Mongolia WT/TPR/S/145 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Since acceding to the WTO in January 1997, Mon golia has substantially liberalized its trade 
regime.  Liberalization has, inter alia,  involved the reduction of tari ff rates and elimination of a 
number of import licensing requirements. 
2. Mongolia employs the "transaction value" method of customs valuation.  It does not use 
preshipment inspection for customs valuation purpo ses.  The tariff is Mongolia's main trade policy 
instrument.  Most imports entering Mongolia are subject to an ad valorem  duty rate of 5% (compared 
with a uniform rate of 15% in 1997).  In 2004, the simple average applied MFN tariff was 5.0%.  All 
tariff lines are bound;  the average bound rate was 18.4% in 2004.  Bound rates are higher than 
applied MFN rates for most lines, thereby according M ongolia considerable latitude to raise its tariffs 
within existing bindings.  Due to a relatively uni form tariff structure, which simplifies customs 
procedures, reduces market distortions, and enhances  transparency, there is no tariff escalation, and 
there are no tariff peaks.  Some agricultural products  (0.3% of total tariff lines) are protected by a 
seasonal rate of 15%.  Mongolia has not used any anti-dumping, countervailing or safeguard 
measures.   
3. Mongolia has a few non-tariff border measures, such as import prohibition and import 
licensing requirements.  Since Mongolia's accession to the WTO, licensing requirements have been 
substantially reduced.   
4. Certain exports from Mongolia are subject to export duties.  Export prohibitions concern 
drugs, narcotics, and certain da ngerous and poisonous chemicals.   Export taxes apply to various 
products, including raw cashmere, with a view to increasing domestic processing.  Imports of equipment for export-oriented businesses and for fo reign businesses investing in "priority sectors" are 
free of import duties.  Export-oriented companies are also exempt from VAT and excise tax;  VAT on 
gold sales (including exports) was abolished in Dece mber 2001.  The Government has adopted laws 
establishing free-trade and economic zones since 2002.  Tax holidays are granted for export-oriented 
industries. 
5. Preferences are granted to domestic suppliers with regard to government procurement.  
Mongolia is not a signatory to the WTO Agreement on Government Procurement. 
6. About 30% of Mongolian industrial standards ar e harmonized with international standards.  
More than 40% of Mongolian standards are quoted as mandatory technical regulations.  Mongolia has 
strengthened its legislation on intellectual property ri ghts, with a view to assuring compatibility with 
international agreements.  Different excise tax ra tes may apply between domestically produced and 
imported goods.  Privatization has progressed since the early 1990s.  Competition policy remains 
weak;  there are no agencies authorized to enforce competition legislation.   
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures  
7. The main legislation governing importation into  Mongolia is the Customs Law, adopted by 
Parliament in 1996, and it s implementing regulations.1  The law defines the organizational structure 
                                                      
1 The Customs Law was adopted in 16 May 1996 and entered into force on 1 July 1996;  several 
amendments have been made to the Customs Law, most recently in March 2003, and to the Customs and Tariff 
Law in April 2003.   WT/TPR/S/145 Trade Policy Review 
Page 24 
  
and legal basis of the Customs, under the Custom s General Administration of Mongolia, as well as the 
procedures of customs control and clearance and enfo rcement of the customs legislation.  Under the 
law, the importation of goods into Mongolia is subject to no restriction, except import licensing, 
which applies to a few products (see section (v)).  Im porters must register with the tax authorities;  
registration with the State Registry Office is also required for the purposes of customs clearance.   
8. Article 12 of the Customs Law delegates author ity to the Customs General Administration to 
set up regulations related to customs clearance pro cedures within the purposes of the law.  The main 
implementing regulation regarding customs clearanc e is Order No. 694 of the Head of the Customs 
General Administration2;  this Order regulates procedures for customs control and examination of 
goods and cross-border transport.   
9. The principal document for customs clearance is  the Customs Declaration Form (CDF), as 
approved by the Customs General Administration.3  Where necessary, the Customs may require an 
importer to produce other documents for the purpose of  customs clearance.  These include:  a foreign 
trade contract, an invoice, transport document, a p acking list, certificate of origin, and a licence issued 
by the competent authorities.  Documents for customs clearance must be provided in the Mongolian language;  Customs may accept a translated copy of these documents. 
10. Customs clearance documents must be submitted to the Customs at the customs frontier.  If 
Customs agrees with the submitted customs value, then the importer must pay the import duties, 
VAT, and any excise tax.  Subsequently, the Cust oms authorizes the importation of the declared 
goods. 
11. Prior declaration of customs documents is allo wed under Order No. 315 (27 October 1998), if 
a shipment contains a variety of goods, requir es rapid processing during particular seasons (e.g. 
during the harvest season and New Year), or requires special storage facilities.  Simplified procedures 
for customs declaration, which entail a reduced number of required documents, are also available 
where goods enter or leave customs bonded zones or customs special zones directly from or for 
abroad.  Accelerated procedures (Order No. 187, 15. May 2000) are applicable for certain hazardous 
goods (e.g. nuclear goods), blood and blood products, a nd donors' organs to be used for treatment 
purposes.  Accelerated procedures entail customs cl earance on the basis of ex-post completion of 
customs declaration forms.  Businesses and individuals permitted for accelerated procedures are allowed to pay customs duties and other taxes prior to the clearance.  Examination must be finished 
within eight working hours for dangerous goods re quiring special treatment (e.g. uranium and highly 
toxic chemical substances) or animals.   Since 2002, a "gold card" system has been provided for the 
best performing companies that meet certain criteria;  gold card holders are exempt from all but 
random cargo inspections. 
12. With a view to easing the administrative burden on enterprises and saving time for importers, 
an importer may designate a customs broker who goes through all documentation and other formal 
procedures on behalf of the importe r.  Regulations on the operation of customs brokers are issued by 
the Customs General Administration.  In addition,  "one-stop" services have been provided at major 
customs points.  One-stop services aim to comple te all the necessary customs documentation and 
other formal procedures in one location;  they include examination of documents by customs inspectors, customs valuation, payment of customs duties and other taxes, and customs examination. 
                                                     
 
2 The Order entered into force on 6 February 2001. 
3 The CDG was approved by Order No. 336 of the Head of the Customs General Administration, 
4 November 1998. Mongolia WT/TPR/S/145 
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13. Mongolia has introduced a national Automated System for Customs Information Management 
(GAMAS) since 2001;  the system aims to allow customs clearance and payment of customs duties 
and other taxes through an online system.4   
14. If a person considers the decision of a State Cu stoms Inspector unjustified, they may appeal 
within ten days of the decision, either to the head  of the appropriate customs branch, unit or customs 
office, or to the chief of the cu stoms house concerned.  Appeals of  decisions by heads of customs 
branches, units or offices or the director of a cu stoms house may be made to an appropriate customs 
officer of a higher-level of authority.  Decisions by the relevant higher-level official may be appealed 
in court.5   
15. The Customs Law contains provisions on temporary admission into Mongolia's customs 
territories and re-exports.  Provisions also exist for the operation of customs bonded manufacturing 
areas, customs bonded warehouses, customs bonded exhibition sites, customs bonded construction 
sites, customs special zones, and duty-free shops. 
16. The main problems facing Mongolia's customs administration are administrative and 
operational issues, including corruption and smuggling.   The authorities have taken steps to address 
these issues by introducing, inter alia , internal measures at customs (e.g. anti-corruption, anti-
smuggling), computerization of customs procedures, staff training, and capacity-building programmes 
at agencies involved in customs administration and policy making.   
(ii) Tariffs  
(a) Overview 
17. The Customs Tariff Law of Mongolia is the main legislation regulating ma tters relating to the 
customs tariff, the adoption/modification of duty rat es, customs valuation, and collection of customs 
duties.6  Tariff rates for goods crossing the border are,  in principle, approved by Parliament.  The 
Customs Tariff Council, which is established on an ad hoc  basis, makes proposals to the Government 
on matters relating to the development of the ta riff system, such as the adoption/modification of 
customs duty rates and the imposition of additiona l duties, such as anti-dumping and countervailing 
duties.  
(b) Tariff structure 
18. Mongolia adopted the Harmonized Commodity Description and Coding System (HS) on 
1 January 1993.  All subsequent changes to th e HS have been introduced into the Mongolian 
nomenclature.  Mongolia adopted HS2002 on 1 January  2002.  The current tariff schedule consist of 
5,541 lines at the HS 8-digit level:  the first six dig its refer to the common coding of the HS;  the last 
two digits are sub-divisions at the national level. 
19. According to the Customs Tariff Law, Mongolia 's customs tariff consists of general, 
most-favoured-nation (MFN) bound and applied, and pref erential rates.  Under the Law, MFN applied 
rates apply to goods from countries that offer MFN status to Mongolia, and preferential rates to goods 
originating in countries that grant tariff preferences to Mongolia;  goods originating in other countries 
are dutiable according to the general rates, which ar e double the MFN applied rates.  In practice, none 
                                                      
