Mis en ligne le 2012-09-24

The increase in national index compared to the previous month was mainly due to 15.2 percent increase in education.

According to the report of the Bank of Mongolia, money supply (broad money or M2) at the end of August 2012, reached to 6997.1 bln.tog, increased by of 43.6 bln.tog or 0.6 percent compared to the previous month, and increased by 1093.9 bln.tog or 18.5 percent compared to same period of the previous year.

At the end of August 2012, currency issued in circulation reached 814.9 bln.tog, increased by 13.5 bln.tog or 1.7 percent compared to the previous month, and increased by 109.1 bln.tog or 15.5 percent compared to same period of the previous year.

Loans outstanding at the end of August 2012, amounted to 6675.1 bln.tog, up by 246.6 bln.tog or 3.8 percent compared to the previous month, and up by 1804.3 bln.tog or 37.0 percent compared to same period of the previous year.

Principals in arrears at the end of August 2012, reached 100.6 bln.tog, increased by 15.5 bln.tog or 18.2 percent compared to the previous month, and increased by 33.6 bln.tog or 50.1 percent compared to same period of the previous year.

At the end of August 2012, the non-performing loans over the bank system reached 312.3 bln.tog, showing an increase of 6.6 bln.tog or 2.1 percent compared to the previous month, and a decrease of 63.6 bln.tog or 16.9 percent compared to same period of the previous year.

In August 2012, there were 23 trading days and 6.9 mln.shares valued at 50.7 bln.tog were traded.

In the first 8 months of 2012, total equilibrated revenue and grants of the General Government Budget amounted to 3099.5 bln.tog and total expenditure and net lending amounted to 3582.6 bln.tog, representing deficit of 483.1 bln.tog in the equilibrated balance of General Government Budget.

In the first 8 months of 2012, current revenue of the General Government Budget amounted to 3088.5 bln.tog and current expenditure reached 2761.0 bln.tog. Thus, the budget equilibrated current balance was in surplus of 327.4 bln.tog.

Compared to same period of the previous year, tax revenue increased by 437.5 bln.tog or 18.7 percent. The increase was mainly due to the increases of 144.8 bln.tog or 52.9 percent in social security contribution, 138.5 bln.tog or 34.1 percent in other taxes, 127.1 bln.tog or 14.0 percent in taxes on goods and services, 18.5 bln.tog or 3.5 percent in income tax, 5.9 bln.tog or 2.7 percent in taxes on foreign trade and 2.6 bln.tog or 27.0 percent property taxes.

Compared to same period of the previous year, non-tax revenue desreased by 54.0 bln.tog or 14.9 percent. The desrease was mainly due to the increases of 82.7 bln.tog or 39.8 percent in revenues from budjet entities, 1.7 bln.tog or 4.5 percent in revenues from dividends although there was increases of 14.2 bln.tog or 45.3 percent in revenues from oil petroleum, 10.0 bln.tog or 34.9 percent in revenues from others, 4.1 bln.tog or 14.7 percent in revenues from interest and 1.4 bln.tog or 4.9 percent in navigation fee.

In the first 8 months of 2012, total expenditure and net lending of the General Government Budget increased by 1052.6 bln.tog or 41.6 percent to 3582.6 bln.tog compared to same period of the previous year. This was mainly due to increases of 434.1 bln.tog or 40.7 percent in subsidies and transfers, 352.2 bln.tog or 82.4 percent in capital expenditure, 327.3 bln.tog or 37.6 percent in expenditure of goods and services, 37.5 bln.tog or 2.5 times in interest payments although there was decreases of 98.5 bln.tog or 70.3 percent in lending minus repayments.

In the first 8 months of 2012, spending of 779.9 bln.tog on capital expenditure increased by 352.2 bln.tog or 82.4 percent compared to same period of the previous year. This was mainly due to increases of 367.9 bln.tog or 94.4 percent in capital expenditure of domestic sources although there was decreases of 15.6 bln.tog or 41.2 percent in capital expenditure of foreign financed compared to same period of the previous year.

In the first 8 months of 2012, Mongolia traded with 124 countries from all over the world and total external trade turnover reached 7531.1 mln.US dollars, of which exports made up 2871.6 mln.US dollars and imports made up 4659.5 mln.US dollars.

