WT/TPR/S/145 Trade Policy Review 
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) GENERAL INSTITUTIONAL FRAMEWORK  
1. Mongolia is a parliamentary democracy.  It's  Constitution, adopted on 13 January 1992, 
provides for  free elections on the basis of universal, equa l and direct suffrage by secret ballot;  the 
minimum age for voting is 18 years.1  Parliament  consists of a single house (the State Great Hural);  
its 76 members are directly elected for a fixed term of four years.2  Parliament is the sole body vested 
with legislative authority, based on the Constitutio n.  Parliament appoints or removes the Prime 
Minister (with the consent of the President), senior officials of the Government (e.g. ministers), and 
members of other bodies accountable to Parliament as provided for by law.3  Parliament approves the 
Government's annual fiscal policy plans and the Cent ral Bank's annual monetary policy plans;  it also 
has authority to ratify international treaties or withdraw from them. 
2. The President of Mongolia is the Head of State;   presidential elections are held every four 
years.4  Presidential candidates are nominated by politi cal parties that have at least one seat in 
Parliament.5  The President has the right to veto laws a nd resolutions of Parliament;  the veto can be 
overruled if two thirds of the members of Parlia ment present do not accept it.  The President has the 
right to propose to Parliament a candidate for th e Prime Minister, as well as the dissolution of the 
Government.6  The President may issue decrees in conformity with laws7, and may conclude 
international treaties.  The Constitutional Court, wh ich consists of parliame ntarians, may remove the 
President if it decides that he/she has violated the Constitution, abused power, or breached his/her 
oath. 
3. The Government of Mongolia, headed by the Pr ime Minister, is the executive body of state 
power;  it also directs the activities of local administrations, and concludes and implements 
international and intergovernmental treaties.  The Prime Minister, in consultation with the President, 
submits their proposals on the structure and composit ion of the Government to Parliament, which then 
approves/disapproves the proposal.  The mandate of the Government is for four years.  
4. Governance of administrative and territorial un its of Mongolia is conducted by central and 
local governments.  The Central Government's lo cal policy is conducted through regional governors, 
who are responsible for the implementation of natio nal policy and exercising administrative control at 
regional level, in addition to formulatin g and implementing the region's own policies.   Mongolia is 
divided administratively into aimags  (provinces) and the capital city (Ulaanbaatar);  aimags  are 
subdivided into soums (districts at the provincial level) , which are further divided into baghs (villages, 
or sub-districts at the provincial level);  the capital city is divided into districts and sub-districts 
(horoos) . 
5. The Constitution guarantees the independence of the judiciary.  The judicial system consists 
of the Supreme Court, two capital city courts, and eight  district courts.  According to Article 48 of the 
                                                      
1 The most recent parliamentary elec tion was held on 27 June 2004. 
2 Parliament may dissolve itself if two thirds or more of its members agree to do  so;  the President, in 
consultation with the Chairman of Parliament, may also propose to do so. 
3 These include the President of Mongol Bank and members of the Constitutional Court.  
4 The President can be re-elected only once.  The President is also a head of the armed forces. 
5 Presidential candidates must be at least 45 years of age, be born Mongolian, and have resided in 
Mongolia in the five recent years. 
6 The dissolution of the Government entails the resignation of the Prime Minister and all other 
ministers. 
7 If Parliament decides that such decrees are in consistent with laws, it may declare them void.  Mongolia WT/TPR/S/145 
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Constitution, specialized courts such as criminal, civil, and administrative courts may be formed.8  
The Supreme Court interprets all laws with the exception of the Constitution;  the Constitutional 
Court exercises supreme supervision over the impl ementation of the Constitution, makes judgements 
on the violation of its provisions, and resolves disputes related to the Constitution.9  If the 
Constitutional Court decides that laws, decrees, or ot her decisions of Parliament and the President as 
well as Government decisions and international treaties concluded by  Mongolia are incongruous with 
the Constitution, the laws, decrees, instruments of ratification and decisions in question are 
invalidated.  Cases are brought to the Constitutional Court upon its own initiative based on petitions 
received from citizens, or at the request of Parliament, the President, the Prime Minister, the Supreme 
Court, or the Prosecutor General. 
6. A General Council of Courts, whose 12 members include the President, Chief Justice of the 
Supreme Court, a member of Parliament, and a member of the Government, ensures the independence of the judiciary.  The Council deals primarily w ith the selection of judges;  budget, financing, and 
human resources of courts;  protection of judg es' rights;  and other matters concerning the 
independence of the judiciary.  
(2) T
RADE POLICY FORMULATION AND IMPLEMENTATION  
7. Any legislation, including on trade and trade-re lated issues, may be initiated by a member of 
Parliament, the President, or the Government.  Ministries and agencies of the Government prepare a draft bill for laws and regulations related to their exec utive jurisdiction.  A draft bill is referred by the 
Chairperson of Parliament for submission to the relevant Standing Committee of Parliament, where it 
is discussed with the participation of ministri es in charge.  The Standing Committee on Economic 
Policy deals with Mongolia's main economic polic y issues including trade policies.  Upon final 
approval by the Standing Committee, the bill is  introduced to Parliament for discussion.  