4 About 65% of total customs clearance is currently processed through the online network.   
5 Article 89, the Customs Tariff Law of Mongolia. 
6 The Customs Tariff Law was adopted by Parliament on 20 May 1996 and entered into force on 
1 July 1996. WT/TPR/S/145 Trade Policy Review 
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of Mongolia's trading partners are granted preferen tial tariffs and nor are ge neral tariffs applied.  
According to the Customs Tariff Law, customs duty rates can be ad valorem , specific and/or a 
combination of the two.   
20. Currently, Mongolia applies an ad valorem  MFN tariff rate of 5% to most of imported goods 
(Chart III.1).7  Before its accession to the WTO in 1997, Mongolia applied a 15% ad valorem  duty on 
the majority of imports.  Since the introduction of  the Customs Tariff Law, tariff rates have been 
changes several times.  One of these major changes included the introduction of zero tariffs for all 
imports between May 1997 and Sept ember 1999, and the imposition of 7%  rate for the majority of 
imports in 2001. 
0123456
Live animal & prod.
Vegetable products
Fats and oils
Prepared food, etc.
Mineral prod.
Chemicals & prod.
Plastic & rubber
Hides & skins
Wood & articles
Pulp, paper, etc.
Textiles & articles
Footwear, headgear
Articles of stone
Precious stones, etc.
Base metals & prod.
Machinery 
Transport equipment
Precision instruments
Arms & ammunition
Misc. manufactures
Works of art, etc.
Total Chart III.1
Average applied MFN tariff rates, by HS section, 2004
Per cent
Source :   WTO Secretariat calculations, based on da ta provided by the Mongolian authorities.
 
21. There are two other applied MFN duty rates, i.e. a zero tariff rate and a seasonal tariff rate of 
15%.  Zero rates apply to 49 tariff lines (0.9% of total lines), which include live animals for breeding, 
horses, cows, pigs, sheep, goats, information disse mination equipment and its spare parts, other 
machines for information development, transistor  diode and any similar transistors, and various 
medical equipment.  Since 2000, there have also b een some exemptions from the customs tariffs for 
various purposes, such as on equipment and goods  imported under international agreements and 
programmes for cooperation in whic h Mongolia is a party;  on heavy equipment imported for the 
"Millennium Road" project;  or for coal and energy projects (Table III.1). 
                                                      
7 The authorities note that the objectives of applying a uniform tariff rate are to simplify customs 
processes, provide incentives for the efficient production of goods, refrain from protection for individual 
domestic industries, and to have low-priced import products available in the domestic market. Mongolia WT/TPR/S/145 
 Page 27 
 
 
Table III.1 
Legislation on tariff exemptions under certain projects 
No. Legislative Act Product Coverage Date 
1. On Exemptions from Tariff on Passport Printing 
Equipment  Equipment and materials for the printing of passports 18.10.01 
2. On Exemptions from Tariff on Millenium Road   Equipment for the building of roads  18.10.01 
3. On Exemptions from Tariff & VAT on Choibalsan 
Power Station Equipment   Equipment for the power station  25.05.01 
4. On Exemptions from Tariff on Communication 
Equipment  Communication equipment  26.07.00 
5. On Exemptions from Tariff on Coal Equipmen t  Equipment, materials, appliances  06.04.00 
6. On Exemptions from Laws on State Stamp Duties & 
Customs Tariff applied to Certain Goods & Services  Equipment and materials  08.04.99 
7. On Exemptions of Tariff on ADB Road  Machines and mechanisms for the repair of roads 10.01.02 
8. On Exemptions from Tariff on IDA Transport  Dia gnostic equipment for the checking of motor vehicles, 
machines and mechanisms for the repair of roads 06.06.02 
9. On Exemptions from Tariff on KOIKA State Co m  Communication equipment and appliances 13.06.02 
10. On Exemptions from Tariff & VAT on Buses  Buses and trolley buses 31.10.02 
11. On Exemptions from Tariff on Te lecom  Communication equipment 09.10.03 
12. On Exemptions from Tariff on IDA Transport  .. 26.12.03 
.. Not available. 
Source:  Information provided by the Mongolian authorities. 
22. A seasonal import duty rate of 15% is imposed  on flour and vegetables (potatoes, onions, 
cabbage, raddish, turnips, and yellow carrots) to provide protection to domestic producers of these 
products.  The duty is imposed during the period 1 A ugust to 1 April, i.e. after the harvesting period 
of the products concerned.  Outside this  period, the applied duty rate is 5%.   
23. The Government may, at its discretion, reduce or increase a tariff rate by up to 50% of the 
rate under Mongolia's tariff schedule, upon the r ecommendation of the Customs Tariff Council in 
accordance with Articles 4 and 6 of the Customs Tariff Law. 
(c) Bound MFN rates 
24. Mongolia bound all its tariffs upon accession to th e WTO, at 20% for most tariff lines;  
certain lines are bound at different rates (Table  III.2).  The average bound MFN rate is 18.4% 
(compared with an average applied MFN rate of 5%) (Table III.3);  th e highest bound rate is 75%.  In 
theory, this gives Mongolia considerable latitude to raise its tariffs within existing bindings. 
Table III.2 
Products bound at tariff rates other than 20%  
HS code Product description Rate of duty 
 Agriculture products  
2207  Undenatured ethyl alcohol  75% 
2208  Rum, gin, vodka, liqueurs, tequila  35-50%  
2401  Unmanufactured tobacco  40% 
2402  Cigars and cigarettes  30% 
2403  Smoking tobacco  40% 
Table III.2 (cont'd)WT/TPR/S/145 Trade Policy Review 
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HS code Product description Rate of duty 
 Other products  
4203.10  Articles of apparel  30% 
5701-02  Carpets and other textile floor  coverings, knotted and woven  30% 
6103-15, 6203-04  Clothing, garments (suits, shirts, etc.)  30% 
93 Arms and ammunition  30% 
9403  Wooden furniture  30% 
Source:  Mongolian authorities. 
Table III.3 
Structure of MFN tariffs  
  2000 2002 2004 U.R.a 
1. Bound tariff lines (% of all tariff lines) 100.0 100.0 100.0 100.0 
2. Duty free tariff lines (% of all tariff lines) 0.9 0.9 0.9 1.6 
3. Non- ad valorem  tariffs (% of all tariff lines) 0.0 0.0 0.0 0.0 
4. Tariff quotas (% of all tariff lines) 0.0 0.0 0.0 0.0 
5. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 0.0 0.0 0.0 0.0 
6. Simple average bound rate 18.4 18.4 18.4 17.6 
  Agricultural products (HS01-24) 19.0 19.0 19.0 19.0 
  Industrial products (HS25-97) 18.3 18.3 18.3 17.4 
  WTO agricultural products 19.0 18.9 18.9 18.9 
  WTO non-agricultural products 18.3 18.4 18.4 15.2 
  Textiles and clot hing 21.5 21. 8 21.8 21.7 
7. "Nuisance" bound rates (% of all tariff lines)b 0.0 0.0 0.0 0.0 
8. Simple average applied rate 5.0 5.0 5.0 .. 
  Agricultural products (HS01-24) 5.1 5.1 5.1 .. 
  Industrial products (HS25-97) 4.9 5.0 5.0 .. 
  WTO agricultural products 5.1 5.1 5.1 .. 
  WTO non-agricultural products 4.9 5.0 5.0 .. 
  Textiles and clothing 5.0 5.0 5.0 .. 
9. Domestic tariff "spikes" (% of all tariff lines)c 0.0 0.0 0.0 .. 
10. International tariff "spikes" (% of all tariff lines)d 0.0 0.0 0.0 .. 
11. Overall standard deviation (SD) of tariff rates 0.5 0.5 0.5 .. 
12. "Nuisance" applied rates (% of all tariff lines)b 0.0 0.0 0.0 .. 
.. Not available. 
a Final bound calculations are based on the 2004 tariff schedule.   
b "Nuisance" rates are those greater than  zero, but less than or equal to 2%. 
c Domestic tariff spikes are defined as those exceeding th ree times the overall simple applied rate (indicator 8). 
d International tariff spikes are defined as those exceeding 15%. 
Note: For 2000, 2002, and 2004, four, three and three tariff lines, respectively, are excluded in the tariff analysis due to pr ohibition. 
  The corresponding HS codes are 22071, 2207 2 and 22089010 (22089001 and 22089002 for 2000). 
 The 2000 tariff is based on HS96;  the 2002 and 2004 tariffs are based on HS02. 
Source: WTO Secretariat calculations , based on data provided by the Mongolian authorities. 
(d) Applied MFN rates 
25. Mongolia's current (2004) average applied MFN tariff rate is 5%, unchanged since 2000 
(except in 2001, when the majority of tariff rates were increased to 7%;  the rates were decreased to 
5% in 2002).  In 2004, 0.9% of tariff lines were duty fr ee.  A tariff rate of 5% applies to 98.8% of all 
tariff lines.  The range of applied tariff rates is zero to 15%. Mongolia WT/TPR/S/145 
 Page 29 
 