Foreign trade balance showed a deficit of 1788.0 mln.US dollars in the first 8 months of 2012, reflecting 444.5 mln.US dollars or 33.1 percent increase compared to same period of the previous year. The foreign trade deficit in the first 8 months of 2012 was mainly caused by the fact that the import growth was higher by 10.4 points than the export growth.
Total external trade turnover increased by 492.3 mln.US dollars or 7.0 percent, of which imports up by 468.4 mln.US dollars or 11.2 percent, and exports up by 23.9 mln.US dollars or 0.8 percent, compared to same period of the previous year.

Mineral products, natural or cultured stones, precious metal, jewelry, coins, raw & processed hides, skins, fur & articles, animal origin products, and textile articles accounted for 98.3 percent of the total export value amount.

11 mai 2012

Mis en ligne le 2012-05-05

LAW OF MONGOLIA

… 2012 Ulaanbaatar

ON REGULATION OF FOREIGN INVESTMENT IN BUSINESS ENTITIES OF
STRATEGIC IMPORTANCE

CHAPTER ONE
GENERAL PROVISIONS

Article 1. Purpose of the Law

1.1.The purpose of this law is to regulate relations concerning investment to
business entities operating in sectors of strategic importance by foreign investors, other
related parties of common interest with them, and third parties, and to regulate relations
related to granting of licenses to them.

Article 2. Legislation on foreign investment to business entities of strategic
importance

2.1.Legislation on foreign investment to business entities of strategic importance
shall consist of the Constitution1, Law on Foreign Investment 2, Law on National

Security 3, this Law, and other legislative acts adopted pursuant to these laws.

2.2 . If an international treaty to which Mongolia is a party is inconsistent with this

L aw, then the provisions of the internation al treaty shall prevail

Article 3. Scope of the Law

3.1.Entities controlled by foreign Governments, international organizations,
entities controlled by international organizations shall obtain permission from the
Government of Mongolia upon making investments to Mongolia.

3.2.Foreign investor, related entity with common interest and third parties shall
obtain permission from the Government of Mongolia when concluding transactions
referred to in Article 7 of this Law to own shares of companies operating in one of the
sectors or activities of strategic importance or to own shares of companies with market
value over 100.0 billion togrogs.

3.3.This Law shall not concern foreign investments made within the framework of
international treaties and conventions to which Mongolia is a party, and as part of
military technical cooperation.

1The Constitution of Mongolia – published in “ State Bulletin” No.1, 1992.
2Law on Foreign Investment – published in “ State Bulletin” No. 4,5 , 1993.
3Law on National Security – published in “ State Bulletin” No..3, 2002.
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3.4.Foreign investor, other related party with common interest and third party are
prohibited to conclude transactions breaching Article 4.1.1. of this Law.

3.5. If transaction made outside the territory of Mongolia contain features
indicated in Article 3.1- 3.2 of this Law, this Law shall apply.

3.6. This Law shall apply to foreign investor, related entity with common interest,
and third party that seek acquiring shares of companies referred to in Article 4.1.1
directly and indirectly.

3.7. The share of Mongolian party of entities of strategic importance shall be no
less than 51percent.

Article 4. Definition of terms

4.1. Terms used in this Law shall be understood in the following meaning:

4.1.1.“ entity of strategic importance” / hereinafter “ strategic entity”/ means
business entity operating in sector or activity referred to in Article 5 of this Law or
company with market value over 100.0 billion togrogs;

4.1.2.“ acquire indirectly” means to acquire rights to dispose shares
through foreign investor, related entity with common interest and third party;

4.1.3.“ invalidate management decision” means possibility for foreign
investor, related entity with common interest and through third party to invalidate the
management decision ought to be approved by the majority in accordance with laws,
bylaw of the entity or contract;

4.1.4.“ foreign investor” means entity referred to in Article 3.2 of the Law on
Foreign Investment, excluding entities referred to in Article 3.1 of this Law;

4.1.5.“ related entity with common interest” means entity referred to in
Article 99.1. of the Company Law;

4.1.6.“ third party” means legal person or individual who has continued ties
with foreign investor and related entity with common interest and not registered in
Mongolia.

4.1.7.“ market value” means the closing value of the given day of company
referred to in Article 4.1.1. of this Law, registered at specific stock exchange for specific
period of time;

4.1.8.“ Mongolian party” means citizen of Mongolia, national business
entity, Government of Mongolia, entities controlled by it.
4.1.9.“ national business entity” means entities founded by citizen or legal
person of Mongolia and owned 100 percent by citizen and legal peг son of Mongolia.

