4,710  4,852  5,369  5,752  5,762  
    Luggage   5,825  4,955  4,212  4,409  5,022  5,339  5,408  
    Commercial freight   680 559 498 443 347 413 354 
Passengers  '000 777.94  682.21  955.9  1,023  1,252  1,422.5  1,621.6  
    International   452.17  442.13  765.9  790.5  927 1,020.9  1,188.2  
    Domestic   325.78  240.07  189.9  232.6  325.1  401.6  433.4  
Flights  Number         
International flights, of 
which   92,386  93,840  97,116  105,936  118,874  131,801  143,805  
    Overflights   85,690  87,117  90,686  99,210  110,953  123,296  133,663  
    Landings/take -offs  6,696  6,723  6,430  6,726  7,921  8,505  10,142  
Domestic flights   9,772  6,399  4,556  4,956  5,675  6,394  7,967  
Source:  Information provided by the authorities.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 129 - 
 
  4.169.   There are 17 licensed airports, 10 of which are owned and operated by the Civil Aviation 
Authority of Mongolia (CAAM). Of the 17 licensed airports, 8 have paved runways and runway lighting 
systems, including Chinggis Khaan airport, near Ulaanb aatar, which is the only international airport. 
While domestic traffic fluctuated and grew only modestly during the review period, international 
traffic has nearly tripled, and Chinggis Khaan airport faces congestion problems due to its one -way 
take-off an d landing runway and the effects of cold and windy winter weather that often delay flights.  
4.170.   The construction works for the New Ulaanbaatar International Airport (NUBIA), with a 
two-way take -off and landing runway, were conducted by the Joint Venture of Mit subishi Corporation 
and Chiyoda Corporation; they are partially financed by Japanese development aid through a Japan 
International Cooperation Agency loan of JPY 65.7 billion. NUBIA is to be operated by New 
Ulaanbaatar International Airport LLC, a Japan -Mongolia joint company established by the Japan 
Management LLC (Mitsubishi Corporation, Narita International Airport Corporation, Japan Airport 
Terminal Co., Ltd., and JALUX INC .) and Khushigiin Khundii Airport, a state -owned LLC of Mongolia, 
based on a 15 -year concession agreement. NUBIA is expected to open in 2021.  
4.171.   Airports services are governed by the Civil Aviation Law, 1999. The Law allows for 
public -private partnerships (PPPs), build -operate -transfer (BOT) schemes, and concessions, as 
exemplified by the  NUBIA project.  
4.172.   Sixteen operators are licensed for maintenance, repair, and overhaul (MRO) by the CAAM, 
of which seven are Mongolian -owned  enterprises, and nine are foreign: (i) Lufthansa Technik AG; 
(ii) Aircraft Maintenance & Engineering Corporation (AME CO Beijing); (iii) Rheinland Air Service 
GmbH; (iv) China Aircraft Maintenance & Engineering Co., Ltd.; (v) Shenyang Avias Aviation 
Maintenance Engineering Co., Ltd.; (vi) GDAT Ningbo Company Limited; (vii) Genel Havacilik A.S.; 
(viii) Fokker Services Asia  Pte Ltd.; and (ix) JSC Air Company (SCAT).  
4.173.   The Maintenance Department of MIAT is the only MRO operator certified by the European 
Agency for Safety in Aviation (EASA); it has provided aircraft maintenance services to 62 foreign 
airplanes since 2014.  
4.174.   There  are no specific regulations relating to computer reservation services (CRS). Both 
domestic and foreign -based enterprises, with or without a branch office in Mongolia, may provide 
CRS. Aerocrs, Amadeus, ARINC, PAXLink, and TravelSky  provide CRS to the Mong olian market .  
4.175.   Selling and marketing services by airlines are governed by the Regulation of Civil Air 
Transportation, 1998. There are no prohibitions or limitations on sales of tickets by foreign airlines, 
regardless of channel. Ticket sales require an aut horization that is automatically delivered once the 
Aircraft Operating Certificate has been obtained and the slot granted.  
4.176.   Mongolia has not undertaken any commitments on the air transport services explicitly 
covered by the GATS (maintenance and repair of aircraft, selling and marketing of air transport 
services by the airlines themselves, and CRS), either under the GATS or in its unique FTA with Japan.  
4.177.   MIAT has a de facto  monopoly on ground handling services. However, airlines can self -handle 
if allowed by the relevant Bilateral Air Services Agreement. Domestic air carriers are also allowed to 
self-handle and have started doing so. Mutual handling and third -party handling are not allowed.  
4.178.   The main legislation regarding commercial aviation is the Civil Aviation Law, 1999, which 
states that regulations applying to civil aviation should comply with international conventions and 
agreements to which Mongolia is a party. The Ministry of Roads and Transport  Development (MRTD) 
is responsible for developin g policy on air transport, while the CAAM is the government agency 
responsible for overseeing and regulating civil aviation, including setting and applying safety 
standards in compliance with the Chicago Convention, and the licensing and certification of a ir 
operators. As noted above, the CAAM is also responsible for providing air traffic services, and airport 
operation services, including ground handling services.  
4.179.   In 2013, Parliament approved the State Policy in the Civil Aviation Sector, which was in 
effect until 2020. This policy recognized the importance of air transport for a large, landlocked 
country with a low population density, and set a number of objectives, including an improved 
regulatory environment, a gradual opening of the sector to competitio n through "open-skies" WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 130 - 
 
  agreements, and the development of a passenger and air freight hub at the NUBIA to service 
northern Asia. A new State Policy in the Civil Aviation Sector, 2020 -30, is being drafted.  
4.180.   In March 2018, the MRTD  organized a consultative meeting with the aviation sector on the 
theme "Air Transport Liberalization, Reform of Civil Aviation". The Government indicated its intention 
to: 
• amend the Law on Civil Aviation to support the development of general aviation, pro vide 
essential air transport services, improve the capacity of international and local airports, 
separate the regulation of civil aviation services from CAAM 's operation, and create a legal 
environment for restructuring the CAAM;  
• provide policy support to broaden international airline cooperation by adding code -share 
arrangements to bilateral air service clauses and by increasing the number of flights and 
their frequency by Mongolian and foreign airlines on international routes, notably to the 
Republic of K orea, the Russian Federation, and Turkey, and through a gradual liberalization 
policy;  
• reduce state participation in the sector by privatizing up to 49% of the 100% state 
participation in MIAT;  
• encourage domestic private companies by exempting aircrafts a nd their equipment from 
import tax; introduce VAT exemption for air transport passengers;  and 
• develop a general aviation programme to be implemented in 2018 -21 via foreign, domestic, 
and private investment; hiring general aviation pilots; importing light a ircraft; and 
establishing permanent and temporary runways and aerodromes.  
4.181.   The CAAM has certified 21 air carriers, including 9 foreign carriers.  
4.182.   Table 4.29 describes the main subsectors of activities, fleet, ownership, and network of all 
Mongolian -certified  air carriers.  
Table 4.29 Main indicators for certified Mongolian air transport carriers  
Airline  Main sector of 
activity  Fleet 
(No. of 
planes)  Year of 
establishment  Ownership  Network (as at 
March 2020 
pre-COVID 
pandemic)  
MIAT Mongolian 
Airlines  Scheduled domestic 
and international 
passenger flights  
 6 1956 100% state owned  International:  9 
Domestic: 1 
(charter flight)  
Aeromongolia  Scheduled domestic 
and international 
passenger flights  
 3 2001 Private, 100% 
Mongolian (Monnis 
group)  International: 2 
Domestic: 10  
Eznis Airways  Scheduled and 
charter domestic 
and international 
passenger flights  
 1 2018 Private, 100% 
Mongolian  International: 1 
Domestic: 0  
Hunnu Air  Scheduled domestic 
and international 
passenger flights  
 4 2011 Private, 100% 
Mongolian  International: 4  
Domestic: 9  
A-jet aviation  Charter flights  2 
helicopters  2000 Private, 100 % 
Mongolian  
 Irrelevant  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 131 - 
 