 
(e) Tariff escalation, tariff ranges, and tariff peaks 
26. There is effectively no tariff escalation nor any evident tariff peaks, because of an almost 
uniform applied MFN rate of 5%. 
(f) Tariff quotas  
27. Mongolia does not maintain tariff quotas.  
(iii) Other charges affecting imports  
28. In addition to customs tariffs, the Mongolian authorities apply VAT and excise taxes on 
imported goods.  These taxes apply equally to domestically produced and imported goods. 
(a) Value-added tax 29. The VAT was introduced under the Value-added Ta x Law, which entered into force on 1 July 
1998.  The current VAT rate is 15%;  it applies to  both goods and services.  Goods sold in Mongolia, 
jobs performed and services rende red in Mongolia, and goods imported for sale, use or consumption 
in Mongolia are subject to the VAT. 
30. The General Department of National Taxation and the Customs General Administration are 
responsible for the administration of the VAT.  Any citizen or legal person e ngaged in the importation 
of goods, sale or manufacture of goods, performan ce of work, or rendering of services in Mongolia, 
with a taxable turnover of at least Tog 10 million during the preceding year, must register for VAT 
purposes.  
31. The tax base is the price determined by Customs in conformity with the Custom Tariff Law, 
plus customs duty, excise tax, and other taxes.  The taxable amount is defined based on the current 
market value of goods sold, jobs performed, and ser vices rendered;  where the price is uncertain, the 
taxable amount is defined by the tax and the cust oms administrations.  Where the taxable amount is 
expressed in foreign currency, it is converted into t ogrogs using the official exchange rate announced 
by the Bank of Mongolia.  Several imported commodities and trade-related services are exempt from 
the VAT, as stipulated in the VAT Law (Table III.4). 
Table III.4 
Imports exempted from the VAT 
VAT Law 
Article No.  Goods and services exempted from the VAT 
9.1.1 Financial services 
9.1.7 Services rendered by  government organizations 
9.1.13 Services provided to forei gn tourists by organizations e ngaged in tour operating activities 
9.2.1 Passengers baggage for personal use 
9.2.2 Goods imported for use of diplomatic  missions or international organizations residing permanently in the territory of 
Mongolia 
9.2.3 Goods, jobs, and services purchased in the territory of Mongolia for work needs of diplomatic missions and consular 
offices residing in Mongolia, if these purchases for the need s of diplomatic missions and consular offices of Mongolia 
are exempted from tax in the respective foreign countries 
9.2.4 Humanitarian and grant aid goods obtained from governments and non-governmental organizations of foreign 
countries, international, charity organizations 
9.2.7 Special purpose appliances for handicapped people 
 Table III.4 (cont'd)WT/TPR/S/145 Trade Policy Review 
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VAT Law 
Article No.  Goods and services exempted from the VAT 
9.2.8 Any weapons, technical appliances  imported for defence needs, police, state security, and law enforcement 
9.2.9 Primary raw materials produced in the territory of Mongo lia from agriculture, forestry and hunting;  applies to 
producers of primary raw material of respective types 
9.2.10 Equipment and heavy machinery to be used and asse mbled for technological purposes in production by a business 
entity with foreign investment, which has made an investme nt in a priority industry a nd export-goods ma nufacturing.  
The list of priority industries is approved by the Government of Mongolia 
9.2.11 Sale of an apartment and/or part of  it;  does not apply to an apartment or to  a part thereof, newly built for purposes o f 
sale 
9.2.12 Imported machinery, equipment, materials, raw materials,  spare parts, gasoline, diesel  fuel, food and personal items 
for employee needs, in support of activities related to crude  oil as provided in an agre ement with the Government 
based on principles of products sharing in crude oil industry. 
9.2.13  Personal-use passenger vehicles (not more  than one) of individuals appointed to work in diplomatic missions or 
consular offices residing in foreign count ries or in inter-governmental interna tional organizations for more than one 
year, and who are returning to the country permanently 
9.2.14 Blood, blood products, and organs  to be used for treatment purposes 
9.2.15 Sold gold 
9.3 Production and service suppliers with annual taxable sale  revenue of Tog 10 million or less;  does not apply to 
importers. 
Source:  Value-added Tax Law of Mongolia. 
(b) Excise tax 
32. In accordance with the Excise Tax Law, excise  taxes are levied on goods considered to be 
damaging to the health of the population and/or the environment, to luxury items, and to items related 
to gambling (Table III.5).  They apply to goods prod uced in Mongolia and to imports;  different rates 
may apply between goods produced in Mongolia a nd imports.  The taxes are calculated either by 
quantity, or as a percentage of the value of the du tiable goods.  Exports are exempt from excise taxes.  
Snuff tobacco, and gasoline and diesel fuel im ported for oil-related business activities conducted 
jointly with the Government are exempt from excise taxes.  Domestically produced spirits distributed 
to food factories for the production of hard alcoho lic beverages or for medi cal use and veterinary 
medicine, as well as domestically produced beer  and home-made liquor distilled from milk, are 
exempt from excise taxes;  imports of these products  are not tax-exempt.  Excise tax is therefore a 
barrier to imports of these products. 
Table III.5 
Excise taxes 
Domestic goods Imported goods Goods subject to excise tax Ad valorem  rates Specific rates (US$) Specific rates (US$) 
Raw spirits 85 - 7.0 per litre 
Hard alcoholic beverages    
up to 40° 80  5.0 per litre 
over 40° 80  6.0 per litre 
Wine 30  0.75 per litre 
Tobacco products  0.30/100 per sticks  0.30/100 per sticks 
Pipe tobacco and other 
identical tobacco  0.15 per 1 kg. 0.15 per 1 kg. 
Beer  0.20 per 1 litre  0.20 per 1 litre 
Gasoline   Imported at:  Tsag aannuur, Yarant, Handgait, Tes, 
Borshoo, Burgastai, Gashuun Sukhait 
Octane up to 90 - 11.0 pe r 1 ton 11.0 per 1 ton 
   Table III.5 (cont'd) Mongolia WT/TPR/S/145 
 Page 31 
 