CHAPTER TWO
SECTOR, ACTIVITY, BUSINESS ENTITY OF STRATEGIC IMPORTANCE,
MAKING TRANSACTIONS

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Article 5.Sector, activity, business entity of strategic importance

5.1.Sectors of strategic importance refers to minerals, food, agriculture, power
supply, road, transportation, information and communication sectors, which are
strategically important for meeting basic needs of the population, maintaining economic
independence and normal functioning, generating national revenue, and ensuring
national security.

5.2.The following activities refer to activities of strategic importance:

5.2.1.production and distribution of industrial explosive materials;
5.2.2.activities related to maintaining flight security;
5.2.3.TB and radio activity broadcasting for more than half of the
population;
5.2.4.communications services throughout the territory of Mongolia;
5.2.5.activities for guaranteeing safety, quality and supply of food;
5.2.6.oil related activities;
5.2.7.power supply activities;
5.2.8.road and transportation activities;
5.2.9.activities of using water sources of urban settlements;
5.2.10.activities which may cause substantial negative impact both directly
and indirectly on eco system, natural resources other than minerals, and biodiversity of
Mongolia and the given local area;
5.2.11.immovable property market;
5.2.12.extraction of radio active natural resources;
5.2.13.preparation and processing of livestock skins, hides, wool, and
cashmere;
5.2.14.use, production, distribution of chemical toxic substances;
5.2.15.use of recombinant technology and substances that cause
infectious diseases in biotechnology production;

5.2.16.activity which may directly or indirectly affect the market and price
of key export items of mining, including gold, copper, coal, iron ore, and rare earth
elements

5.3.Business entities with market value over 100.0 billion togrogs shall be entity
of strategic importance.

Article 6.Transactions which require permission

6.1.Transactions which require permission in accordance with this Law
/hereinafter referred to “ transaction”/ include those which will:
6.1.1.provide right to acquire one third or more shares of the strategic
company directly or indirectly;
6.1.2.provide right to carry out the executive management of strategic
entity unilaterally or to appoint the majority of the management team, or to appoint the
majority of the board of directors without any preconditions;
6.1.3.provide right to veto management decision of strategic business
entity;
6.1.4.provide right to exercise management role, determine decision of
strategic entity, and exercise business operational activities ;
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6.1.5.may create buyer or supplier monopoly at international and
Mongolian commodities markets;
6.1.6.may affect directly and indirectly the market and price of key export
items of mining of Mongolia, including gold, copper, coal, iron ore, and rare earth
elements.

6.2.Entity referred to in Article 3.1, 3.2 of this Law shall submit request for
permission to relevant authority within 30 days of the transaction referred to in Article
6.1 of this Law.

CHAPTER THREE
REVIEW OF REQUESTS AND DECISION MAKING BY STATE ORGANIZATION

Article 7.Request for permission

7.1. Entity referred to in Article 3.1, 3.2 of this Law planning to make the
transaction referred to in Article 6 of this Law /hereinafter referred to “ applicant”/ shall
submit its request to state organization in charge of foreign investment in accordance
with the Article 7.2 of this Law.

7.2.Request shall have the following documents attached to it:
7.2.1.application for permission;
7.2.2.document showing state registration in accordance with laws of
respective country;
7.2.3.applicant’s personal ID ;
7.2.4.document showing that entity is foreign entity without the status of
legal person???? тухайн хууль дагуу мэдүүлэгч -
хуулийн э тгээдийн эрхгүй гадаадын байгууллагын байгуулагдсаныг нотлох баримт
бичиг;
7.2.5.document showing establishment of the applicant-legal person;
7.2.6.draft contract describing the content of the transaction;
7.2.7.document containing information applicant’s in
years preceding the request ;
7.2.8.document showing information on the related entity with common
interest with the applicant, its composition and cooperation between participating parties
; 7.2.9.document containing information on entities that belong to the applicant or
entities that control the applicant;
7.2.10.documents on shares;
7.2.11.draft business plan.
7.3.Applicant shall submit certified copies of the documents listed in Article 7.2 of
this Law to the state organization in charge of foreign investment.

Article 8.Decision making on request

8.1.State organization in charge of foreign investment shall receive requests that
meet the following criteria:
8.1.1.any activity or nature of investment do not contradict the national
security concept of Mongolia;
8.1.2.applicant meets conditions to abide by legislations of Mongolia and
established business codes;
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5

8.1.3.the investment does not contain elements of restraining competition
in specific sector and creating monopoly ;
8.1.4.the investment does not provide substantial effect on national budget
revenue and other policy activities of Mongolia;
8.1.5.the investment does not provide substantial effect on activities of
national investors and business entrepreneurs of Mongolia .