8. According to Article 38 of the Constitution, th e specific powers, structure, and procedure of 
the Government are determined by law.  The current  Government consists of the Prime Minister, the 
Deputy Prime Minister, the Prime Minister's Office, and 13 ministries in accordance with the Law on 
the Composition of the Government of Mongolia, enacted on 22 September 2004.
10  The formulation 
and implementation of trade policies is carried out by several ministries and agencies in consultation with representatives from the private sector.  Curr ently, Mongolian trade policy is formulated and 
coordinated by the Ministry of Industry and Trade (MIT).  The Ministry has the main responsibility 
for all issues related to trade, including trade pr omotion/facilitation and export development.  Within 
the MIT, the Trade Policy and Cooperation Department  is responsible for coordinating trade policy.  
The MIT supervises the Foreign Investment and Foreign Trade Agency (FIFTA) and the Mineral 
Resources and Petroleum Authority.  The FIFTA is responsible for promoti ng and facilitating foreign 
direct investment and foreign trade. 
9. The Customs Tariff Council is responsible for making proposals and judgments relating to the 
development of the customs and tariff policy, form ulation of a proper tariff system, the adoption of 
tariff rates, and the imposition of additional duties.   The Minister for Finance chairs the Customs 
Tariff Council.  The Customs General Administra tion, established under the Ministry of Finance 
                                                     
 
8 Administrative courts were created at the end of 2002 to adjudicate administ rative disputes involving 
the Government and its agencies.  Ther e are 21 such courts in Mongolia.  
9 The Constitutional Court consists of nine members appointed by Parliament for six-years;  three 
members are nominated by Parliament, three by the President, and the remaining three by the Supreme Court.  
The Constitution guarantees private property rights as  provided by various laws (Articles 6 and 16). 
10 This Law terminated the previous Law on the Composition of the previous Government of Mongolia 
(enacted on 3 August 2000). WT/TPR/S/145 Trade Policy Review 
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(MOF), is responsible for enforcing the customs le gislation, levying and collecting customs duties and 
other taxes, and preparing and submitting customs sta tistical data to the National Statistical Office. 
10. The Mongolian National Centre for Standardi zation and Metrology (MNCSM) coordinates 
and manages issues related to standardization, quality certification, testing, surveillance, and 
metrology throughout the country.  The MNCSM is under the responsibility of the Deputy Prime 
Minister;  80% of its income is from the provision of certification and other services.  The State Professional Inspection Agency is responsible for:   inspection of importe d and exported goods on 
grounds of food safety;  agricultural inspections, su ch as for seeds and plants;  enforcement of laws 
and regulations related to trade, industry, servi ce, geology, and mining;  and supervising the 
observation of standards. 
11. The Mongolian Intellectual Property Office is in charge of all trade-related aspects of the 
intellectual property, including copyright, patents,  and trade marks;  it is under the Deputy Prime 
Minister. 
12. The Bank of Mongolia (the Central Bank) is r esponsible for overall monetary and exchange 
rate policies;  it also supervises banks and is required to maintain, inter alia , financial market and 
banking system stability.  The Bank formally reports to Parliament. 
13. Other ministries that participate in the trade policy formulation include:  the Ministry of 
Construction and Urbanization;  the Ministry of Road s, Transportation and Tourism;  the Ministry of 
Fuel and Energy;  the Ministry of Food and Agri culture (for trade-related issues in the agricultural 
sector);  and the Ministry of Justice and Domestic Affairs (for the drafting of laws and regulations, 
and for the trade-related aspects of intellectual property).  
14. In the non-governmental sector, the Mongolia n National Chamber of Commerce and Industry 
(MNCCI) provides a number of trade support services, including issuing certificates of origin;  registration of patents and trade marks;  arbitra tion of foreign trade and investment disputes;  
independent inspection of expor ted and imported goods;  providing export-market research and 
intelligence;  organizing trade fairs, exhibitions an d business missions;  and project development.  
15. In addition, several sectoral business associations  were set up in the 1990s to collect and share 
information, identify and deal with industry problem s, discuss the trade policy issues that affect their 
industries, and represent their sectors in relation to Government.  These include the Mongolian Association of National Producers, the Mongolian Wool and Cashmere Federation, the Mongolian 
Meat Exporters Association, the Mongolian Textile Producers Federation, and the Mongolian 
Association of Hides and Skins. 
16. Regular consultations between the Government  and the private sector are conducted in a 
Government and Private Sector Consultative Committ ee;  the main objective of the Committee is to 
improve the business and legal environment for the pr ivate sector.  The Minister of Finance and the 
Chief Executive Officer of the Mongolian National Chamber of Commerce and Industry co-chair this 
Committee.   