 
Domestic goods Imported goods Goods subject to excise tax Ad valorem  rates Specific rates (US$) Specific rates (US$) 
Octane over 90 - 12.0 pe r 1 ton 12.0 per 1 ton 
Diesel fuel - 15.0 per 1 ton 15.0 per 1 ton 
Gasoline   Imported at:   Hankh  
Octane up to 90   17.0 per 1 ton 
Octane over 90   21.0 per 1 ton 
Diesel fuel   19.0 per 1 ton 
Gasoline   Imported at:  Sukhbaatar, Zamyn-Ud, Ereentsav 
Octane up to 90   38.0 per 1 ton 
Octane over 90   43.0 per 1 ton 
Diesel fuel   48.0 per 1 ton 
Passenger vehicles    
0-3 years   500 
From 3 to 10 years   1,000 
More than 10 years   2,000 
Source:  Excise Tax Law of Mongolia.  
(iv) Customs valuation, preshipment inspection, and rules of origin 
33. Customs valuation for imported goods is administered in accordance with the Customs Tariff 
Law.  Mongolia uses the c.i.f. price of imports as the basis for customs va luation.  According to 
Articles 10-18 of the law, the primary basis for determ ination is the transaction value, i.e. the price 
actually paid or payable for the goods when sold for export to the customs territory of Mongolia.  If 
Customs suspects that the declared value is not correct, and if the importer cannot justify the declared 
import value, Customs may apply either the "deductive method", the "computed method", or the "fall-
back method". 
34. Mongolia does not use preshipment inspection procedures. 
35. Mongolia does not appear to have any rules of origin for imported goods, partly because it 
does not have any preferential import schemes.  
(v) Import prohibitions, restrictions, and licensing 
36. Mongolia does not apply any import quotas.  
37. According to the Customs Law, prohibition or r estriction of imports requires the authorization 
of Parliament.  Currently, prohibited goods includ e certain drugs and narcotics as well as raw 
materials and equipment that can produce them, and all types of pure spirits.8  Goods that are 
currently restricted are classified  into several different categories,  such as:  certain cows, horses, 
sheep, goats, and camels;  animal-related raw materials and body parts of rare anim als;  natural plants;  
uranium and concentrates thereof;  ionized and u ltra-violate rays substances;  low risk chemical 
substances;  all chemical substances included in the Montreal protocol that produce harmful effects on 
the ozone layer;  dangerous industrial waste;  donor  blood;  any body parts that should be stored under 
guidance;  medical products that can affect the human mind, according to the UN 1961 convention on 
drugs and UN 1971 convention on substances and the UN 1998 convention on illegal trading of 
drugs;  weapons;  veterinary equi pment;  knitted final good;  and cultural artefacts  (Table III.6).9  
                                                      
8 Government Resolution No. 5, 1998. 
9 Government Resolution No. 54, 2001. WT/TPR/S/145 Trade Policy Review 
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According to the authorities, the main purpose of th ese restrictions is to protect human, animal and 
plant health while safeguarding national security.  
Table III.6 
Goods prohibited under Government Resolution No. 54 of 2001 
Goods 
under 4-digit HS code Goods under 
6-digit HS code Commodity description Export/import 
12.11 1211.90.00 Plants and parts (including seeds and fruits), of a kind used primarily in 
perfumery, in pharmacy, or for insecticid al, fungicidal or similar purposes, fresh 
or dried, whether or not cu t, crushed or powdered   Export and import 
13.01 1301.90.00 Lac. Natural viscous gums, resins, gum-re sins and greasy- gums (balsams) Export and import 
29.22 2922.19.00 
2922.30.00 
2922.39.00 2922.49.00 2922.50.00 Amino- compounds with oxygen-function Export and import 
29.24 2924.10.00 
2924.29.00 Carboxyamide-function compounds amide-function compounds of carbonic acid Export and import 
29.26 2926.90.00 Nitrile function compounds Export and import 
29.33 2933.39.00 
2933.40.00 
2933.90.00 Heterocyclic compounds with nitrogen he tero-atom(s) only Export and import 
29.34 2934.90.00 Nucleic acides and thereof salts, heterocyclic compounds:  Export and import 
29.39 2939.10.00 
2939.90.00 Vegetable alcaloids, natural or reproduced  by synthesis, and their salts, ethers, 
esters and other derivatives  Export and import 
    
  All of kind spirits Import 
22.07  Undenatured ethyl alcohol of an al coholic strength by volume of 80% vol or 
higher: ethyl alcohol and other sp irits, denatured, of any strength Import 
  Chemicals, the production of which is prohibited by an International Convention 
on the Prohibition of Production, Storage and Utilization of Chemical Weapons 
and their Proliferation Export and import 
  Poisonous chemicals, the use of whic h is prohibited in Mongolia /16 types of 
chemicals listed in the annex to the Order by the Minister of Environment No. 75 
of 1997 Import 
  Poisonous chemicals used in the production of weapons, wastes thereof Export and import 
  Radioactive chemicals, wastes thereof,  originating from nuclear weapons  Import 
  Parts and compounds of nuclear weapons prepared for nuclear weapon purposes Import 
  Dangerous wastes Import 
  Human blood, blood fractions and organs , not proven to be non-infected with 
AIDS Import 
  Donor blood and organs for medical prev entive purposes that are required to be 
under strict control Import 
30.01 3001.10 
3001.20 3001.90 Glands and other organs for organotherapeutic uses , dried, whether or not 
powdered; extracts of glands or other orga ns or of their secretions for organo- 
therapeutic uses; heparin and its salts; other human or prophylactic uses, not 
elsewhere specified or included. Import 
30.02 3002.10 
3002.20 
3002.90 Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic 
uses; antisera and other blood fractions  and modified immunological products, 
whether or not obtained by means of biot echnological processes; vaccines, toxins, 
cultures of microorganisms (excl uding yeasts) and similar products. Import 
  High-yielding animals, their semens Export and import 
01.01  Live horses, asses, mule s and hinnies Export and import 
  Horses  Export and import 
01.02  Live bovine animals Export and import 
Table III.6 (cont'd)  Mongolia WT/TPR/S/145 
 Page 33 
 
 
Goods 
under 4-digit HS code Goods under 
6-digit HS code Commodity description Export/import 
01.04  Live sheep and goats Export and import 
01.06  Other live animals Export and import 
  Camel Export and import 
05.11 0511.10 
0511.99 Animal products not elsewhere specified or  included; dead animals of Chapter 1 
or 3, unfit for human consumption. Export and import 
  Printed magazines, books, movies, vi deos, pictures, etc. that propogate 
pornography Export and import 
Source: Government Resolution No. 54 of 2001, Government of Mongolia. 
38. According to Government Resolution No. 219 of  25 October 2002, which entered into force 
on 1 January 2003, several ministries are in charge of  issuing import and export licences for restricted 
goods;  these include the Ministries of Environment,  Education, Culture a nd Science, Industry and 
Trade (MIT), Food and Agriculture, and Health.  Th ese ministries are required to provide information 
on licensing to MIT every quarter, and to provide the official name, position, and signature of the 
licence holder to the Customs General Administration.  A licence-issuing ministry must respond to the licence request within 21 working days.  If necessary, the issuing organization has the right to extend 
the period for a further 14 days in order to conduct a detailed analysis of the request.  A licence is 
valid for one year.  A licence can be extended for a year, when needed, to fulfil an export and import 
contract.  Goods subject to import and export li censing requirements are listed in Table III.7. 
Table III.7 
Goods subject to import or export licence  
HS Code, national Description Export/import 
 I. Breeding animals Export 
01011000 Pure-bred breeding horses  
01019000 Other breeding horses  
01021000 Pure-bred breeding live bovine animals  
01029000 Other breeding live bovine animals  
01031000 Pure-bred breeding live swine  
01041000 Sheep  
01042000 Goats  
01069010 Camels  
 Other live animals, raw materials originating therefrom, samples of animals for 
research purposes, semen of animals, cultures of micro-organisms  
 Very rare animals (26 types of an imals listed in the Animals Law)  
 Rare animals (list to be determined by the Government)  
05079011 
05079021 05079029 Antlers, filled with blood, of deer 
Horns, of deer Horns, of wild sheep and of wild goats  
05100011 Musk  
05100012 Penis, of deer  
05111000 Bovine semen  
05119910 Animal semen (other than bovine semen)  
05119990 Semen, of other animals other than breeding animals  
26121000 Uranium ores and concentrates  
Table III.7 (cont'd)  WT/TPR/S/145 Trade Policy Review 
Page 34 
  