8.2.State organization in charge of foreign investment shall carry out the following
actions within 14 days of receipt of request:
8.2.1.check completeness of request and demand missing documents if
incomplete, and if complete, register request;
8.2.2.return request to the applicant without further action if the applicant
did not meet the requirement indicated in Article 8.2.1 of this Law within 30 days.
8.3.State organization in charge of foreign investment shall submit its proposal to
the Government on feasibility of accepting the request within 3 months.
8.4.The Government shall make a decision to grant or not the requested
permission within 45 days of receiving the proposal with relevant supporting documents
from the state organization in charge of foreign investment referred to in Article 8.3 of
this Law.
8.5.State organization in charge of foreign investment shall notify the applicant
within 15 days of receiving the decision referred to in Article 8.4 of this Law.
8.6.Detailed procedure for reviewing request and making decision on it shall be
approved by the Government in accordance with this Law.
Article 9.Informing about transactions that took place
9.1.Foreign investor, related entity with common interest and third party shall
notify the state organization in charge of foreign investment within 30 days of its direct
and indirect acquisition ranging from five percent to the percentage referred to in Article
6.1.1 of this Law of a strategic company in accordance with the procedure adopted by
the Government of Mongolia.
9.2.Within 180 days of entering info force of this Law, entity referred to Article
3.1, 3.2 of this Law shall provide information to the state organization in charge of
foreign investment on its ownership from five percent and more of shares of strategic
company that was held prior to this Law became effective.

CHAPTER FOUR
MISCELLANUOUS
Article 10.Legal effect
10.1.Transactions that breach requirements set forth by this Law and Article 6
shall be invalid.
10.2.Relevant authority shall discontinue activities of the strategic entity that
breached this Law or invalidate its license.

Article 11.Entering info force

11.1.This Law shall enter into force on the day of approval.

Mis en ligne le 2012-05-01

Mongolia plans to set up a new sovereign wealth fund with $600 million after the country’s June elections, Vice Minister of Finance Ganhuyag Chuluun Hutagt said at a conference in London today (2012-04-30).

The country also plans to raise the size of its existing stabilization fund to $500 million from $200 million by the end of the year, he told reporters at the Mongolia Capital Markets Day conference at the London Stock Exchange.

The new fund, which will finance pensions, is set to be created on July 1, Ganhuyag said.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

To contact the editor responsible for this story: Jacqueline Simmons at jackiem@bloomberg.net

Mis en ligne le 2012-04-29

A nasty bout of resource nationalism in Central Asia is worrying investors brave enough to invest in frontier markets. Mongolia and Kyrgyzstan are at it, with the Kyrgyz government this week announcing it has revoked 46 gold mining licences in what it calls an attempt to clean up the mining industry.

At least none of the Kyrgyz licences are for the country’s major mining operations. The situation is different in Mongolia, which on April 16 suddenly suspended the mining licenses of SouthGobi Resources.

SouthGobi’s majority owner Ivanhoe Mines had agreed to sell a 57.6 per cent stake in the company to state-run Aluminum Corporation of China (Chalco). In response, the government is now busy rushing through parliament legislation that puts limits on foreign investment into enterprises with “strategic significance”.

According to comments attributed to Minister of Foreign Affairs G Zandanshatar on the parliament website, he told MPs that the law could be passed “within two weeks”. Zandanshatar said it is only a “coincidence” that the government is rushing through this law following the revoking of SouthGobi’s licenses and ahead of the June parliamentary elections.

Nevertheless, Chinese influence is a touchy subject for many Mongolian people, and bashing foreign investors, especially Chinese ones, goes down well with voters. “This contract should be terminated immediately,” Jargalsaikhan Dambadarjaa, an economist and popular local talk show host said on his programme, speaking for many. “If someone doesn’t disrupt the SouthGobi deal, it will become Chinese property.”

SouthGobi Resources is one of the country’s largest exporters, shipping one in every five tonnes of Mongolian coking coal to China. The company is majority owned by Ivanhoe Mines, but Chalco earlier in April agreed with Ivanhoe to buy the majority stake for $926 million, a hefty 28 per cent premium to the market. The announcement appeared to take the government by surprise and two weeks later it suddenly announced it would suspend SouthGobi’s licenses, including that for the flagship Ovoot Tolgoi coal mine, as they had not authorised the deal.

By Nicholas Watson

Source: http://blogs.ft.com