(3) T
RADE RELATED LAWS AND REGULATIONS  
17. Since its accession to the WTO in 1997, most of Mongolia's laws covering trade, trade-related 
policies, and investment have been revised, updated or newly created to enable Mongolia to meet its 
commitments as a member of the multilateral trading system (Table II.1).  The new laws concern:  
free-trade zones, standards, sanitation, food safet y, pharmaceuticals, trad e marks and geographical 
indications, technology transfer, business registra tion and licensing, bankruptcy, VAT, civil legal Mongolia WT/TPR/S/145 
 Page 15 
 
 
relations (Civil Code 2002), government  procurement, insurance, postal services, and rights over land 
and land fees.  Amendments have been made to se veral laws, e.g:  Business Entity and Organization 
Taxation (1992), Banks (1996), Companies (1999), Copyright (1993), Customs and Customs Tariff 
(both 1996), General Taxation (1993), Excise Taxa tion (1993), Export Customs Duty (1996), Foreign 
Trade Arbitration (1995), Stamp Duty (1993), and Patent (1993). 
Table II.1 
Main trade-related legislation 
Legislation Date Description 
The Customs Law of Mongolia 16 May 1996 Regulates issues rela ted to the organizational st ructure and legal basis of 
Customs, defining the procedures for customs control as well as customs 
clearance procedures and enforcemen t of the customs legislation.  
Customs Tariff Law of Mongolia  20 May 1996 Regulated matters relating to the creation of the customs tariff system of 
Mongolia, principles for the adoption of customs duty rates, valuation and rules for levying and collecting customs duties. 
Excise Tax Law of Mongolia 21 January 1993 Imposes excise  tax on certain imported and domestic goods and governs 
relations in respect of paymen t of such tax to the budget. 
Value-added Tax Law of Mongolia 8 Decemb er 1998 Regulates the imposition of a va lue-added tax on impo rted and exported 
goods, goods sold, jobs performed, and services rendered in the territory 
of Mongolia, sale of imported goods by citizens and legal entities in 
Mongolia, and to payment of value-added tax to the budget. 
Law of Mongolia Determining the amount of Export Customs Duty to 
be imposed on Certain 
Commodities  29 March 1996 Imposes specific export custom s duties on a number of commodities. 
Law of Mongolia on Free Zones 28 June 2002 Regulates the establishment of free zones and their form, powers of 
governing bodies, monitoring mechanisms, determines the legal basis for 
and the realization of special  tax and custom conditions. 
Law on the legal status of 
"Altanbulag" Free Trade Zone 2 July 2000 Determines the legal status of the Altanbulag zone and regulates issues 
related to its implementation. 
Foreign Investment Law of Mongolia  10 May 1993 Encourages foreign investment , protects the rights and property of 
foreign investors in Mongolia, and re gulates matters relating to foreign 
investment. 
Government Resolution of 
Mongolia on Approving the Model 
of the Stability Agreement, No. 46 24 March 2001 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. 
Copyright Law of Mongolia 22 June 1993 Regulates matters related to the protection of copyright and use of the 
works that are subject to copyright. 
Patent Law of Mongolia 25 June 1993 Regulates matters related to protection of the rights of authors of 
inventions, industrial designs, and i nnovations and of patent owners, and 
to the use of inventions, industrial designs and innovations. 
Law of Mongolia on Trade Names and Trademarks 19 December 1996 Ensures legal guarantees for trade marks and trade names, protects the 
rights and legal interests of their ow ners, and regulates issues concerning 
the ownership, use and disposal of trademarks and trade names. 
Law of Mongolia Prohibiting 
Unfair Competition 12 May 2000 Creates conditions for fair co mpetition on the market among the legal 
persons engaged in business activities,  and regulates matters concerning 
the legal and organizational basis for prohibition and/or prevention of any 
activities that are contrary  to fair competition. 
Law on Government Procurement 14 April 2000 Regulates matte rs relating to the preparation of bidding documents, 
advertisement, opening of tenders, ev aluation of tenders, and award of 
contract for public procurement of goods, works and services;  composition and organization of Tende r Committee, and control over its 
activities. 
Constitution of Mongolia 13 January 1992 The Constitution of Mongolia 
Table II.1 (cont'd) WT/TPR/S/145 Trade Policy Review 
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Legislation Date Description 
Civil Code 10 January 2002 Regulates matters with respect to material and non-material wealth 
arising between legal persons.  
Company Law 2 July 1999 Regulates the establis hment, registration and reorganization of a 
company, its management and organi zational structure, the rights and 
obligations of its shareholders, and its control and liquidation. 
Law on Licensing 1 February 2001 Regulates the giving, delaying and invalidating of a licence to business 
activities that might negatively affect  public interest, human well-being, 
environment, and national security  and that might require specific 
conditions and expertise. 
Tourism Law 5 May 2000 Regulates relations betw een the State, citizens, economic entities and 
organizations with regard to touris m promotion, engagement in tourism 
activities, and provision of tourism se rvices on the territory of Mongolia. 