  Airline  Main sector of 
activity  Fleet 
(No. of 
planes)  Year of 
establishment  Ownership  Network (as at 
March 2020 
pre-COVID 
pandemic)  
Geosan  Airborne geophysical 
survey and mapping 
flights and domestic 
charter flights  2 1996 Private, 100% 
Mongolian  Irrelevant  
MAK Charter flights  1 helicopter  2007 Private, 100% 
Mongolian  Irrelevant  
Mongolian 
Airways Cargo  Air cargo  1 2019 Private 100% 
Mongolian  International: 1  
Veltel Avia Star  Agriculture  1 2014 Private, 100% 
Mongolian  Irrelevant  
Top Extreme 
Action Mongolia  General aviation  4 2006 Private, 100% 
Mongolian  Irrelevant  
Zaluu Burged  General aviation  1 2016 Private, 100% 
Mongolian  Irrelevant  
Source:  Information provided by the authorities.  
4.183.   There is no specific policy for all -cargo flights.  
4.184.   The charter policy is based on reciprocity. Any airline having more than two take -offs or 
landings within Mongolia in any 28 -consecutive -day period, or more than eight take -offs or landings 
in any 365 -consecutive -day period shall be certified.  
4.185.   Since 2004, Mongolia has been a member of the ICAO International Air Services Transit 
Agreement.  
4.186.   Table 4.30 describes the bilateral air services agreements, according to the WTO Quasar 
methodology.69 
Table 4.30 Air transport agreements  Partner  
Date  
5th 
7th 
Cabotage 
Coop 
Designa - 
tiona 
Withhold -
ingb 
Pricingc 
Capacityd 
Stat 
ALIe 
China  08/04/1989  Y N N Y M SOEC  DA PD Y 10 
Poland  26/05/1989  N N N N S SOEC  DA PD  0 
Korea, 
Democratic 
People's 
Republic  03/08/1989  N N N N S SOEC  DA PD Y 0 
Romania  10/07/1990  N N N N S SOEC  DA PD Y 0 
Korea, 
Republic of  23/10/1991  N N N Y M SOEC  DA PD Y 4 
Kazakhstan  27/10/1992  N N N N S SOEC  DA  N 0 
Singapore  18/05/1993  Y N N N M SOEC  DD PD Y 16 
Ukraine  23/07/1993  N N N N M SOEC  DA B1 Y 8 
Thailand  25/02/1994  N N N Y S SOEC  DA PD Y 0 
Hungary  13/09/1994  N N N N S SOEC  DA N/A  0 
Turkey  09/02/1995  Y N N N S SOEC  DA PD Y 6 
Netherlands  09/03/1995  N N N N M SOEC  FP  N 12 
Denmark  19/06/1997  N N N N M SOEC, 
PPoB COO FD Y 20 
Norway  19/06/1997  N N N N M PPoB COO FD Y 23 
Sweden  19/06/1997  N N N N M PPoB COO PD Y 15 
 
69 For details of this methodology, see WTO document S/C/W/270/Add.1, 30 November 2006.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 132 - 
 
  
Partner  
Date  
5th 
7th 
Cabotage 
Coop 
Designa - 
tiona 
Withhold -
ingb 
Pricingc 
Capacityd 
Stat 
ALIe 
Malaysia  09/09/1997  N N N N S SOEC  FP B1 Y 12 
Germany  29/05/1998  N N N N M COI COO PD Y 11 
India 01/12/1998  N N N N M SOEC  DA PD Y 4 
Japan  10/07/1999  N N N N M SOEC  DA PD Y 4 
Kyrgyz 
Republic  04/12/1999  Y N N N M SOEC  DA PD Y 10 
Finland  10/02/2000  N N N N M PPoB DA PD Y 12 
United 
Kingdom  01/03/2000  N N N N M SOEC  DD B1 Y 14 
Switzerland  03/03/2000  N N N Y M SOEC  FP B1 Y 16 
Hong Kong, 
China  24/05/2000  N N N N M PPoB DA PD Y 12 
Viet Nam 28/06/2000  N N N Y S SOEC  DA PD Y 10 
Philippines  04/09/2001  N N N N M SOEC  DA B1 Y 8 
Egypt  27/04/2004  N N N Y M SOEC  DA B1 Y 8 
Macao, China  27/06/2006  N N N N M PPoB DA B1 Y 16 
France  22/02/2007  N N N N M SOEC  DA B1 Y 8 
Iceland  28/03/2007  Y N N N M PPoB DA B1 Y 22 
Austria  02/10/2007  N N N Y M SOEC  COO B1 Y 11 
United Arab 
Emirates  25/11/2007  N N N Y M SOEC  FP FD Y 20 
Belarus  04/09/2013  N N N N S SOEC  DA B1 Y 4 
Cambodia  01/03/2016  N N N N M SOEC  COO PD Y 7 
Czech 
Republic  25/05/2017  N N N N M SOEC  FP PD Y 12 
Luxembourg  01/06/2017  N N N Y M SOEC   FD Y 12 
Malta  14/07/2017  N N N N M SOEC  FP  FD N 20 
Myanmar  27/09/2017  N N N Y M SOEC  DA PD Y 4 
a S = single; M = multiple.  
b SOEC = substantial ownership and effective control; PPoB = principal place of business ; COI = 
community of interest .  
c DA = double approval; DD = Dual Disapproval; COO = country of origin ; FP = free pricing . 
d PD = pre -determination; B1 = Bermuda 1, i.e. post facto  determination; FD = free determination.  
e ALI = Air Liberalization Index (0 = no liberalization; 50 = full liberalization).  
Source:  WTO Secretariat; and information provided by the authorities.  
4.187.   Mongolian air policy is based on the principle of gradual liberalization. Table 4.30 lists some 
quasi -open skies agreements (with Denmark, Iceland, Malta, Norway, and the United Arab Emirates, 
and to a lesser extent  Macau, China; and Switzerland), but they are not recent, and they cover 
destinations not served bilaterally. Code -sharing with the national airline, MIAT, is part of the state 
air policy. It is a way to reconcile two apparently contradictory effects of li beralization: the 
multiplication of routes and frequencies; and additional competition for MIAT.  
4.188.   The COVID -19 pandemic continues to have a devastating impact on the aviation sector. 
Between January 2020 and August 2020, the number of flights was down by 81.2%  compared with 
the same period in 2019 (Chart 4.9), which compares month by month the number of flights 
(domestic and international flights) in 2019 and 2020. There are currently no bankrupt airlines. The 
Government decided to exempt domestic airlines from air navigation fees and is considering the 
allocation of concessional loans to the airlines.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 133 - 
 
  Chart 4.9 Passenger flights, January to August 2019 and 2020  
 
Source:  ICAO. Viewed at: https://data.icao.int/coVID -19/operational.htm . 
4.4.4.3   Rail transport  
4.189.   Mongolia has a railway network totalling 1,962.4 km. The main line (Trans -Mongolian 
Railway) goes from Sukhbaatarto Zamyn -Uud and connects the northern ( Russian Federation) and 
southern (China) borders of Mongolia (1,110 km). The second line ("eastern line"), from Ereentsav 
to Choibalsan, connects the Dornod aimag to the Russian Federation (238 km). There are also 
several branch lines of the main line, inc luding four connecting to the major industrial areas of 
Erdenet (copper, 164 km), Baganuur (coal, 95 km), Bor -Undur (fluorspar, 60 km), and Zuunbayan 
(previously a major military base, 50 km). The Trans -Mongolian Railway has several spurs to urban 
centres and in the east, and a spur from the Trans -Siberian Railway that terminates in Choibalsan. 
Mongolian railways use Russian gauge (1,520 mm), requiring a change to standard gauge (1,435 
mm) at the border with China.  
4.190.   Mongolia relies on railways to carry freig ht and, in particular, to export mineral resources. 
As illustrated in Table 4.31, domestic freight traffic is roughly equivalent to the size of international 
traffic; within international traffic, about half of freight originates and terminates in Mongolia  and 
half is transit trade. A significant, though declining, portion of freight is transit traffic between the 
Russian Federation and China, about 90% of which is crude petroleum and timber carried to China 
for processing. Mining products accounted for abo ut 83% of freight traffic in 2019 (Table 4.32).  
Table 4.31 Key indicators of the railway transport in Mongolia, 2013 -19 
 
2013  2014  2015  2016  2017  2018  2019  
Freight turnover 
(million tonne -
kilometre s) 12,076.5  12,473.7  11,462.6  12,371.0  13,493.2  15,315.3  17,384.1  
  of which (%)  
   Domestic  30.2 28.3 25.0 18.5 18.3 18.7 18.1 
   Exports  44.0 44.8 45.8 52.7 47.6 47.7 48.3 
   Imports  9.6 8.5 9.0 7.5 8.7 9.2 8.7 
   Transit  16.1 18.4 20.3 21.2 25.4 24.4 24.9 
Carried 
passengers ('000 
persons)  3,759.7  3,305.8  2,794.7  2,645.5  2,630.3  2,572.5  2,948.0  
  of which (%)  
   International  4.5 4.7 5.1 4.3 4.0 4.6 3.8 
   Domestic  95.5 95.3 94.9 95.7 96.0 95.4 96.2 
050100150200250300350400450500
January February March April May June July AugustChart 4.[MNG]  Passenger flights, January to August , 2019 and 2020
Source:  ICAO. Viewed at: https://data.icao.int/coVID -19/operational.htm2019 2020
+34.6%
-27.3%
-97.2%-98.6%-99.3%-96.3%-89.7%-98.1%January -August 2020 
over 2019:  -81.2%WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 134 - 
 