HS Code, national Description Export/import 
 II. Poisonous chemicals  
(96 types of chemicals indicated in joint order No. 83/A/160 of 1998 by the 
Ministers of Environment, Health and Social Welfare) Export and import 
 III. Human blood and organs for therapeutic and prophylactic purposes that 
require necessary control Export and import 
30011000 Glands and other organs, dr ied, whether or not powdered  
30012000 Extracts of glands or other organs or of their secretion  
30021000 Antisera and other blood fractions and modified immunological products, whether 
or not obtained by means of  biotechnological processes  
30023000 Vaccines for veterinary medicine  
30029000 Other: human blood, cultures of micro-organisms  
 IV. Explosives Export and import 
36010000 Propellent powders  
36020000 Prepared explosives, other than propellent powders  
36030000 Safety fuses, detonati ng fuses, percussion or detonating caps, igniters, electric 
detonators  
3604 Fireworks, signaling flares, rain rockets, fog signals and other pyrotechnic articles  
 V. Guns, equipment and tools for military use and their spare parts Export and import 
Source:  Government Resolution No. 219 of 2002, Government of Mongolia. 
(vi) Contingency measures 
39. According to Article 8 of the Customs Tariff Law, the Government may, in addition to 
customs tariffs, impose anti-dumping and countervailing duties.  These may be imposed in cases 
where failure to do so will or may:  cause damage  to a domestic manufacturer;  preclude production or 
expansion of production of compar able goods;  or allow other countries to discriminate against 
Mongolia or infringe its interests.  Before impos ing such duties, the Customs Tariff Council must 
verify the situation to determine whether grounds to do so exist under the legislation and Mongolia's 
international treaties.  Mongolia currently imposes neither anti-dumping not countervailing measures.   
40. There are no provisions in Mongolia's current legislation covering safeguard measures.  It 
currently applies no safeguard measures. 
(vii) Government procurement  
41. Government procurement is used as an instrument of economic policy in Mongolia;  
government procurement of goods and services since 1995 amount to Tog 328 billion (equivalent to 
about US$270 million).  Infrastructure accounts for 65.4% of total purchases made through tender, state-owned industrial entities for 8%, local areas for 6.5%, and education, culture and science for 
3.8%.  
42. Mongolia is not a signatory to the WTO Agre ement on Government Procurement;  it is an 
observer in the GPA Committee.  In April 2000, Mongolia adopted a Public Procurement Law to 
regulate matters concerning the preparation of biddi ng documents, advertisemen t, opening of tenders, 
evaluation of tenders, award of contracts for public procurement of goods, works and services, 
composition and organization of the Tender Committee and control over its activities.
10  The Law 
regulates the procurement practices of the Cent ral Government and of local governments.  
                                                      
10 Article 1, the Law of Mongolia on Government Procurement. Mongolia WT/TPR/S/145 
 Page 35 
 
 
43. According to legislation, procuring entiti es are defined as legal persons with state 
participation of more than 50% that are engaged in  procurement of goods, works and services.  It is 
forbidden to exclude foreign bidders from tenders for contracts exceeding Tog 100 million.  Domestic suppliers receive a 10% of margin of preference fo r goods and 7.5% for services.  The Law specifies 
threshold values for the selection of procuremen t procedures, open and selected tendering, and 
comparison of quotations. 
44. In June 2000, a Central Procurement Monito ring Office was established under the Budget 
Department, Ministry of Finance and Economy.  The office was subsequently restructured and 
renamed the Procurement Policy and Coordination Divi sion (PPCD);  it is responsible for all matters 
of public procurement.  In view of fiscal consolid ation (Chapter I(3)(i)), the PPCD aims to establish 
an efficient and effective procurement policy and to monitor the implementation of a transparent 
national procurement system with concurrent cost sav ings in public procurement;  it is not a central 
purchasing agency.  Procuring entities that are user s of public funds are responsible for their own 
procurement in accordance with the Public Procurement Law.   
(viii) State trading 
45. Mongolia does not maintain any state-trading enterprises.
11  
(ix) Other measures  
46. The authorities maintain that there are no legal provisions cove ring countertrade or 
import/export cartels;  nor does the Government or state-owned enterprises engage in them.  The 
authorities are not aware of the existence of any import/export cartels in the private sector.   
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures  
47. Tax registration and registrati on of economic entities with th e State Registry Office are 
required for the purposes of customs clearance fo r exports;  customs clearance procedures and 
documentation requirements for exports are regulated by the Customs Law.  The principal document 
for customs clearance is the Customs Declarati on Form (CDF) (see section (2)(i));  Customs may 
require the exporter to produce additional documen ts, such as an invoice, a packing list, and a 
certificate of origin.  The customs value of expor ted goods are their value at the Mongolian border. 
48. Like imports, one-stop services are available at major customs points, and a "gold card" 
system has been introduced since 2002 (see section (2)(i)).   
49. The Mongolian National Chamber of Commerce and Industry (MCCI) issues certificates of 
origin for exporters, particularly to textile exporte rs that export to the United States and the European 
Union.  Rules associated with the issuance of certifi cates of origin are stipulated in regulation "Issuing 
the Certificate of Origin and Determining the Or igin of Textiles originated in Mongolia", which 
entered into force on 2 August 1999.  To request a certificate of origin, an exporter must submit 
copies of the contract, invoice, and packing list, and an application form to the MCCI;  the MCCI 
normally issues certificates of origin within fo ur business hours, provide d the required documents 
have been submitted.  The MCCI may conduct an inspection of the goods to be exported at the 
factory.  
                                                      
11 WTO document G/STR/N/7/MNG, 9 July 2001.  WT/TPR/S/145 Trade Policy Review 
Page 36 
  
(ii) Export taxes, charges, and levies 
50. Mongolia applies export taxes on several goods.  The main legislation governing export taxes 
is the Law of Mongolia Determining the Amount of  Export Customs Duty to be Imposed on Certain 
Commodities, approved on 29 March 1996.  Insofar as such taxes reduce the domestic price of these 
products, they constitute assistance to their domestic processing (Table III.8). 
51. Upon accession to the WTO, Mongolia made a commitment to eliminate export duty on raw 
cashmere within ten years of the date of accession.  With a view to protecting domestic metal-
smelting plants, due to the increasing shortage of ra w metals and a large increases in the world prices 
of metals since 1997, export taxes on scrap metals were raised from Tog 140/kg. to Tog 350/kg. in 
May 2004.   
Table III.8 
Export taxes for certain commodities, as of January 2004  
No. Product/Commodity HS Code Tax 
1 Camel wool, raw, thick  (5102.10.11) Tog 100/kg. 
2 Camel wool, raw, thin  (5102.10.12) Tog 200/kg. 
3 Raw cashmere  (5102.10.20) Tog 4,000/kg. 
4 Goat, baby goat raw skins  (4103.10.00;  4301.80.12) Tog 1,500 for every piece 
5 Round wood, logs  (44.01;  44.03) Tog 150,000/m3 
6 Billets  (44.03- 44.06) Tog 150,000/m3 
7 Cut timber  (44.07-44.09) Tog 150,000/m3 
8 Scrap metals and worn rails  (72.04; 7204.10.00; 72.04.21.00; 72.04.29.10) Tog 350/kg. 
9 Poles made of iron and steel sheets  (73.01) Tog 140/kg. 
10 Rails  (7302.10.00) Tog 140/kg. 
11 Copper, zinc alloys/brass  (7403.21.00) Tog 128/kg. 
12 Copper waste and scrap  (74.04) Tog 1,500/kg. 
13 Bars, rods and profiles of copper  (74.07) Tog 1,500/kg. 
14 Aluminium, unwrought  (76.01) Tog 450/kg. 
15 Waste and scrap aluminium  (76.02) Tog 450/kg. 
16 Bars, rods and profiles of aluminium   Tog 350/kg. 
Source:  The Law of Mongolia Determining the Amount of Export Customs Duty to be Imposed on Certain Commodities, 
 29 March 1996. 
(iii) Export prohibitions, restrictions, and licensing  
52. Exports of drugs and narcotics (and raw materi als and equipment that can produce them) and 
certain dangerous and poisonous chemicals are prohibite d;  exports of raw hides, skins, and cashmere 
are prohibited with a view to protecting domestic processors.12  Mongolia does not apply any UN-
related economic sanctions.   
53. There are no licensing requirements for exporters in Mongolia, except on some items 
including guns, explosives and certain drugs (Table III.7).13  Mongolia has no voluntary export 
restraint agreements with other countries.  Mongolia  uses no price regulations with respect to its 
exports.  
                                                      