Banking Law 3 September 1996 Regulates the licensi ng of banks, the revocation of licences, the 
establishment of general principles of a bank's management, organization, 
and activities, and enforcement measures. 
Law on Central Bank 3 September 1996 Establishes the le gal grounds of the powers of the Central Bank of 
Mongolia, its management, organizati on, and activities, and regulates 
issues concerning the implementa tion of state monetary policy 
undertaken by the Central Bank. 
Law on Currency Settlements 12 May 1994 Defines the powers of the Government bodies in charge of currency 
settlement, regulates exchange cont rols for currency circulation by 
business entities, organizations, and c itizens, and establishes mechanisms 
to sustain the Mongolian currency exchange rate. 
Law on Deposits, Loans and 
Banking Transactions 31 October 1995 Regulates matters concerning the depositing of funds with banks by 
citizens and legal persons, the carrying out of transactions through the 
agency of banks and operations, and the granting and repayment of bank 
loans. 
Law on Non-bank Financial Activities 12 December 2002 Establishes legal foundatio ns for non-bank financial activities and 
regulates issues of management, orga nization, licensing, and suspension 
or revocation of licences of en tities conducting non-bank financial 
activities. 
Law on Bills 2 November 1995 Regulates relations be tween citizens and business entities concerning the 
use of bills of exchange and promi ssory notes as a means of payment. 
Law on Insurance 5 December 1997 Defines the legal framework for conducting insurance activities in the 
territory of Mongolia, regulates rela tions between insurance companies, 
citizens, and legal entities, and create s principles for state auditing of 
insurance activities. 
Accounting Law 13 December 2001 Determines the lega l grounds for accounting principles, management, and 
institutions and regulates issues pertaining to the maintenance of 
accounting records and the preparation of financial statements of the 
business entity or organization. 
Securities Law 13 October 1994 Regulates the issue of  securities for the purpose of accumulating capital, 
the buying and selling of securitie s, depository arrangements, and 
clearing and settlement services, the regulation of issuers and other 
persons involved in the securities mark et and the protection of investors. 
Law on Telecommunications 16 November 1995 Regulates rela tions between state organi zations, service providers, 
business entities, and individuals engaged in telecommunications and the 
creation, utilization, and protection of the telecommunications network 
and telecommunications services in Mongolia.  
Energy Law 1 February 2001 Regulates matters relating to energy generation, transmission, 
distribution, dispatching and supply  activities, construction of energy 
facilities, and energy consumption th at involve utilization of energy 
resources. 
Minerals Law 5 June 997 Regulates exploration, mining a nd related activities within the territory of 
Mongolia. 
Petroleum Law  18 January 1991 Regulates the operations of Mong olian and foreign entities or individuals 
involved in the exploration for and the protection, processing, 
transportation, storage, and marketing of petroleum originating in 
Mongolia. 
Source:  Information provided by the Mongolian authorities. Mongolia WT/TPR/S/145 
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18. The terms of international treaties to which Mong olia is a signatory may be invoked directly 
in national courts (Civil Code, Article 2.2).  Wh ere the terms of its own national legislation are 
contrary to provisions of such a treaty, the terms of  the international treaty prevail.  Based on various 
international arbitration agreements, such as th e New York and Washington Conventions, to which 
Mongolia is a party, the rights and obligations of pa rties to international contracts are regulated by the 
law of any country designated by the contracting par ties;  thus parties to trade-related contracts are 
free to choose legal jurisdiction for the contracts. 
(4) TRADE POLICY OBJECTIVES  
19. Mongolia's overall trade policy objectives, as stated in the Action Programme of the 
Government of Mongolia for 2004-08, are to suppor t economic growth through an active trade policy, 
promote the industrial, agricultural and services se ctors, and increase exports.  The Action Programme 
also aims to change Mongolia's export structure by  diversifying export products and markets, and to 
work towards the establishment of free-trade agreements with Russia,  China, and the United States.  
In light of the upcoming expiry of the Agreemen t on Textiles and Clothing, Mongolia aims to take 
measures to exploit new trade opportunities for these products in order to ma intain its position in 
international markets.  Mongolia also aims to inte nsify negotiations with th e European Union, Japan, 
the United States, and other countries to expand the scope of Mongolian products to be covered by 
their Generalized System of Preferences. 
(5) TRADE AGREEMENTS AND ARRANGEMENTS  
(i) Mongolia and the World Trade Organization  
20. Mongolia acceded to the WTO on 29 January 1997.  The WTO Agreements have been largely 
incorporated into Mongolia's domestic law;  where parts of the Agreements are not incorporated, the 
WTO Agreement can be applied directly.  Hence, private individuals can invoke the WTO Agreement before national courts.  Mongolia is not a signato ry to the Agreement on Government Procurement 
and the Agreement on Trade in Civil Aircraft.  Since 1997, Mongolia has made a number of notifications to the WTO (Table II.2). 