   
2013  2014  2015  2016  2017  2018  2019  
Passenger 
turnover (million 
passenger - 
kilometres)  1,394.4  1,194.5  996.7  955.5  973.2  993.7  1,111.5  
Revenue (MNT 
million)  421,418.0  427,863.0  387,938.1  436,845.2  530,016.0  616,025.0  708,624.2  
Source:  Mongolian Statistical Information Service, Transportation . Viewed at: 
http://www.1212.mn/stat.aspx?LIST_ID=976_L12.  
Table 4.32 Composition of the railway freight traffic, 2013 -19 
  2013  2014  2015  2016  2017  2018  2019  
Domestic and overseas 
freight ('000 tonnes)  .. .. 14,869.0  15,632.9  17,371.3  19,599.2  21,309.6  
  of which (%)  
  Mining products  .. .. 80.0 88.6 86.6 84.7 83.2 
   Coal .. .. 43.5 42.8 47.1 45.0 40.1 
   Oil and petroleum 
products  .. .. 1.0 1.5 3.4 3.3 2.6 
   Fluor and spar 
concentrates  .. .. 1.9 1.6 1.8 2.8 3.2 
   Copper and 
molybdenum 
concentrates  .. .. 4.1 4.3 3.8 3.4 3.1 
   Iron ore  .. .. 28.3 36.7 29.5 29.5 33.4 
   Zinc concentrates  .. .. 0.6 0.8 0.7 0.6 0.6 
   Others  .. .. 0.7 0.9 0.2 0.1 0.1 
  Construction materials  .. .. 3.2 6.6 6.8 8.3 9.9 
  Wood and wood 
materials  .. .. 0.6 0.5 0.5 0.6 0.6 
  Food consumer 
products  .. .. 0.9 0.9 1.1 1.0 0.9 
  Perishable products  .. .. 0.3 0.1 0.1 0.1 0.1 
  Agricultural products  .. .. 0.9 0.5 1.5 1.3 1.5 
  Black iron (scrap, rail)  .. .. 1.0 0.5 0.7 0.9 1.2 
  Factory machines, 
equipment and tools  .. .. 0.1 0.1 0.1 0.2 0.1 
 Other  .. .. 2.9 2.3 2.6 2.9 2.5 
.. Not available.  
Source:  Mongolian Statistical Information Service, Transportation . Viewed at: 
http://www.1212.mn/stat.aspx?LIST_ID=976_L12.  
4.191.   Most of these indicators show a declining or stable trend for rail traffic, except for 
international exit freight (exports), which increased due to exports of minerals.  
4.192.   The MRTD is responsible for developing policy and legislation regarding railways.  The 
Mongolian Railway Authority is the railways regulator. It has the authority to issue licences for the 
construction of new railways. The Railway Traffic Control Cent er (RTCC) is a state -owned entity 
governed by the MRTD. It was established in 2012 with the aim of coordinating rail traffic between 
public and private rail operators. However, due to lack of technical capacity, the RTCC has not been 
able to manage the public and private railway operators' traffic.  
4.193.   Three railway operators exist in Mongolia: U BTZ Mongolian -Russian joint -stock venture, MTZ 
State Shareholding Company, and Bold Temur Eruu Gol ( BTEG) (a privately owned company).  
4.194.   The main carrier, UBTZ, which operates the Trans -Mongolian Railway, is 50% owned by RZD 
of the Russian Federation, 25% b y the state -owned Erdenet MGL mining company, and 25% by the 
Mongolian Railway State Owned Shareholding Company (MTZ). The 50/50 split of ownership WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 135 - 
 
  between the Russian Federation and the Mongolian authorities dates back from the construction of 
the Trans -Mongolian Railway, from 1949 to 1956.  
4.195.   Under Government Resolution No. 82 and the 189th decree of the SPC, March 2008, the 
UBTZ is the sole operator of the railway. The UBTZ is both the infrastructure manager and the only 
transporter (carrier). It employs 14 ,046 people and owns 110 locomotives and about 3,000 wagons.   
4.196.   The second operator, the 100% state -owned MTZ, was established in 2008 to develop new 
railways in the south and east of Mongolia, and reports directly to the MRTD. Currently, it owns the 
33.4-km Tumurtei railway line,  employs around 300 people, and owns a total of 9 locomotives and 
over 300 freight wagons. MTZ is an integrated operator that manages its own infrastructure.  
4.197.   One private iron -ore mining company, the BTEG, built, owns, and operates a n 85-km railway 
freight line serving its main mine. BTEG wagons are hauled on the UBTZ network by the UBTZ.  
4.198.   The Law on Railway Transport, 2007, stipulates that railway infrastructure deemed to have 
a specially important role for the nation's economy and so ciety can be either fully state -owned or 
dominantly state -controlled, or transferred to state holding after a defined time. Such a 
determination is made by the Government. Other railways can be built and owned by either public 
or private entities.  
4.199.   The Stat e Policy on Railway Transportation is defined in Parliamentary Resolution No. 32 of 
24 June 2010. It sets out a project for railway construction of 1,100 km in the first phase, 900 km 
in the second, and 3,600 km in the third. In June 2018, Parliamentary Re solution No. 73 "Paths to 
develop the coal mining on intensifying activities in Tavantolgoi" instructed the Government to 
intensify activities on the railway project between the Tavantolgoi coal deposit and Gashuunsukhait. 
Following the Resolution, the Gov ernment sped up the Tavantolgoi -Gashuunsukhait and Tavantolgoi -
Zuubayan projects.  
4.200.   The Tavantolgoi -Zuunbayan railway project is managed by MTZ SSC and constructed with 
local resources. According to the construction plan, the Tavantolgoi -Zuunbayan project w ill be 
completed in 2021. Construction from Tavantolgoi to the Gashuunsukhait border terminal by the 
Tavantolgoi railway company (established in 2018, with a 66%/34% share between Erdenes 
Tavantolgoi mining company and MTZ SSC, respectively) stopped in 201 5, but has now resumed. 
The Tavantolgoi -Gashuunsukhait project is expected to be completed in 2022. The railway operators 
that will work on the two new lines have not been determined.  
4.4.4.4   Road transport  
4.201.   Because Mongolia has a large territory, difficult climatic conditions, and a low -density 
population, the road network is relatively underdeveloped. As illustrated by Table 4.33, a large effort 
to construct new paved roads took place during the review perio d (from 5,838 km in 2013 to 
9,780  km in 2019, i.e. +67%). While passenger traffic measured in million passenger -kilometres 
grew approximatively apace (+54%), road freight traffic measured in million tonne -kilometre s grew 
by 242%, and the number of vehicles  has tripled.  
Table 4.33 Road transport selected indicators, 2013 -19 
 2013  2014  2015  2016  2017  2018  2019  
Paved roads  km 5,838  6,461  7,125  7,456  8,431  9,023  9,780.6  
Gravel roads  km 1,864  1,782  1,715  1,696  1,308  1,207  1,207.9  
Tracks  km 1,172  1,184  971 972 614 604 604.9  
Total km 8,875  9,428  9,812  10,126  10,355  10,835  11,593.40  
Freight carried  '000 tonnes  21,321  23,514  13,043  20,406  31,212  42,033  40,848.75  
Million tonne -
kilometres 2,555  4,936  2,374  4,236  5,661  6,640  6,203.78  
Passengers 
carried  Million  303 340 256 260 212 193 168.44  
Million 
passenger -
kilometres 1,897  2,793  1,940  1,959  2,040  2,919  2,925.09  
Source:  Information provided by the authorities.  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 136 - 
 