12 Joint resolution No.64/125 of 2003 by the Minister for Industry and Trade and the Minister for 
Finance and Economy.  
13 Government Resolution No.219 of 2002. Mongolia WT/TPR/S/145 
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(iv) Export-tax concessions, subsidies, free zon es, and export performance requirements  
(a) Tax concessions and subsidies for exporters 
54. Mongolia does not provide direct subsidies to any exported goods, including agricultural 
products.  Exports are exempt from excise duties and VAT. 
55. A business entity with foreign investment that e xports more than 50% of its production enjoys 
income tax holidays in the first three years a nd 50% tax relief in the following three years.14  While 
Mongolia committed to eliminate these subsidies by 31 December 2002, there appears to be little 
political will to do this, since other countries provide similar incentives for export-oriented industries.  
(b) Free-trade zones  
56. The concept of free-trade zones was initially adopt ed in the Law of Mongolia on Free Zones, 
which was approved by Parliament in June 2002;  to  date no such zones have been established.  The 
main objective of the law is to intensify the production of export goods, to encourage foreign 
investment, to create employment, and to promot e development of regions near the border with 
neighbouring countries.  Free-trade zones are form ally part of Mongolia's customs territory but 
separated from it by special check points;  business a nd investment in the zones are subject to separate 
customs duty and tax treatment from other parts of Mongolia.15  In the zones, firms are to be accorded 
simplified entrance/exit procedures.  Special preferential conditions, including tax and other 
concessions, are to be applied in free-trade zones.   
(v) Export finance, insurance, and guarantees 
57. Neither the Government nor its affiliated institu tions provide export finance;  however, it is 
apparently available from commercial banks in Mongo lia.  There is no export insurance or guarantee 
system in Mongolia. 
(vi) Export promotion and marketing assistance 
58. Existing institutions involved in trade promo tion are mainly the Mongolian National Chamber 
of Commerce and Industry (MCCI) and to a certain extent the Foreign Investment and Foreign Trade 
Agency (FIFTA).  The MCCI has cooperation agreements with forei gn chambers of commerce and its 
own network of representatives abroad to allow it  to provide export-market information to its 
members.  Recently, an Export Promotion Center was set up in the FIFTA.  
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Promotion of inward foreign direct investment   
59. Since 2001, the Government has introduced a number of measures to raise production and 
investment.  These included:  determining "priority sectors"16, reforming the legal environment with a 
                                                      
14 Foreign Investments Law of Mongolia.  
15 Law of Mongolia on Free Zones, paragraph 3.1. 
16 The list of priority sectors was approved by Government Decree No. 140, 27 June 2001.  It lists 21 
sectors including agriculture;  exploration of coal, oil and gas, uranium and thorium ore, iron ore, and other 
mineral resources;  production of food, flour and animal fo dders;  knitting;  fur processing;  leather processing;  
timber production;  liquid and radioactive fuel;  production of chemical products;  goods made of non-metal 
minerals;  metallurgic industry;  processing of a secondary raw material;  production of electricity, steam and 
water supply;  water treatment and water supply;  and construction.   WT/TPR/S/145 Trade Policy Review 
Page 38 
  
view to attracting foreign investment in key sect ors, and revitalizing agriculture-related processing 
industries.  
60. Furthermore, the Government grants tax incen tives to business entities that involve foreign 
investment, including joint ventures, in accordan ce with the Economic Entity and Organization 
Income Tax Law, the Customs Tariff Law, the Va lue Added Tax Law, the Excise Tax Law, and the 
Land Law;  domestic companies are not eligible for such incentives.  For exam ple, foreign businesses 
exporting more than 50% of production are entitled to  receive corporate income tax exemption for the 
first three years of investment and 50% tax relief in the subsequent three years.17   
61. FDI in certain sectors and activities receive further preferential tax treatment.  For example, 
ten years of tax exemption and 50% tax relief for th e subsequent five years are granted for FDI in 
power and thermal plants and their transmission networks, highways, railways, airways and 
engineering construction, basic telecommunications  network, electricity source and network, and 
technology renovation;  and five years of tax ex emption and 50% tax relief in the subsequent 
five years are granted for FDI in oil and coal, metallurgy, chemical production, machinery, and 
electronics. 
62. If a foreign investor reinvests its income in its  own projects, then the taxable income of the 
investor will be subject to deduction amounting to such reinvestment.18  The annual taxable income 
and gains of a shareholder (and transfers abroad) of a foreign company that conducts business in 
Mongolia in accordance with a product-sharing c ontract with the Government, are exempt from 
taxation.  If an enterprise uses its own assets for road construction and repair, these assets are 
deductible from the total taxable income. 
63. A "stability agreement" between the Government and a foreign investor investing more than 
US$2 million apparently provides a legal guarantee fo r a stable tax environment;  tax provisions in 
accordance with stability agreements ove rride provisions under the Tax Law. 
64. In addition, with a view to promoting re gional development, the Government provides 
income tax exemptions to business entities, domestic or foreign, that invest in new operations in 
aimags , in underdeveloped aimags , and in locations 100 km away from underdeveloped aimags .  
Business entities and organizations that are newl y established to undertake production and services 
activities on the territory of an aimag  and registered with the aimag's  tax authority enjoy tax 
exemptions;  the Government approves the list of aimags  and soums  that are eligible for such tax 
relief.19 
65. The Government has also been promoting th e establishment of industrial and technological 
parks to encourage export-oriented production,  improve competitiveness, and introduce new 
technologies.  Income tax allowances or exemption ar e to be available for companies in industrial and 
technological parks.  No such parks have been established yet.   
(ii) Standards and other technical requirements 
66. The main standardization and metrology laws  in Mongolia are the Law on Standardization 
and Conformity Assessment and the Law on Traceab ility of Measurement Uniformity.  In 2003, these 
                                                      