21. Mongolia bound all its tariffs under GATT 1994 on its accession to the WTO.  The majority  
are bound at a ceiling rate of 20%, which is higher th an applied duties (5% for most of goods).  It 
committed to eliminating export subsidies under the Foreign Investment Law for foreign invested 
enterprises that export more than 50% of thei r output by 31 December 2002.  Mongolia also 
committed to eliminating, within ten years of the date  of its accession, an expor t duty at the rate of not 
more than 30% ad valorem  on the export of raw cashmere. 
22. Mongolia made various GATS commitments during its accession (Table IV.3).  While it did 
not participate in the extended negotiations on  financial services (Fifth Protocol, adopted 
14 November 1997) and telecommunications (Fourth Protocol, adopted 30 April 1996), its accession 
commitments on services covered certain of these subsectors (see Chapter IV(6)).  Mongolia has 
made no MFN exemptions. 
23. Mongolia has not been a party to any disput es under the WTO dispute settlement mechanism. WT/TPR/S/145 Trade Policy Review 
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Table II.2 
Principal notifications under WTO Agreements, as at 20 September 2004 
Agreement – Committee Document reference and date Requirement/Contents 
Agreement on Agriculture G/AG/N/MNG/6, 09 June 2000 Export subsidies under Article 10 and 18.2 of the 
Agreement 
 G/AG/N/MNG/5, 09 June 2000 Domestic s upport under Article 18.2 of the Agreement 
(Table D:1 and the relevant supporting tables) 
 G/AG/N/MNG/4, 06 August 1999 Domestic s upport under Article 18.2 of the Agreement 
(Table D:1 and the relevant supporting tables) 
 G/AG/N/MNG/2, 10 August 1998 Domestic s upport under Article 18.2 of the Agreement 
(Table D:1 and the relevant supporting tables) 
Agreement on Textiles and Clothing G/TMB/N/351, 15 May 2000 Notification under Article 3.1 of the Agreement 
 G/TMB/N/350, 15 May 2000 Notification under Article 6.1 of the Agreement 
Agreement on Implementation 
of Article VI of the GATT 
1994 G/ADP/N/1/MNG/1, 16 January 1998 Notifica tion of Laws and Regulations under 
Article 18.5 of the Agreements 
Agreement on Implementation 
of Article VI of the GATT 
1994 G/ADP/N/72/Add.1/Re v.1, 12 October 
2001 Semi-Annual Reports under Article 16.4 of the 
Agreement – Revision 
GATT 1994, Understanding on the Implementation of Article 
XVII G/STR/N/7/MNG, 09 July 2001 State Trading - New and Full Notification Pursuant to 
Article XVII:4(a) of the GATT 1994 and Paragraph 1 
of the Understanding on the Interpretation of Article XVII 
Agreement on Import Licensing Procedures G/LIC/N/1/MNG/1, 27 April 2001 Notification under Article 1.4(a) and 8.2(b) of the 
Agreement 
 G/LIC/N/3/MNG/1, 12 June 2003 Notifica tion under Article 7.3 of the Agreement - 
Replies to Questionnaire on Import Licensing 
Procedures 
Agreement on Pre-shipment Inspection G/PSI/N/1/Add.7, 24 February 1998 Pre-ship ment Inspection - Notifications under 
Article 5 of the Agreement – Addendum 
Decisions of Contracting 
Parties on GATS Article III G/MA/NTM/QR/1/Add.6, 20 September 
1999 Notifications of Quantitative Restrictions - Note by 
the Secretariat – Addendum 
 G/MA/NTM/QR/1/Add.8, 01 March 2002 Notificati ons of Quantitative Restrictions - Note by 
the Secretariat – Addendum 
Agreement on Rules of Origin G/RO/N/20/Rev.1, 27 July  1998 Notifications under Arti cle 5 and Paragraph 4 of 
Annex II of the Agreement on Rules of Origin - Costa 
Rica, Haiti, Maldives, Mongolia – Revision 
Agreement on Subsidies and Countervailing Measures G/SCM/N/60/MNG 
G/SCM/N/71/MNG 
G/SCM/N/95/MNG, 06 September 2004 Subsidies - Updating New and Full Notifications 
Pursuant to Article XVI:1 of the GATT 1994 and 
Article 25 of the Agreement on Subsidies and 
Countervailing Measures 
 G/SCM/N/68/Add.1/Rev.1, 16 October 
2001 Semi-Annual Reports under Article 25.11 of the 
Agreement – Revision 
 G/SCM/N/1/MNG/2, 06 September 2004 Notif ication of Laws and Regulations under 
Article 32.6 of the Agreement 
 G/SCM/N/1/MNG/1, 14 January 1998 Notifi cation of Laws and Regulations under 
Article 18.5 and 32.6 of the Agreements 
Agreement on Safeguards G/SG/N/1/MNG/1,  14 January 1998 Notifications of La ws, Regulations and Administrative 
Procedures Relating to Safeguard Measures 
Agreement on Sanitary and Phytosanitary Measures G/SPS/N/MNG/2, 05 March 2004 Notification of  Emergency Measures - Chicken and 
chicken products 
Agreement on Technical 
Barriers to Trade G/TBT/CS/N/65, 21 March 1997 Notificati on under Paragraph (c) of the WTO TBT 
Code of Good Practice (Notification of acceptance of 
the WTO TBT Code of Good Practice) 
 G/TBT/10.7/N/17, 05 Se ptember 1997 Notification 
Table II.2 (cont'd)Mongolia WT/TPR/S/145 