  4.202.   A large portion of vehicles are imported second -hand, principally from Japan, despite the 
fact that these vehicles are right -hand-drive while traffic in Mongolia drives on the right. The import 
of second -hand vehicles contributes to the large portion (nearl y half) of cars and trucks over 11  years 
old. 
4.203.   The MRTD is responsible for developing policy and preparing legislation on roads and road -
based transport. Government policy is set out in a number of documents, including the National 
Development Strategy, 2007 -21; the National Transport Strategy for Mong olia; the Transit Mongolia 
programme; the Mongolian Road Master Plan, 2008 -20; and the 15 -year investment programmes 
developed by the MRTD.  
4.204.   Since the early 2000s, the Government's roads policy has focused on the construction of five 
north -south highways a nd one east -west highway, including the Mongolian sections of the Asian 
Highway Network and the Central Asia Regional Economic Cooperation (CAREC) corridors. Paved 
access roads from provincial urban centres to the main road network are also being construct ed. 
4.205.   Licences for passenger and freight transport are granted by the MRTD on the basis of full 
national treatment.  
4.206.   For freight transport, the criteria of delivery are based only on technical requirements. No 
financial capacity requirements exist for interna tional freight. There are no specific limits on market 
share in road transport, and the Competition Law does not include exceptions for the road transport 
subsector. There are no regulations on pricing for freight, but there is  a non-compulsory 
administrat ive guidance on how to determine the price for freight . 
4.207.   For passenger transport licences, the transport company and the Ministry have to agree on 
the transport route, schedule, and type of vehicles to be included  in the licence. Issues relating to 
passenge r transport in Ulaanbaatar, including pricing, are regulated by the city's transport 
department.  Apart from four public -transport companies operating in and around Ulaanbaatar, all 
road transport enterprises are private sector entities that receive compens ation from public 
authorities for social tariffs . Mongolia is implementing an e -payment system for public transportation 
services through a PPP.  Uber-type services are being developed.  Taxi service orders are received 
and serviced through call centres. Tax i call centres can be operated on a standalone basis or by a 
carrier. The ticket prices for intercity public transportation are determined  by the National Road 
Transport Service Center,  which is part of the MRTD.  
4.208.   International licences for both passenger a nd freight transport are subject to the terms of 
the transport agreement between Mongolia and the partner country . Mongolia has a network of 
11 bilateral road transport agreements with Belarus, China, Hungary, Kazakhstan, the Democratic 
People's Republic o f Korea, Kyrgyz Republic, Latvia, Lithuania, the Russian Federation, Turkey, and 
Ukraine.  All of these Agreements regulate both freight and passenger transport,  and are based on 
50/50 key of repartition. Mongolia is a member of the Convention on the Intern ational Transport of 
Goods under Cover of TIR Carnets (TIR Convention), the Convention on the Contract for the 
International Carriage of Goods by Road, the Convention on Road Traffic, and the Convention on 
Road Signs and Signals.  
4.209.   Mongolia has not undertake n any commitments on road transport under the GATS or in its 
unique FTA with Japan.  
4.4.4.5   Maritime transport  
4.210.   Although Mongolia is a landlocked country, it instituted an open shipping registry, through 
its Maritime Law, 1999, with no nationality requirements in terms of ownership and crew, including 
officers. The Law was amended once, in 2007, in order to establish the Mongolian Maritime 
Administration (MMA), improve and monitor ship registration, and approve the regulation of ship 
registration pr ocedures. A new amendment was discussed at a Government meeting at the end of 
2019, and will soon be discussed by Parliament.  
4.211.   In 2018, the fleet registered under the Mongolian flag represented 0.03% of the world fleet, 
and was essentially composed of oil tankers and general cargo ships (Chart 4.10).  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 137 - 
 
  Chart 4.10 Fleet by type of ship, 2013 -19 
 
Source:  UNCTADstat Data Center. Viewed at:  
https://unctadstat.unctad.org/CountryProfile/MaritimeProfile/en -GB/496/index.html . 
4.212.   While the number of ships registered remained largely stable during most of  the period, 
tonnage has declined  (Table 4.34) . Compared to 2015, when where the highest level was registered, 
tonnage was one third of that level in 2018 and 2019, due to the exit of several large -capacity oil 
tankers.  Certain interests outside Mongolia h old beneficial ownership in this tonnage: Singapore , 
31.2%; Malaysia , 14.61%; Panama , 6.59%; and Hong Kong, China , 6.3%.  
Table 4.34 Carrying capacity by type of ship, 2013 -19 
('000 of dead weight tonnes)  
 2013 2014  2015  2016  2017  2018  2019  2020 
(1st 
half)  
Total fleeta 684 964 2,232  2,211  1,280  665 733 608.6  
Oil tankers  80 529 1,746  1,778  861 273 337  
Bulk carriers  288 160 175 128 120 78 53  
General cargo  217 207 230 208 182 211 196  
Container ships  16 23 23 36 27 27 29  
Other types of ships  83 45 58 61 89 76 118  
a Propelled seagoing merchant vessels of 100GT and above, on 1 January.  
Source:  UNCTAD stat, Maritime Profile: Mongolia , viewed at:  
 https://unctadstat.unctad.org/CountryProfile/MaritimeProfile/en -GB/496/MaritimeProfile496.pdf .  
4.213.   The register is managed by the Mongolian Ship Registry Company LLC, which is owned by 
Mongolian (70%) and Singaporean interests (30%).  
4.214.   Mongolia has not undertaken any maritime transport commitments under the GATS. 
However, in its FTA with Japan, it has fully committed modes 1, 2, and 3 for passenger and freight 
transportation, rental of vessels with crew, repair of vessels, pushing and to wing services, and 
supporting services for maritime transport.  
050100150200250300
2013 2014 2015 2016 2017 2018 2019
Oil tankers Bulk carriers General cargo Container ships Other types of shipsChart 4.X  Fleet by type of ship, 2013 -19
(Number of seagoing merchant vessels of 100GT and above)
Source:  UNCTADSTAT, Data center, viewed at: https://unctadstat.unctad.org/wds/TableViewer/tableView.aspxWT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 138 - 
 
  4.4.5   Tourism  
4.215.   Mongolia 's unique natural landscapes, culture, and prevalent nomadic lifestyle are strong 
assets of the tourism sector, making it an attractive destination for outdoor and adventure sp orts, 
including trekking, horse and camel riding, hunting, and fishing. The sector could be an engine for 
inclusive economic growth and poverty reduction, if developed in accordance with sustainable 
development principles and guided by national policy obje ctives.  
4.216.   The tourism sector is greatly constrained by insufficient air, road, and rail transport 
infrastructure . Deteriorating road conditions make it difficult to access remote locations, while the 
limited number of airports and flights restricts international connectivity, preventing the further 
development of tourism. The sector suffers from the lack of unified marketing strategy, which 
translates into less connectivity with, and visibility in, international markets. The lack of enforcement 
of sustainability laws has started to threaten the environmental ecosystem. Tourism is a highly 
seasonal sector, and is ther efore not attractive as a career option, resulting in a cycle of low 
expertise, tourist inflow, and employability. The Government took steps to overcome these 
obstacles, such as the Nomadic by Nature campaign by the Ministry of Environment and Tourism 
and the Government 's Action Program, 2016 -20, to increase the competitiveness of the sector.  
4.217.   In spite of these structural obstacles, the sector grew notably during the review period. 
Table  4.35 shows the main indicators of the tourism services sector (prior to  the COVID -19 
pandemic, which has dramatically affected the tourism sector, and whose impact is described 
separately). The number of tourists globally grew during the review period, and their expenditures 
more than doubled between 2014 and 2018. Almost all  inbound tourists came from Asia -Pacific and 
Europe, and leisure tourists (as opposed to those travelling for personal or business purposes) 
represented about half of this contingent and about half of the expenditures.  
Table 4.35 Main indicators of tourism services, 2014 -19 
Basic data and indicators  Units  2014  2015  2016  2017  2018  2019  
Inbound tourism        
 
Arrivals        
 
Total ('000)  393 386 404 471 529 577 
Overnight visitors (tourists)  ('000)        
Same -day visitors (excursionists)  ('000)  .. .. .. .. .. .. 
  of which, cruise passengers  ('000)  .. .. .. .. .. .. 
Arrivals, by region        
 
Total ('000)  393 386 404 471 529 577 
Africa  ('000)  0.8 0.8 0.7 0.9 1.0 0.98 
Americas  ('000)  18 19 21 23 24 25 
East Asia and the Pacific  ('000)  238 229 229 266 296 323 
Europe  ('000)  134 135 151 177 204 220 
Middle East  ('000)  0.7 0.8 0.9 1.0 1.3 0.7 
South Asia  ('000)  2 2 3 3 4 5 
Other not classified  ('000)  .. .. .. .. .. .. 
  of which, nationals residing abroad  ('000)  .. .. .. .. .. .. 
Arrivals, by main purpose        
 