17 This provision does not apply to wool and cashmere washing and dehairing and primary processing 
leather industries. 
18 Article 7, the Economic Entity and Organization Income Tax Law of Mongolia. 
19 These provisions do not apply to business entities and organizations engaged in production of 
alcoholic beverages or in the mining industry. Mongolia WT/TPR/S/145 
 Page 39 
 
 
laws were amended with a view  to harmonizing the activities of standardization and conformity 
assessment with international approaches. 
67. The Mongolian National Centre for Standa rdisation and Metrology (MNCSM) is a 
government-regulatory agency responsible for coordi nating and managing metrology, standardization, 
and testing in Mongolia;  it is also responsible  for developing national standards and providing 
conformity marks to domestic and foreign produc ts.  The MNCSM acts as a WTO enquiry point and 
coordinates the implementation of the WTO Agreement on Technical Barriers to Trade;  it is also 
member of the International Organization for Standardization (ISO) and the FAO/WHO Codex 
Alimentarius Commission (Codex), and has joined th e IEC Affiliate Country Programme since 2001.   
68. Mongolian standards are developed by consensu s of industry, consumers, government bodies, 
and testing establishments.  The main objectives of Mongolia's standardization policy include 
increasing the number of national standards that are identical to international standards.  Currently, 
there are 4,156 Mongolian standards, of which 35% are harmonized with international standards.  
More than 40% of the Mongolian standards are quoted as mandatory technical regulations.  The 
authorities have been making efforts to reduce the number of mandatory standards and increase 
voluntary conformity assessments by manufacturers.  There are also 588 food standards20, of which 
45% are identical to international standards, and 388 agricultural standards, of which 14% are 
identical to international standards.21 
69. Since 1995, the MNCSM has granted 308 conformity marks to domestic and foreign 
products.  Since June 2003, Mongolia has accepted conformity marks issued by selected foreign 
certification bodies as equivalent to Mongo lia's national conformity marks.   
70. On 28 November 2002, Parliament approve d the Law on Quarantine and Inspection for 
Transferring of Animals, Plants, Raw Materials and Products of their Origin through the State Border, 
which effectively replaced the previous laws on anim al health and plant protection.  The new law was 
drafted by the Government because the previous laws on animal and plant quarantine did not meet 
concerns related to the increase in international trade. 
71. Mongolia has government-level cooperation agr eements on standardization and certification 
with China "the cooperation agreement on the qua lity certification and mutual recognition of import 
and export commodities between the Government of Mongolia and the Govern ment of the People's 
Republic of China", signed in 1994;  and with Russia "the cooperation agreement on the quality of 
import and export commodities between the Trade Mini stry of Mongolia and the Federal Agency of 
standardization, metrology and quality certificati on of the Russian Federation", signed in 1996.   
(iii) Intellectual property rights 
72. Mongolia committed to fully apply the provisions of the WTO Agreement on TRIPS by the 
date of its accession to the WTO in 1997.  Parlia ment and the Government undertook certain activities 
to bringing national legislation on intellectual property rights into conformity with the TRIPS 
Agreement and other international conventions and agreements on in tellectual property.  In this 
context, the Law on Patent and Copyright of 19 93 was amended in 1999 with a view to assuring 
compatibility with the TRIPS Agreement.  Parlia ment has adopted the Law on Joining the World 
Intellectual Property Organization (WIPO) Copy right Treaty, and the WIPO Performers and 
                                                      
20 These include 25 basic standards, six terminology standards, 243 testing standards, and 314 product 
standards. 
21 These include three basic standards, seven terminology standards, 137 testing standards, and 
241 product standards.   WT/TPR/S/145 Trade Policy Review 
Page 40 
  
Phonograms Treaty (in 2002).22  The Intellectual Property Office, which is under the responsibility of 
the Deputy Prime Minister, is responsible for enforc ing these laws.  The Intellectual Property Office is 
also in charge of settling disputes and grievances.  If the disputing parties disagree with the decision 
of the Intellectual Property Office, they can refer the matter to the court.   
(a) Copyright and related rights 
73. Under Article 3 of the Copyright Law of Mongo lia of 1993, copyrighted work is protected 
from its creation.  The Law regulates matters related to the protection of copyright and issues arising 
in connection with the use of work s that are subject to copyright.23  An author may register his work 
or contract of transfer of rights;  registration is not required for the protection of copyrights.  Mongolia's legislation defines the protection of pe rformers and artists' rights (including duration and 
coverage of protection), and the rights of broadcas ting organizations and producers of phonograms.   
(b) Patents  
74. Under the Patent Law of Mongolia, patent prot ection is provided for a period of 20 years 
following the filing of the application.
24  Patents are granted for methods and products, including 
inventions relating to micro-organisms, pharmaceutic als, chemicals, fertilizer, pesticides, herbicides, 
biotechnological processes, and biological and genetic materials.  Patent applications are filed with 
the Intellectual Property Office.  An application fo r patents must contain a request, a description of 
the invention, patent claims and an abstract.25  The Intellectual Property Office must verify the 
presence of required documents within 20 days from the da te of receipt of an application, and if all the 
requirements are met it accords the date of receipt of the application as the filing date.  After 
according a filing date, the Intell ectual Property Office examines wh ether the given invention meets 
the criteria specified in the Patent Law.  The Intellectual Property Office must decide within 
nine months from the filing date whether a patent is to be granted.  Successful applications are 
published;  a patent is granted if no notice of oppos ition is received by the Intellectual Property Office 
within three months of the date of publication.   
(c) Trade marks and other marks 
75. The Law on Trademarks and Geographical Indicati ons entered into force in 2003, effectively 
replacing the previous Law on Trade Names and Tr ademarks.  The new law protects trade marks, 
service marks, collective marks and certification mark s;  the duties of the Intellectual Property Office 
under the new law are to decide on applications and register relevant marks and trade names.  Trade 
                                                      
22 Mongolia is also party to:  Convention for the Establishing WIPO, Paris Convention for the 
Protection of Industrial Property, Madrid Agreement Concerning the International Registration of Marks, Patent 
Cooperation Treaty, Hague Agreement Concerning the International Deposit of Industrial Designs, Berne 
Convention for the Protection of Literary and Artistic Works, Protocol Relating to the Madrid Agreement 
Concerning the International Registration of Marks, St rasbourg Agreement Concerning the International Patent 
Classification, Nice Agreement Concer ning the International Classification of Goods and Services for the 
Purposes of the Registration of Mark s, Locarno Agreement Establishing an International Classification for 
Industrial Designs, and Nairobi Treaty on the Protection of the Olympic Symbol. 
23 These include literary works, musical works, wo rks of fine and applied art, architecture and 
construction design, choreographic works, dramatic works, cinematographic works, photographic works, plans, 
sketches, designs, and models related to scientific and technical domain, computer programs, directories, 
dictionaries, encyclopaedia, literary collections, derivative works, and sound and visual recordings.   
24 Under the Patent Law, industrial designs are protected for a period of ten years and utility models 
seven years. 
25 An application for an industrial design patent must contain, a drawing and a description of the 
industrial design. Mongolia WT/TPR/S/145 
 Page 41 
 
 
marks are registered for a period of ten years followi ng the filing of the application;  registration can 
be renewed.  Both domestic and foreign natural pe rsons and legal entities can apply for registration of 
marks.  Trade mark applications are filed with th e Office by the natural or a legal person wishing to 
register the trade mark;  application documents must be submitted in the Mongolian language.  If the 
application meets the requirements provided for in Artic le 6.1. of the Law, the date of receipt of the 
application is accorded as the filing date of the a pplication.  After according a filing date, the Office 
examines whether the sign could be considered as a trade mark and whether it is eligible for 
registration.  Based on its findings, the Office deci des whether to register the trade mark, within 
12 months from the filing date of the application;  this period may be extended for up to six months.  
When a trade mark is accepted, the Intellectual Property Office records it in the State Trademark 
Register, issues a certificate, and files the application.  Registered trade marks and related 
bibliographic data are published.   
(d) Geographical indications 
76. According to the Law on Trademarks and Geogr aphical Indications, geographical indications 
are defined as a geographical name of country or region where the product is produced, identifying 
the quality, reputation, and other specifics of this product.  If a geographical name of country or 
region has become a generic name in Mongolia to  denote certain goods, such name may not be 
protected as a geographical indication.  A geographical indication may not be registered if it is identical with a geographical indication or a trade mark  registered in Mongolia in respect to identical 
goods, or if it is identical with, or similar to, a ge ographical indication or a trade mark registered in 
Mongolia in respect of similar goods where its use w ould result in a likelihood of confusion on the 
part of consumers.  Applications for the registra tion of a geographical indication are filed with the 
Intellectual Property Office by natural or legal pe rsons that manufacture goods in the indicated 
locality where the characteristics of the goods are associ ated with that locality.  The Office records 
accepted geographical indications in the State Register of Geographical Indications, issues a 
certificate and keeps the application on file.  Re gistered geographical indications and related 
bibliographic data are published.    
(e) Parallel imports 
77. It would appear that parallel im ports are allowed in Mongolia;  however, sole distributors also 
appear to be allowed.    
(f) Enforcement 
78. Under the Patent Law, the Copyright Law and the Law on Trademarks and Geographical 
Indications, a violation of the intellectual property right (IPR) may attract administrative penalties.  
Compensation for damages caused by the infringement of the rights of an IPR owner may be awarded 
in accordance with the Civil Law.  The State Inte llectual Property Inspection, established in 2000, is 
responsible for enforcing IPR-related laws. 
79. Amendments to the Copyright and Patent Law of Mongolia in 1999 established the current 
system of enforcement of IPRs, which is based, inter alia,  on the Rule on State Intellectual Inspection, 
which provides the rules and details of inspection to enforce various laws for the protection of IPRs.  
Under the Copyright Law and the Patent Law, in th e event of an infringement, a state inspector may 
impose on a natural person a fine of up to Tog 250 ,000, or imprisonment of the infringer for up to 
7-14 days;  the infringing goods are subject to seizu re.  The Trademarks and Geographical Indications 
Law has similar provisions.  Right holders may initiat e request for investigation;  Customs also has 
the right to seize infringing goods, with or without the request of the right holder.   WT/TPR/S/145 Trade Policy Review 
Page 42 
  