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Agreement – Committee Document reference and date Requirement/Contents 
 G/TBT/10.7/N/18, 05 Se ptember 1997 Notification 
 G/TBT/2/Add.44, 29 January 1998 Implementa tion and Administration of the Agreement 
on Technical Barriers to Trade - Addendum - 
Communication from Mongolia 
Agreement on Trade-Related Investment Measures G/TRIMS/N/2/Rev.8, 19 July 2000 Notifica tions under Article 6.2 of the TRIMs 
Agreement of Publications in which TRIMs may be 
Found – Revision 
Agreement on Trade-Related Aspects of Intellectual Property 
Rights IP/N/6/MNG/1, 09 November 1998 Checklist of Issues on Enforcement – Responses from 
Mongolia 
 IP/N/1/MNG/C/1/Rev.1, 30 October 1998 Main Dedicated Intellectual Property Laws and 
Regulations Notified under Article 63.2 of the 
Agreement – Revision 
 IP/N/1/MNG/1/Add.1, 16 July 1998 Notificati on of Laws and Regulations under Article 
63.2 of the Agreement – Addendum 
 IP/N/3/Rev.2/Add.9, 11 May 1998 Notification of Contact Points under Article 69 of the 
Agreement - Note by the Secretariat - Addendum 
Source:  WTO Notifications. 
(ii) Other trade arrangements 
24. Mongolia has not concluded any regional trade ag reements.  Nor is it a member of the Asia 
Pacific Economic Cooperation (APEC).  The author ities consider that joining the Bangkok Agreement 
would offer concrete advantages to Mongolia.11 
25. Mongolia is currently a beneficiary of the Canadian, EU, Japanese and U.S. preferential 
schemes under the Generalized System of Preferen ces.  The authorities are concerned that the 
envisaged full integration of textiles into the mu ltilateral trading system by the end of 2004 would 
promote relocation abroad of joint ventures in the textiles sector. 
26. Mongolia is negotiating a Transit Transport Fr amework Agreement with China and Russia to 
aid the transit of Mongolian products through its neighbouring countries to third countries.  The authorities expect that this would help to make the transit of Mongolian exports in the North-East 
Asian region more efficient, which would improve  the international competitiveness of Mongolian 
products destined for third countries. 
27. Mongolia has concluded various bilateral trade-related arrangements (Table II.3). 
28. In July 2004, Mongolia signed an Agreemen t Concerning the Development of Trade and 
Investment Relations between the Government of Mongolia and the Government of the United States 
(Trade and Investment Framework Agreement (TIF A));  the TIFA establishes a Mongolia-U.S. joint 
council on trade and investment.  The Government  is considering the possibility of negotiating 
free-trade agreements with its major trading part ners, such as the European Union, Japan, the 
Republic of Korea, and the United States. 
                                                     
 
11 The Bangkok Agreement involves a preferential tariff arrangement among members;  current 
members are Bangladesh, China, India, Republic of Ko rea, Lao People's Democratic Republic, and Sri Lanka.  
The ESCAP functions as the s ecretariat for th e Agreement. WT/TPR/S/145 Trade Policy Review 
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Table II.3 
Mongolia's bilateral trade arrangements 
Agreement Date Description 
Trade Agreement between the 
Government of Mongolia and the 
Government of Japan 1 March 1990 Accords MFN treatment with regard to customs duties, clearance 
and products of both parties in the territory of the other party, 
establishes a mixed commission to examine the problems arising 
from the implementation of the agreement. 
Trade Agreement between the 
Government of Mongolia and the 
Government of Lao PDR  25 December 1990 Accords MFN to trade be tween the two countries and provides for 
dispute settlement, transportation, settlement of payments. 
Trade Agreement between the 
Government of Mongolia and the 
Government of the PR of China 1991 .. 
Agreement concerning Trade Relations 
between the Government of Mongolia 
and the Government of the United States 23 January 1991 Accords MFN treatment and non-discriminatory conditions for 
products, customs duties, market access for goods and services, 
provides for trade expansion and promotion, promotion of 
intellectual property, framework for further economic cooperation. 
Agreement between Mongolia and 
Russia/the Soviet Union on Trade and 
Economic Cooperation  12 February 1991 Covers the developmen t of trade and economic cooperation, 
promotion of investment, coope ration in establishing economic 
zones, the development of transit transportation, the increase of the 
exchange of goods, the increase a nd expansion of  border trade and 
economic relations;  a joint commission was established to monitor the implementation of the agreement.  