Total ('000)  393 386 404 471 529 577 
Personal  ('000)  261 292 325 415 475 .. 
  Holidays, leisure, and recreation  ('000)  123 121 150 191 222 .. 
  Other personal purposes  ('000)  138 171 174 224 253 .. 
Business and professional  ('000)  132 95 79 54 54 .. 
Expenditure        
 
Total USD 
million  257 279 379 462 526 607 
Travel  USD 
million  215 246 316 396 461 .. 
Passenger transport  USD 
million  42 33 63 66 65 .. WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 139 - 
 
  Basic data and indicators  Units  2014  2015  2016  2017  2018  2019  
Expenditure, by main purpose of trip  USD 
million       
 
Total USD 
million  215 246 316 396 461 .. 
Personal  USD 
million  209 240 290 360 417 .. 
Business and professional  USD 
million  6 6 26 36 44 .. 
Tourism industries        
 
Number of establishments        
 
Total Units .. .. .. .. .. .. 
Accommodation for visitors  Units .. .. .. .. .. .. 
  of which, hotels and similar 
establishments  Units 318 324 358 328 374 620 
Food- and beverage -serving activities  Units .. 762 829 743 876 .. 
Passenger transportation  Units .. .. .. .. ..  
Travel agencies and other reservation  
services activities  Units .. .. .. .. .. 318 
Other tourism industries  Units .. .. .. .. .. .. 
Accommodation for visitors in hotels 
and similar establishments        
 
Non-monetary data        
 
Number of establishments  Units 318 324 358 328 374 620 
Number of rooms  Units 6,227  6,831  7,250  6,726  8,215  .. 
Employment        
 
Number of employees, by tourism 
industry        
 
Total ('000)  12.3 13.7 13.9 13.7 16.2 .. 
Accommodation services for visitors 
(hotels and similar establishments)  ('000)  4.6 4.9 4.8 4.5 5.3 .. 
Other accommodation services  ('000)  .. .. .. .. .. .. 
Food- and beverage -serving activities  ('000)  7.7 8.8 9.2 9.2 11.0 .. 
Passenger transportation  ('000)  .. .. .. .. .. .. 
Travel agencies and other reservation  
services activities  ('000)  .. .. .. .. .. .. 
Other tourism industries  ('000)  .. .. .. .. .. .. 
.. Not available.  
Source:  UN World Tourism Organization; the MET; and information provided by the authorities.  
4.218.   The number of hotels and food - and beverage -serving establishments grew consistently 
during the review period, as did the number of beds available. The data on employment are limited 
to hotels and food - and beverage -serving establishments. Employment grew from 12,000 persons 
in 2014 to 16,200 in 2018, with food - and beverage -serving establishments representing two thirds  
of the total . 
4.219.   Figures computed by the World Travel & Tourism Council on the direct and indirect weight 
of the tourism sector are very important, because they evaluate the total contribution of travel and 
tourism to the economy.70 According to the data, travel and tourism accounted for 7.2% of GDP and 
7.65% o f employment in 2019 (with 88,700 direct and indirect jobs), and value -added in the travel 
and tourism sector grew by 11.9% in 2019, when the GDP growth of the economy was 5.6%. In the 
same year, international visitor spending represented 6.8% of total exp orts (three quarters of which 
was leisure spending, and the remainder was business spending).  
4.220.   The main regulatory authority of the tourism sector is the Ministry of Environment and 
Tourism. Alongside the Ministry, the Tourism Council, a consultative body u nder the Prime Minister, 
gives advice, draws conclusions, and delivers opinions to the Prime Minister regarding the 
elaboration and implementation of state -integrated tourism policies. The Council comprises a 
 
70 World Travel & Tourism Council. Economic Impact Reports . Viewed at: 
https://wttc.org/Research/Economic -Impact . WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 140 - 
 
  chairperson; one member proposed separately by the state central administrative departments in 
charge of finance, the budget, the infrastructure, and the environmental matters; and three tourism 
organization members proposed by a non -governmental tourism organization. The chairperson and 
members are ap pointed by the Prime Minister. Aimag governors may, taking into consideration the 
demand for tourism development, designate a unit or an official to be responsible for local tourism 
matters.  
4.221.   The MET is drafting a new law relating to tourism, providing for a fund to help: (i) finance 
expenses to develop infrastructure; (ii) promote Mongolia as a destination, both domestically and 
internationally; (iii) eliminate possible negative tourism impacts on the environment; (iv) restore 
cultural properties; and (v) p rotect and cultivate historical, cultural, and natural heritage. The 
tourism fund will be a component of the state central budget. It will be administered by the Ministry; 
the budgetary allotment is not yet known.  
4.222.   The main sectoral legislation is the Tourism Law, which was passed by Parliament in 2000. 
The Law defines an open market access regime that encourages investment, notably foreign 
investment, in the sector. The latest amendments abolished licences for tourism businesses, and 
exempted from  VAT services provided by tour operators for expatriate visitors . Article  11.1 of the 
Law foresees the possibility of tax exemptions for legal entities in order to boost foreign investment 
in the sector. In addition, the Enterprises Income Tax Law stipulates that, in the free zones, entities 
that invest more than USD 300,000 to build hotels and tourist resorts, or to develop the export 
production industry, may benefit from a tax e xemption of up to 50% of the investment.  
4.223.   The liberal regime is fully bound multilaterally, as the Government undertook full 
commitments in all tourism sectors (hotels and restaurants, travel agencies and tour operators, and 
tourist guides), and it echoed t his liberalization in its EPA with Japan.71 
4.224.   The new State Policy on Tourism was approved by the Government in August 2019. Its 
objectives are to improve the competitiveness of Mongolian tourism products, create jobs through 
improving tourism services and products, enhance the livelihoods of citizens, and maximize tourism's 
benefits to the economy and society.  The Ministry 's annual budget includes an allotment for 
implementing the Policy.  
4.225.   One such Policy instrument is the Green Loan initiative , which was developed in 2019 in 
association with commercial banks to help the accommodation industry achieve environmentally 
friendly solutions for heating and for used -water disposal, and to increase the accommodation 
capacity. The annual interest of a G reen Loan is 8%, after state subsidies. In 2020, the Ministry 
allocated MNT 500 million for Green Loan subsidies.  
4.226.   Another Policy instrument is the nationwide capacity -building training programme for the 
tourism and hospitality service industry, which was d elayed due to the COVID -19 pandemic and 
finally took place from 15 September through 10 October 2020. The budget for this nationwide 
training is MNT 550 million.  
4.227.   Chart 4.11 shows the decline of tourist arrivals since the beginning of the COVID -19 
pandemic.  It has had a devastating effect on the tourism sector, reducing activity to virtually zero. 
From January to September  2020, total arrivals declined by 89.3%, and tourism receipts fell by 
58.2% for the first quarter of 2020, and by 98.1% for the second qua rter (latest available) .72 
 
71 For a list of the complete commitments, see Ministry of Foreign Affairs of Japan, Annex  6 referred to 
in Chapter 7, Schedules of Specific Commitments and L ist of Most -Favoured -Nation Treatment Exemptions, 
Part 1, Schedules of Specific Commitments in relation to Article  7.7, 1A: Schedule of Japan , p. 649. Viewed at: 
https://www.mofa.go.jp/files/000067 722.pdf . 
72 UNWTO, International Tourism and COVID -19. Viewed at: https://www.unwto.org/international -
tourism -and-covid-19. WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 141 - 
 
  Chart 4.11 International tourism arrivals ('000), January to September, 2019 and 2020  
 
Source:  UNWTO. Viewed at: https://www.unwto.org/international -tourism -and-covid-19. 
4.228.   To tackle the impact of the COVID -19 pandemic, the Government implemented three 
measures. First, from 1 April 2020 to 1 October  2020, business entities, including those in the 
tourism sector, were exempted from social insurance contributions, income tax was not be levied on 
salaries, and business entities with annual revenue of under MNT 1.5 billion (about USD 540,000) 
were exempt ed from business income taxation.  
4.229.   Second, from April to June 2020 a monthly relief lump sum of MNT 200,000 was given to 
employees of the business entities affected by the economic downturn.  
4.230.   Third, the MET is working on a scheme to expand and lower the inte rest rate of the Green 
Loan initiative mentioned above.  
050100150200250300
Q1 Q2 Q3Chart 4.[MNG]  International tourism arrivals (thousands) , January to September , 2019 and 2020
Source:  UNWTO. Viewed at: https://www.unwto.org/international -tourism -and-covid -192019 2020
-52.0%
-95.7%January -September 
2020 over 2019:  
-89.3%
-96.6%WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 142 - 
 