80. Since 2000, the State Intellectual Property Inspection has inspected 1,233 cases and 
determined 772 IPR infringements (Table III.9). 
Table III.9 
Enforcement statistics related to intellectual property, 2000-04 
Items 2000 2001 2002 2003 2004a 
Number of inspections conducted      
Planned 169 136 172 98 126 
Follow-up of complaints 11 51 137 127 143 
Follow-up of public media information .. 4 8 26 8 
Entities inspected 168 182 254 217 70 
Citizens inspected 12 9 63 51 207 
Number of infringements 60 130 164 203 215 
Remedies      
Confiscated goods (togrogs) .. 60,957,000 21,813,515 7,638,998 9,618,925 
Penalties (togrogs) 2,500,00 0 .. 1,000,000 2,200,000 .. 
Operations stopped 1 .. .. .. .. 
Operations renewed .. .. .. .. .. 
Transferred to police action 1 3 4 1 .. 
Transferred to court action .. 3 4 4 .. 
Produced      
Inspectors report 3 12 28 16 4 
Notification 6 47 97 93 24 
Acts 17 35 76 50 41 
.. Not available. 
a Until 1 October 2004. 
Source: Information provided by the Mongolian authorities.  
(iv) State-owned enterprises and privatization 
81. The Government reduced its involvement in  mining, manufacturing, and services sectors 
towards the end of the 1990s;  during 1997-00, the proceeds from the Government's sales of state-
owned enterprises accounted for around 5% of GDP.  In 2002, income from state-owned enterprises 
accounted for Tog 798 billion, with net profit of  Tog 20.3 billion (Tog 23.8 billion in 2003). 
82. As of April 2004, there were 80 state-owned enterprises;  they are to be privatized in 
accordance with the Privatization Guidelines for 2004-08 (see below).  According to the authorities, 
the private sector's share in GDP reached about 80% in 2000 (the latest year for which data are 
available);  the private sector's shares in sectoral  GDP in 2000 were 98% for agriculture, 90% for 
trade, 49% for manufacturing, 17% for transportation, 5% for communications, and zero for energy.  
No state-owned enterprises apparently have exclus ive rights in production, sales or exports/imports of 
particular products. 
83. Mongolia's laws and regulations  concerning privatization include:  the 1996 Central and 
Local Governments Property Law;  Privatizati on Guidelines for 2001-2004 (Parliament Resolution 
No. 10, 15 January 2001);  Main Guidelines for Social Sector Restructuring, Reform and Privatization (Parliament Resolution No. 56, 10 July 2002);  and Government Resolutions No. 35 of 2001, No. 9 
of 2002, No. 14 of 2003, No. 13 of 2004 on Privati zation.  On 25 January 2001, Parliament approved 
the Privatization Guidelines for 2001-2004, which ser ve as an official statement of the Government's 
privatization policies and define enterprise- a nd sector-specific objectives and priorities.  The 
Government's strategy for 2001-04 focuses on the priv atization of most valued companies (MVCs) Mongolia WT/TPR/S/145 
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through tenders.  The MVCs are defined as compan ies strategically positioned in their respective 
sectors of the economy with "substantial" market sh are and potential to attract foreign investment.  
With a view to increasing the participation of foreig n investors in the privatization of the MVCs, the 
Government intends to:  mode rnize equipment and technology to bring them up to current 
international standards;  introduce management know-how to lead Mongolian companies into the 
international arena;  and dismantle the market domina nce of certain enterprises.  In 2002, Parliament 
adopted the Guidelines for Social Se ctor Restructuring, Reform and Pr ivatization;  the social sector 
includes health, education, culture and arts, and sci ence.  The main purpose of the Guidelines is to 
increase private sector participation, support co mpetition in the social sector, and to improve 
effectiveness and accessibility  of social services.   
84. Since 2002, the Trade and Development Bank, th e Agriculture Bank, and the NIC (petroleum 
distribution) and Mongol Daatgal (insurance) ha ve been privatized.  The Government Action 
Programme announced for the period 2000-04 stipulat ed continued privatization for the state-owned 
enterprises in the energy and mining sectors.  Privat ization in the social sectors was to be promoted.  
In manufacturing, a large state-owned cashmere comp any, Gobi, is to be privatized.  With the 
exception of Erdenet Mining and Ulaanbaatar Railways , all MVCs are subject to privatization by the 
end of 2004.  MIAT, Mongolia's flag-carrying airline,  introduced a management contract with an Irish 
firm in 2003:  the privatization of MIAT is currently  under consideration.  The overall direction in the 
privatization process is to prepare the remaining state-owned enterprises for future private-sector 
involvement. 
(v) Competition policy  
85. The Law of Mongolia on Prohibiting Unfair Competition was adopted in 1993 and amended 
in 2000.  Currently, there are no agencies authorized to enforce the law;  in accordance with the Law, 
a provisional Unfair Competition and Regulation Author ity is being established.  The Authority is to 
be responsible for:  enforcement of the legisla tion as well as for the prohibition, restriction and 
curbing of activities harmful for competition;  the inspection and issue of conclusions on activities of entities conducting business activities;  and determining dominant business entities.   
86. Under the Law, market dominance is defined as a situation where a single business entity or a 
group of business entities acting together has more than one third of market share of a product.  A business entity in a dominant position is prohibite d from conducting activities that restrict fair 
competition.  Such activities include:  halting or rest ricting production or sale of goods in order to 
create an artificial shortage or to raise pri ces;  using its dominant position to impose additional 
conditions for resale;  selling goods and products at  lower-than-cost prices in order to prevent other 
business entities from entering that market or to drive them out of the market (on the other hand, if a 
dominant entity sells a particular good at the "lowest  minimum social cost" such entity is not deemed 
to abuse its dominant position);  insisting on buyers not buying goods from their competitors as a 
condition for sale of its goods;  demanding that comp etitors restructure or liquidate their companies 
through division and separation;  insisting on including in a contract conditions that are not relevant to 
the subject of the contract or disadvantageous to the contracting party (suc h a behaviour is called a 
monopoly).  Businesses that collectively hold a dom inant position are also prohibited from making 
agreements that hinder competition.  These agreemen ts include:  mutually agreeing to fix prices; 
limiting production or sales;  dividing markets by lo cation, production, services, sales, name, or type 
of goods or consumers;  particip ating in competitive tenders or bid auctions having agreed in advance 
the price (bid rigging);  and restricting the sale to or purchase of goods by third parties.