Trade Agreement between the Government of Mongolia and the 
Government of the Rep. of Korea  28 March 1991 Accords MFN and national treatment, non-discrimination with 
regard to imports from both countries, facilitates transit 
transportation, provides for dispute settlement. 
Trade and Economic Cooperation 
Agreement between the Government of 
Mongolia and the Government of 
Bulgaria 1 May 1991 Accords MFN treatment to trade and economic cooperation, 
including customs tariffs, transportation, provides for the 
negotiation of bilateral agreemen ts on investment promotion and 
protection, avoidance of double ta xation, exchange of information 
with regard to economic activities, investment, taxation, banking, insurance, etc. 
Agreement between the Government of 
Mongolia and the Government of the PR 
of China on the Access to Sea and Transit Transportation by Mongolia 
through the territory of the PRC  26 August 1991 Recognizes the rights of Mongolia to access the sea and transit 
goods through the territory of PRC, sets out general rules for 
transiting poisonous and perishable goods, restricts transit transportation of narcotic drugs, infectious micro-organisms, etc.; 
also sets rules for charges rela ted to transit transportation. 
Trade Agreement between the 
Government of Mongolia and the 
Government of Nepal January 1992 Accords MFN treatment;  parties undertake to facilitate 
transportation. 
Trade and Economic Cooperation Agreement between the Government of 
Mongolia and the Government of the Republic of Belarus 24 January 1992 Accords MFN treatment to economic and trade cooperation, 
including transit transportation, customs tariffs. 
Agreement between the Government of Mongolia and the Government of India 
on Trade and Economic Cooperation 17 April 1992 Promotes economic and t echnical cooperation between Mongolia 
and India, includes Mongolia in technical cooperation programme. 
Trade, Economic and Technical 
Cooperation Agreement between the Government of Mongolia and the 
Government of Turkey 29 May 1992 Accords MFN treatment, non-discrimination, identifies sectors for 
cooperation such as agriculture, industry, SMEs, construction, transportation, free zones, etc. ; provides for dispute settlement. 
Agreement between Mongolia and the 
EEC on Trade and Economic 
Cooperation 16 June 1992 Accords MFN treatment with  regard to imports, exports and re-
exports of all goods exchanged between Mongolia and the 
Community, identifies sectors of economic cooperation, including 
industry, mining, agriculture, science, energy, communication, 
environmental protection, tourism, intellectual property, standards, 
and statistics. 
Agreement between the Government of 
Mongolia and the Government of the 
Russian Federation on Mongolia's Access to the Sea by transiting through 
Russian Territory 19 October 1992 Covers the rights of Mongolia on free movement of transit 
transportation, utilization of sea por ts, freight storage, reshipment, 
application of Russian domestic tariffs on transportation and compliance by both parties with ta riffs imposed under international 
agreements to which both countries are parties.  
Table II.3 (cont'd) Mongolia WT/TPR/S/145 
 Page 21 
 
 
Agreement Date Description 
Trade and Economic Cooperation 
Agreement between the Government of 
Mongolia and the Government of the Republic of Kazakhstan 27 October 1992 Accords MFN treatment to trade and economic cooperation, 
including customs, transit transportation;  establishes 
Intergovernmental Commission. 
Agreement between the Government of 
Mongolia and the Government of 
Austria Concerning Economic 
Cooperation 15 December 1992 Promotes economic cooperation and identifies sectors of 
cooperation such as energy, roads, construction, railways, etc.; 
establishes a Joint Commission to  monitor the implementation of 
the agreement. 
Trade and Economic Cooperation Agreement between the Government of 
Mongolia and the Government of 
Kyrgyz Republic  10 July 1993 Accords MFN treatment to trade and economic cooperation, as well 
as transit transportation and customs services. 
Trade and Commerce Agreement between the Government of Mongolia 
and the Government of Canada 8 June 1994 Accords MFN treatment with regard to tariffs and other export and 
import charges, provides for facilita tion of transit transportation, 
transparency of information and settlement of disputes. 
Agreement between the Government of 
Mongolia and the EEC on Trade in 
Textiles  31 December 1997 Applies to trade in textile  products originating from Mongolia, sets 
limits to its exports to the Community. 
Trade Agreement between the 
Government of Mongolia and the 
Government of Viet Nam 13 December 1999 Accords MFN to trade, transportation, customs and taxation, 
provides for transit transportation through the territories of the 
parties, as well as for dispute settlement. 
Trade Agreement between the Government of Mongolia and the 
Government of Cuba 9 November 2001 Accords MFN to exchange of goods and services, provides for the 
promotion of activities related to fa irs, exhibitions, and other trade 
activities, recognizes that sanitary and phytosanitary requirements do not necessarily create barriers to trade, establishes 
intergovernmental Commission, sets  non-discriminatory principles 
with regard to trade between the two countries. 
Agreement between the Government of Mongolia and the Government of the 
United States concerning the 
Development of Trade and Investment Relations/TIFA 15 July 2004 Establishes Joint Trade and Investment Council and provides for 
further development of trade and investment relations between the 
two countries. 