  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports, by HS section and major HS chapter, 2013 -19 
HS section/chapter/subheading  2013  2014  2015  2016  2017  2018  2019  
Total exports (USD million)  4,269.1  5,774.3  4,669.3  4,916.3  6,200.6  7,011.8  7,619.8    
(% of total exports)  
01 Live animals and products  0.6 0.3 0.6 0.6 1.1 1.5 1.3 
02 Vegetable products  0.2 0.4 0.8 1.1 1.1 0.3 0.2 
03 Fats and oils  0.00 0.00 0.00 0.01 0.01 0.01 0.01 
04 Prepared food, beverages, and tobacco  0.3 0.2 0.3 0.2 0.4 1.3 0.8  
1602 Prepared or preserved meat, 
meat offal, or blood  0.00 0.00 0.01 0.03 0.14 1.13 0.66 
05 Mineral products  81.9 83.0 78.8 70.9 79.6 86.6 83.7  
25 Salt, sulphur, earth and stone, 
plastering materials, cement  2.0 1.3 1.4 1.2 1.4 2.7 2.7 
 
2529 Fluorspar  2.0 1.2 1.4 1.2 1.4 2.7 2.7  
26 Ores, slag, and ash  41.3 55.8 57.0 42.9 35.5 38.1 35.3  
2601 Iron ores and concentrates  15.3 7.7 4.9 5.1 5.1 4.9 7.6  
2603 Copper ores and concentrates  22.2 44.6 48.8 32.7 26.0 28.7 23.6  
2608 Zinc ores and concentrates  2.8 2.0 2.2 3.0 2.9 2.8 2.5  
27 Mineral fuels and oils  38.7 25.9 20.3 26.8 42.7 45.8 45.7  
2701 Coal  26.1 14.7 11.9 19.8 36.4 39.7 40.3  
2709 Petroleum oils and oils obtained 
from bituminous minerals; crude  12.1 11.0 8.3 6.9 6.0 5.6 4.8 
06 Chemicals and products thereof  0.01 0.01 0.01 0.03 0.02 0.02 0.03 
07 Plastics and rubber  0.07 0.04 0.05 0.15 0.05 0.02 0.02 
08 Raw hides and skins; leather, furskins, 
and articles thereof  0.8 0.6 0.7 0.6 0.4 0.2 0.2 
09 Wood, cork, straw  0.01 0.01 0.01 0.01 0.01 0.01 0.01 
10 Pulp of wood; paper and paperboard  0.00 0.00 0.00 0.00 0.00 0.00 0.00 
11 Textiles and textile articles  6.6 5.9 6.5 6.1 5.4 5.8 5.7  
51 Wool, fine or coarse animal hair  6.0 5.4 5.9 5.4 4.7 5.2 4.9  
5102 Fine or coarse animal hair, not 
carded or combed  4.5 4.1 4.6 4.3 3.7 4.0 4.0 
 
510211 … of kashmir (cashmere) 
goats  4.5 4.0 4.5 4.3 3.6 4.0 3.9 
12 Footwear, headgear, etc.  0.03 0.02 0.03 0.04 0.04 0.03 0.03 
13 Articles of stone, plaster, cement  0.00 0.00 0.00 0.00 0.00 0.00 0.00 
14 Precious stones and metals  7.3 7.0 9.0 15.5 9.6 2.1 5.5  
7108 Gold, unwrought or in semi -
manufactured form, or in powder form  7.3 7.0 9.0 15.4 9.6 2.1 5.5 
15 Base metals and articles thereof  0.5 0.8 1.5 1.8 1.6 1.3 1.0  
7403 Copper; refined and copper 
alloys, unwrought  0.4 0.7 1.4 1.5 1.5 1.2 0.9 
16 Machinery, electrical equipment  1.1 1.0 1.2 1.5 0.4 0.4 0.5 
17 Transport equipment  0.5 0.6 0.4 1.4 0.3 0.4 1.0 
18 Precision equipment  0.04 0.06 0.06 0.02 0.02 0.06 0.02 
19 Arms and ammunition  0.00 0.00 0.00 0.00 0.00 0.00 0.00 
20 Miscellaneous manufactured articles  0.05 0.04 0.04 0.05 0.04 0.03 0.03 
21 Works of art, etc.  0.00 0.00 0.00 0.00 0.00 0.00 0.00 
Source:  WTO calculations, based on the UN Comtrade Database, and on data provided by the authorities 
(2019).  
  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 143 - 
 
  Table A1. 2 Merchandise imports, by HS section and major HS chapter, 2013 -19 
HS Section/chapter/subheading  2013  2014  2015  2016  2017  2018  2019  
Total imports (USD million)  6,357.8  5,131.5  3,796.6  3,339.6  4,337.3  5,874.8  6,127.4    
(% of total imports)  
01 Live animals and products  1.0 0.0 1.1 1.2 1.3 1.2 1.3 
02 Vegetable products  1.1 1.0 2.1 3.3 1.8 2.3 1.5 
03 Fats and oils  0.6 0.6 0.7 0.8 0.7 0.6 0.5 
04 Prepared food, beverages, and tobacco  6.5 7.5 8.7 9.9 8.7 7.4 7.3 
05 Mineral products  27.3 28.5 24.7 21.1 22.8 22.6 22.4  
27 Mineral fuels and oils  25.6 26.5 23.0 20.4 22.4 22.4 22.2  
  2710 Petroleum oils other than crude  22.2 22.5 18.6 15.3 18.2 18.9 19.0 
06 Chemicals and products thereof  4.7 6.0 7.1 8.1 7.3 6.3 6.0  
30 Pharmaceuticals  1.2 1.6 1.9 2.7 2.2 2.0 1.8 
07 Plastics and rubber  3.7 4.0 3.7 4.1 4.2 3.9 4.2  
39 Plastics and articles thereof  1.9 2.3 2.2 2.3 2.2 2.2 2.3 
08 Raw hides and skins; leather, furskins, and 
articles thereof  0.1 0.1 0.1 0.2 0.2 0.1 0.1 
09 Wood, cork, straw  0.7 1.1 1.1 0.9 0.9 0.6 0.7 
10 Pulp of wood; paper and paperboard  1.0 1.1 1.2 1.4 1.2 1.0 0.9 
11 Textiles and textile articles  1.1 1.3 1.5 1.9 1.7 1.5 1.4 
12 Footwear, headgear, etc.  0.2 0.3 0.3 0.4 0.4 0.3 0.3 
13 Articles of stone, plaster, cement  2.2 2.8 2.8 2.5 1.9 1.9 2.3 
14 Precious stones and metals, pearls  0.0 0.1 0.0 0.0 0.0 0.0 0.0 
15 Base metals and articles thereof  8.7 10.5 9.8 6.3 7.7 9.2 8.8  
72 Iron and steel  3.2 3.9 2.8 1.5 1.9 2.6 3.2  
73 Articles of iron and steel  4.6 5.5 5.1 3.8 4.8 5.5 4.8 
16 Machinery, electrical equipment  21.9 19.2 20.7 20.4 21.2 21.9 20.2  
84 Machinery and mechanical appliances, 
and parts thereof  15.1 12.6 13.6 11.2 12.8 13.6 14.2 
 
85 Electrical machinery and parts thereof  6.8 6.6 7.1 9.1 8.4 8.3 6.1 
17 Transport equipment  15.7 12.0 9.7 13.0 14.4 15.3 19.0  
87 Vehicles and parts thereof  13.0 9.7 9.4 11.9 12.8 14.1 16.2  
  8703 Motor vehicles for the transport of 
persons  5.9 5.6 5.5 6.6 6.0 6.9 6.8 
 
  8704 Motor vehicles for the transport of 
goods  4.8 2.1 1.3 1.4 4.4 4.8 6.9 
18 Precision instruments  1.4 1.8 2.3 1.8 1.4 1.8 1.5 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  1.9 2.1 2.3 2.6 2.2 1.9 1.5 
21 Works of art, collectors' pieces and antiques  0.0 0.1 0.1 0.0 0.0 0.0 0.0 
Source:  WTO Secretariat calculations, based on the UN Comtrade Database, and on data provided by the 
authorities (2019).  
  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 144 - 
 
  Table A1. 3 Merchandise exports, by destination, 2013 -19 
  2013  2014  2015  2016  2017  2018  2019  
Total exports (USD million)  4,269.1  5,774.3  4,669.3  4,916.3  6,200.6  7,011.8  7,619.8   
(% of total)  
Americas  3.3 0.3 0.4 0.3 0.2 0.1 0.4 
United  States  0.1 0.3 0.4 0.2 0.1 0.1 0.3 
Other America  3.2 0.0 0.0 0.1 0.0 0.0 0.0 
Canada  3.2 0.0 0.0 0.1 0.0 0.0 0.0 
Europe  6.8 9.2 11.0 17.9 11.8 3.7 5.8 
EU-28 6.7 8.7 8.6 17.8 11.7 3.6 4.8 
United Kingdom  4.7 6.9 7.2 16.0 10.7 2.5 3.8 
Italy 1.2 0.9 0.9 0.7 0.7 0.8 0.6 
Germany  0.4 0.3 0.2 0.9 0.2 0.2 0.2 
France  0.2 0.2 0.2 0.1 0.1 0.1 0.1 
Austria  0.1 0.0 0.0 0.0 0.0 0.1 0.0 
EFTA 0.1 0.5 2.4 0.0 0.0 0.0 1.0 
Switzerland  0.1 0.5 2.3 0.0 0.0 0.0 1.0 
Other Europe  0.0 0.0 0.0 0.0 0.0 0.1 0.0 
Turkey  0.0 0.0 0.0 0.0 0.0 0.1 0.0 
Commonwealth of independent 
states (CIS)  1.6 1.2 1.7 1.2 1.1 1.3 1.0 
Russian Federation  1.4 1.1 1.6 1.1 1.1 1.2 0.9 
Kazakhstan  0.0 0.1 0.0 0.0 0.0 0.1 0.1 
Africa  0.1 0.0 0.0 0.0 0.0 0.0 0.0 
Middle East  0.3 0.4 0.3 0.2 0.2 0.2 0.3 
Iran 0.0 0.0 0.0 0.0 0.1 0.1 0.3 
Asia 87.9 88.9 86.5 80.5 86.7 94.7 92.5 
China  86.7 87.8 83.5 79.0 85.0 92.8 88.9 
Japan  0.2 0.4 0.4 0.3 0.2 0.4 0.2 
Other Asia  1.0 0.7 2.6 1.2 1.5 1.5 3.4 
Singapore  0.2 0.2 0.6 0.3 0.4 0.4 2.0 
Australia  0.2 0.0 0.1 0.0 0.1 0.0 0.5 
Korea, Republic of  0.3 0.2 1.4 0.2 0.2 0.3 0.4 
Chinese Taipei  0.0 0.0 0.0 0.2 0.4 0.4 0.1 
Viet Nam 0.0 0.1 0.1 0.1 0.0 0.1 0.1 
Hong Kong, China  0.1 0.1 0.3 0.2 0.2 0.2 0.1 
Thailand  0.0 0.0 0.0 0.1 0.0 0.0 0.1 
Source:  WTO Secretariat calculations, based on the UN Comtrade Database, and on data provided by the 
authorities (2019).  
  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 145 - 
 
  Table A1. 4 Merchandise imports, by origin, 2013 -19 
  2013  2014  2015  2016  2017  2018  2019  
Total imports (USD million)  6,357.8  5,131.5  3,796.6  3,339.6  4,337.3  5,874.8  6,127.4   
(% of total)  
Americas  9.7 5.0 4.0 5.4 6.2 4.9 6.4 
United  States  8.1 4.2 3.1 4.2 4.8 3.6 4.7 
Other America  1.6 0.7 1.0 1.2 1.4 1.3 1.7 
Canada  1.3 0.4 0.5 0.6 0.7 0.7 0.8 
Brazil  0.1 0.0 0.1 0.1 0.2 0.2 0.6 
Europe  12.3 9.9 10.9 12.4 2.0 10.8 10.8 
EU-28 11.4 9.0 9.8 11.2 10.9 9.8 9.6 
Germany  4.0 3.0 3.3  3.6 3.0 2.9 3.1 
Poland  1.0 0.9 1.0 1.2 1.1 1.0 1.1 
Italy 0.9 0.9 0.9 1.0 1.1 0.9 1.0 
Sweden  0.6 0.2 0.3 0.8 0.8 0.7 0.7 
France  1.0 1.0 0.7 0.6 0.7 0.7 0.6 
Austria  0.1 0.2 0.6 0.3 0.2 0.3 0.6 
United Kingdom  0.7 0.5 0.6 0.8 0.7 0.5 0.5 
EFTA 0.2 0.2 0.3 0.3 0.3 0.3 0.4 
Other Europe  0.7 0.8 0.9 0.9 0.8 0.8 0.8 
Turkey  0.7 0.7 0.7 0.8 0.7 0.7 0.7 
Commonwealth of independent 
states (CIS)  28.6 32.4 29.3 28.2 30.2 30.8 29.8 
Russian Federation  24.6 29.9 26.9  25.8 28.1 29.1 28.2 
Belarus  2.4 0.4 0.5 0.4 0.6 0.4 0.6 
Ukraine  0.9 1.3 1.0 1.0 0.6 0.7 0.5 
Kazakhstan  0.5 0.6 0.8 0.9 0.8 0.5 0.5 
Africa  0.2 0.2 0.1 0.1 0.1 0.2 0.2 
Middle East  0.1 0.1 0.1 0.1 0.1 0.1 0.1 
Asia 49.2 52.5 55.6 53.8 51.4 53.2 52.7 
China  28.1 33.1 35.8 31.1 32.6 33.5 33.2 
Japan  7.0 7.2 7.2 9.9 8.4 9.5 9.6 
Other Asia  14.1 12.2 12.5 12.8 10.4 10.1 9.9 
Korea, Republic of  8.0 6.8 6.8 5.9 4.6 4.5 4.4 
Australia  0.8 0.3 0.3 0.7 0.8 0.8 0.9 
Viet Nam 0.4 0.5 0.8 1.2 0.9 0.8 0.9 
Malaysia  1.4 1.2 1.0 1.2 0.9 0.9 0.9 
India 0.5 0.2 0.4 0.7 0.8 0.9 0.6 
Thailand  0.7 0.9 0.9 0.9 0.7 0.6 0.6 
Source:  WTO Secretariat calculations, based on the UN Comtrade Database, and on data provided by the 
 authorities (2019).  
  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 146 - 
 
  Table A1. 5 Total inward direct investment stocks, by sector , 2014 -19 
(USD million)  
Economic sector  2014  2015  2016  2017  2018  2019  
Construction  891.6  907.5  933.1  835.5  865.0  917.2  
Education services  13.0 13.0 13.6 14.2 14.5 18.3 
Processing industries  659.4  681.4  285.4  326.1  317.2  331.5  
Wholesale and retail trade; repair 
of motor vehicles and motorcycles  1,178.4  1,383.5  1,122.4  1,525.1  1,634.7  1,725.3  
Accommodation and food -service 
activities  133.1  299.8  389.1  300.5  295.1  297.9  
Information and communication  180.9  178.6  145.8  128.9  142.5  147.4  
Professional, scientific, and 
technical activities  168.5  179.5  183.6  185.7  198.2  207.2  
Activities of extraterritorial 
organizations and bodies  0.0 0.0 0.0 0.0 11.9 13.8 
Financial and insurance activities  675.1  720.4  734.0  793.6  919.0  1,026.0  
Transportation and storage  59.0 57.7 55.0 59.6 122.2  152.6  
Administrative and support service 
activities  81.0 73.9 41.9 55.0 117.7  200.5  
Arts, entertainment, and recreation  4.3 5.3 5.8 6.0 6.1 6.4 
Water supply; sewerage, waste 
management, and remediation 
activities  9.3 9.8 10.1 10.1 10.1 10.3 
Mining and quarrying  15,419.7  15,360.0  11,518.3  12,825.8  14,566.8  16,232.3  
Other service activities  552.7  593.5  599.6  650.8  676.3  693.4  
Real estate activities  135.9  142.5  146.0  164.4  180.3  179.5  
Agriculture, forestry, and fishing  58.0 61.6 64.6 69.4 72.7 77.2 
Activities of private households as 
employers and undifferentiated 
production activities of private 
households  1.7 1.9 2.1 3.4 3.4 3.5 
Health and social work  9.1 9.6 10.5 24.6 25.7 26.6 
Electricity, gas, steam, and air -
conditioning supply  16.4 16.7 16.7 41.2 42.2 43.2 
Public administration and defence; 
compulsory social insurance  0.0 0.0 0.0 0.0 1.4 1.7 
Total  20,247.0  20,696.3  16,277.5  18,019.9  20,223.0  22,555.7  
Source:  Information provided by the authorities.  
  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 147 - 
 