.. Not available. 
Note: This list does not include bilateral agreements between Mongolia and its trading partners  concerning customs cooperation,  
quality certification of goods, general economic and tec hnical cooperation, investme nt, and double taxation. 
Source:  Information provided by the Mongolian authorities. 
(6) FOREIGN INVESTMENT REGIME  
29. The main law governing foreign investment in  Mongolia is the Foreign Investment Law.12 
Under this law, wholly foreign-owned business entities are allowed;  inward foreign direct investment 
(FDI) receives national treatment.  No restriction is imposed on the size and content of FDI into 
Mongolia, except that the production of weapons is pr ohibited.  Foreign nationals or companies are 
not allowed to own land in Mongolia;  they can lease land for up to 60 years.  FDI into Mongolia cannot be legally expropriated.  Foreign investor s can remit income, profits and payments out of 
Mongolia without any barriers;  they are subject to a 20% withholding tax.  The Foreign Investment and Foreign Trade Agency (FIFTA) is responsible  for foreign investment policy formulation and 
implementation.  
                                                     
 
12 The Foreign Investment Law was adopted in 1991.  Subsequently, the minimum amount for foreign 
investment was set at US$10,000.  FDI in the banking sector is covered under the Banking Law. WT/TPR/S/145 Trade Policy Review 
Page 22 
 
 
30. Mongolia has concluded agreements on avoi dance of double taxation with 31 countries.13  It 
has also signed agreements on Mutual Protection and Promotion of Investments with 34 countries.14  
Mongolia is a signatory of the Multila teral Investment Guarantee Agency. 
(7) TRADE -RELATED TECHNICAL ASSISTANCE  
31. Technical assistance from various sources has be en instrumental in supporting Mongolia's 
transition to a market-based economy and open tr ade regime.  For example, Germany has been 
providing technical assistance on trade policy and WTO issues through and International Trade Policy/WTO project in collaboration with the M ongolian Ministry of Industry.  Various other 
countries and agencies, including the Asian De velopment Bank, United Nations Development 
Programme, United Nations Industria l Development Organization, Japan, United States Agency for 
International Development, World Bank, and the WT O have also provided trade-related technical 
assistance to Mongolia. 
32. The WTO's technical assistance has focused on increasing government officials' 
understanding of WTO-related issues .  Since 1997, Mongolia has participated in some 52 regional and 
11 national training activities, which have covered ma ny WTO subjects.  Mongolia also took part in 
WTO Global Workshops on:  scheduling of commit ments under GATS (in 2002);  training of trainers 
and labelling (in 2003);  domestic re gulation for services, and technical barriers to trade (in 2004);  
and cross-border supply of services (in 2005).  Mongo lian officials participated in the 2004 edition of 
the 12-week WTO trade policy course and the 10
th Specialized Dispute Settlement Course held in 
Geneva. 
33. While past assistance from these sources has be en valuable, it would appear that further 
efforts might be required in a number of areas.  As study conducted by the Asian Development Bank, 
at the request of the Ministry of Industry and Trade, drew up a list of technical assistance still needed.  
Examples of needs identified in the study include  assistance concerning :  trade remedy measures, 
rules of origin (if Mongolia is to conclude any fr ee trade agreements), economic costs and benefits of 
export taxes, duty exemption facility, export de velopment functions, competitiveness of transport 
sector, and further analysis of trade negotiations.15  In addition, the authorities consider that further 
efforts are also required in a number of areas includi ng:  training on WTO rules and regulations as 
well as Mongolia's commitments for new members of Parliament, who were elected in June 2004;  
training on dispute settlement mechanism for lawy ers;  and capacity building on the multilateral 
trading system for academic institutions.  Mongolia al so wishes to participate in the Joint Integrated 
Technical Assistance Programme, which has been  organized by the WTO, the United Nations 
Conference on Trade and Development, and the International Trade Centre. 
                                                      
13 These are:  Belarus, Belgium, Bulgaria, Canada , China, Czech Republic, Egypt, France, Germany, 
Hungary, India, Indonesia, Italy,  Kazakhstan, Kuwait, Kyrgyz Republic, Luxembourg, Korea, Malaysia, 
Netherlands, Poland, Romania, Russian Federation, Si ngapore, Switzerland, Turk ey, Ukraine, United Arab 
Emirates, United Kingdom, Uzbekistan, and Viet Nam. 
14 These are:  Austria, Belarus,  Belgium, Bulgaria, Ch ina, Czech Republic, Cuba, Denmark, France, 
Germany, Hungary, India, Indonesia, Italy, Japan, Kazakhstan, Korea, Kuwait, Kyrgyz Republic, Lao People's 
Democratic Republic, Malaysia, Netherlands, Philippines,  Poland, Romania, Russian Federation, Singapore, 
Switzerland, Turkey, Ukraine, Unite d Arab Emirates, United Kingdom,  United States, and Viet Nam. 
15 Asian Development Bank (2003e).