  Table A1. 6 Total inward direct investment inflow, by sector , 2014 -19 
(USD million)  
Economic sector  2014  2015  2016  2017  2018  2019  
Construction  124.0  76.0 70.5 55.4 21.7 59.3 
Education services  0.4 0.0 0.9 0.6 0.6 3.7 
Processing industries  29.1 29.9 24.1 33.0 43.4 24.6 
Wholesale and retail trade; repair of motor 
vehicles and motorcycles  292.6  101.5  111.5  297.1  143.2  198.4  
Accommodation and food -service activities  4.8 170.8  144.9  23.5 10.2 16.5 
Information and communication  19.4 30.7 10.5 4.8 7.6 7.3 
Professional, scientific, and technical activities  11.3 15.3 12.1 5.9 16.6 59.1 
Activities of extraterritorial organizations and 
bodies  0.0 0.0 0.0 0.0 12.1 1.9 
Financial and insurance activities  117.4  72.0 73.0 53.6 224.4  146.2  
Transportation and storage  8.1 6.3 6.7 41.2 1.7 34.1 
Administrative and support service activities  13.1 3.4 4.1 13.0 24.6 84.8 
Arts, entertainment, and recreation  1.3 1.1 1.0 0.3 0.0 0.5 
Water supply; sewerage, waste management, 
and remediation activities  0.1 0.6 0.7 0.0 0.0 0.2 
Mining and quarrying  1,271.7  789.7  941.2  1,442.4  2,130.3  2,197.2  
Other service activities  66.6 78.6 53.9 42.5 64.2 39.6 
Real estate activities  18.0 14.5 22.6 20.8 20.8 19.3 
Agriculture, forestry, and fishing  11.5 4.2 5.3 5.6 3.4 4.5 
Activities of private households as employers 
and undifferentiated production activities of 
private households  0.3 0.5 0.6 1.3 0.0 0.1 
Health and social work  0.6 0.6 1.7 20.2 1.2 0.8 
Electricity, gas, steam and air -conditioning 
supply  1.0 0.6 1.2 25.1 1.4 1.3 
Public administration and defence; 
compulsory social insurance  0.0 0.0 0.0 0.0 1.4 0.4 
Total  1,991.5  1,396.3  1,486.4  2,086.3  2,728.7  2,899.9  
Source:  Information provided by the authorities.  
  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 148 - 
 
  Table A2. 1 Selected notifications to the WTO, 1 January 2015 -31 October 2020  
WTO agreement  Description  Document symbol  Date  
Agreement on Agriculture    
Articles 10 and 18.2 
(ES:2 and ES:3)  Export subsidies commitments: 
budgetary outlays and quantity 
reduction commitments; and 
notification of total exports  G/AG/N/MNG/9  04/06/2018  
Article  18.2 (DS:1)  Domestic support  G/AG/N/MNG/10  22/02/2019  
General Agreement on Trade in Services    
Article  III:4 or IV:2  Contact and enquiry points  S/ENQ/78/Rev.20  25/03/2020  
Article  V:7(a)(3)  Economic integration agreements: 
Mongolia -Japan  S/C/N/863  02/06/2016  
GATT  1994  
Article  XXIV:7(a) of 
GATT  1994 Free-trade areas: Mongolia -Japan  WT/REG373/N/1  02/06/2016  
Trade Facilitation Agreement    
Article  22.3 Contact points of the office 
responsible for coordinating trade 
facilitation -related assistance and 
support for capacity building  G/TFA/N/MNG/3  04/09/2019  
Articles 1.4, 10.6.2, and 
12.2.2  Publication  G/TFA/N/MNG/2  
G/TFA/N/MNG/2/Add.1  12/07/2019  
12/12/2019  
 
Articles 15 and 16  Category commitments  G/TFA/N/MNG/1  26/02/2018  
 
Agreement on Rules of Origin    
Article  5, and Paragraph 
4 of Annex II  Non-preferential and preferential 
rules of origin  G/RO/N/144  
G/RO/N/164  12/09/2016  
03/04/2018  
Agreement on Technical Barriers to Trade    
Article  2.9 Technical regulations  G/TNT/N/MNG/7  
G/TBT/N/MNG/9  
G/TBT/N/MNG/10  20/02/2017  
04/11/2019  
04/11/2019  
 
Article  5.6 TBT notification  G/TNT/N/MNG/8  
G/TBT/N/MNG/11  
 04/11/2019  
04/11/2019  
Source:  WTO Secretariat.  
  WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 149 - 
 
  Table A3. 1 Tariff lines where the MFN applied rate exceeds the bound rate, 2020  
HS code  Description  MFN applied 
rate Bound rate  
Fully exceeding at the 8 -digit level:    
29011000  Acyclic hydrocarbons  5% 0% 
29012100  5% 0% 
29012200  5% 0% 
29012300  5% 0% 
29012400  5% 0% 
29012900  5% 0% 
29021100  Cyclic hydrocarbons  5% 0% 
29021900  5% 0% 
29022000  5% 0% 
29023000  5% 0% 
29024100  5% 0% 
29024200  5% 0% 
29024300  5% 0% 
29024400  5% 0% 
29025000  5% 0% 
29026000  5% 0% 
29027000  5% 0% 
29029000  5% 0% 
30019000  Pharmaceutical products  5% 0% 
30021100  5% 0% 
30021200  5% 0% 
30021300  5% 0% 
30021400  5% 0% 
30021500  5% 0% 
30021900  5% 0% 
30022000  5% 0% 
30023000  5% 0% 
30031000  5% 0% 
30032000  5% 0% 
30033100  5% 0% 
30033900  5% 0% 
30034100  5% 0% 
30034200  5% 0% 
30034300  5% 0% 
30034900  5% 0% 
30036000  5% 0% 
30039000  5% 0% 
30041010  5% 0% 
30041090  5% 0% 
30042010  5% 0% 
30042090  5% 0% 
30043110  5% 0% 
30043190  5% 0% 
30043210  5% 0% 
30043290  5% 0% 
30043910  5% 0% 
30043990  5% 0% 
30044110  5% 0% 
30044190  5% 0% 
30044210  5% 0% 
30044290  5% 0% 
30044310  5% 0% WT/TPR/S/ 406/Rev.1  • Mongolia  
 
- 150 - 
 
  HS code  Description  MFN applied 
rate Bound rate  
30044390  5% 0% 
30044910  5% 0% 
30044990  5% 0% 
30045010  5% 0% 
30045090  5% 0% 
30046010  5% 0% 
30046090  5% 0% 
30049010  5% 0% 
30049090  5% 0% 
30051000  5% 0% 
30059010  5% 0% 
30059030  5% 0% 
30059040  5% 0% 
30059090  5% 0% 
30061000  5% 0% 
30062000  5% 0% 
30063000  5% 0% 
30064000  5% 0% 
30065000  5% 0% 
30066000  5% 0% 
30069200  5% 3.25%  
Partially exceeding at the 8 -digit level:    
01029000  Live bovine animals other than cattle or buffalo 
(pure -bred animals are bound at 0%)  5% 0%, 20%  
30029000  "Other" medicaments  5% 0%, 6.5%  
30069200  Waste pharmaceuticals  5% 0%, 6.5%  
38253000  Clinical waste (clinical waste of HS heading 3005 is 
bound at 0%)  5% 0%, 6.5%, 20%  
84439900  Parts and accessories of printing machinery (of HS 
heading 8471 bound at 0%)  5% 0%, 20%  
84734000  Parts and accessories of (other) office machines 
(automatic data processing machines bound at 0%)  5% 0%, 20%  
84735000  5% 0%, 20%  
85044000  Static converters  5% 0%, 20%  
85235200  "Smart cards" (cards incorporating only one 
electronic integrated circuit bound at 0%) 5% 0%, 20%  
85284200  Monitors/projectors capable of directly connecting 
to, and designed for use with, an automatic data 
processing machine of HS heading 8471  5% 0%, 20%  
85285200  5% 0%, 20%  
85286200  5% 0%, 20%  
85439000  Parts of electrical machines n.e.s. (parts for 
electronic microassemblies bound at 0%)  5% 0%, 20%  
85489000  Electrical parts of machinery or apparatus n.e.s. 
(electronic microassemblies bound at 0%)  5% 0%, 20%  
Note:  Prohibited tariff lines are not taken into account due to the unavailability of the MFN applied rate.  
Source:  WTO Secretariat, based on data provided by the authorities.  
 
__________