|“Doing business with Mongolia”, “UK Investors show” бизнес хөтөлбөр March 27-April 02. 2019 ЛОНДОН ХОТ, ИХ БРИТАНИ||Mongolian Business Database||London UK|
|SYMPOSIUM ON GLOBAL MARKETS Nationalism and Protectionism: The United States in the International Arena June 17-18, 2019 The Center for American and International Law Plano, Texas, USA||The Center for American and International Law (CAILAW)||Plano Texas June 17-18 2019|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
ULAANBAATAR – The Board of Directors of the American Chamber of Commerce (AmCham) in Mongolia is pleased to announce that Mr. Stephen J. Potter has been appointed the new Chairman of the AmCham Mongolia Board of Directors, effective January 1, 2018. Currently, Steve Potter is a CEO of Taskonir Trading LLC and previously served as the Managing Director of Wagner Asia Equipment.
Steve has 40 years of Caterpillar and Caterpillar Dealer management experience in 10 countries and 15 years of competency in organizational and general management. Steve worked for PT Trakindo Utama LLC in Indonesia as a General Manager and has extensive experience in providing advisory services, working for the SME Advisory Services division of the European Bank for Reconstruction and Development. He has broad expertise in business systems and processes, and a very strong background in the mining industry, including mining equipment rentals, aftermarket support, and finance. Steve holds an MBA from the Scottish Business School of the University of Edinburgh and a BA in economics from the University of Keele in England.
Following his appointment, Mr. Potter said, “It is a great honor for me to be appointed as the Chairman of AmCham Mongolia. I would like to say thank you to the outgoing chairman, whose efforts, consistency, and conscientious approach have significantly helped to take AmCham Mongolia to ever higher levels of recognition as the country’s premier business organization. As the new chairman, I will strive to continue to enhance this reputation via a clear and forward looking strategy that will bring concrete and positive changes to the business environment and for our members.”
Outgoing Chairman of the AmCham Mongolia Board of Directors Jay Liotta commented, “Steve brings wealth of experience, business professionalism, and broad knowledge of the country’s minerals sector and business environment. He’s a long-time and successful leader in business and promoting investment with Mongolia. I am confident that AmCham’s members and the organization will benefit tremendously under his leadership.”
ULAANBAATAR (Reuters) - Mongolia has delayed until 2019 the completion of a long-awaited $500-million airport project, originally expected this year, the transport minister said, a setback in efforts to diversify a mining-dependent economy.
To reduce its dependence on commodities such as coal and copper, Mongolia has ambitions to become an air freight hub for northern Asia and wants to develop tourism.
But the new airport is unlikely to open this year as originally scheduled, Roads and Transportation Minister Jadamba Bat-Erdene said, as Mongolia negotiates a management contract with Japanese investors.
“The airport was expected to be operational this year, but plans are for it to be operational within the next year, due to management issues,” he said on the ministry’s official website.
“It is planned to set up a joint management team headed by Japan,” he said in the statement, without elaborating.
The new airport is intended to replace the Chinggis Khan (Genghis Khan) International Airport, and take the name of the country’s 13th-century ruler, regarded as a national symbol.
Mongolia will be able to receive 3 million passengers a year by 2024 at the new airport, about 50 km (31 miles) from Ulaanbaatar, the capital. Its predecessor, a one-way runway built near a mountain range, is prone to disruptions and flight cancellations.
Japan’s Mitsubishi Corp. and Chiyoda are leading construction, with Samsung C&T acting as a subcontractor.
The Chinese Export-Import Bank is providing $140 million to finance a 32.2-km (20-mile) road to the airport. Now under construction, the road is set to be completed by October.
The International Monetary Fund encouraged Mongolia to diversify away from mining as part of a $5.5-billion bailout agreed last year to stabilize its crisis-hit economy.
Coal was the biggest driver of growth in 2017, but exports were hit by transport bottlenecks at the border with China, Mongolia’s biggest customer.
Although the airport could generate non-mining growth, its success could depend on Mongolia allowing more airlines into the market and ending favorable treatment for the state carrier, analysts have said.
Reporting by Terrence Edwards; Editing by David Stanway and Clarence Fernandez
Mongolia began 2017 facing yet another credit crisis. It ended the year clutching a massive IMF-led bailout to reform the central bank, eradicate related-party lending and create a thriving modern banking sector. So much for the theory – now the hard work starts Order If there was a turning point for Mongolia’s economy, it happened on the last day of May 2017. The frontier market, battered by low commodity prices, was locked into a state of crisis. Public debt had tripled in the six years to the end of 2016, to $8.5 billion, or 85% of GDP. Per-capita income was down for the third year in a row, the deficit had spiked to 17% of output and foreign reserves had dipped below $1 billion for the first time since the global financial crisis. Lawmakers in the capital Ulaan Bataar had been nervously eyeing a date with destiny. The Development Bank of Mongolia (DBM), a cash-strapped policy lender, faced repayment on a $580 million bond, due in March. Equating non-payment to a sovereign default, Moody’s placed Mongolia on review for a downgrade. John Bell, Khan Bank “At the time, the market wasn’t sure where that payment would come from,” says John Bell, chief executive of Khan Bank, Mongolia’s largest retail lender.In the end, salvation came, as it so often has in the past, from Washington. In May, the IMF signed off on a three-year, $434 million loan, part of a $5.5 billion economic stabilization package that included soft loans from Japan and Korea, fiscal and project support from the World Bank and the Asian Development Bank, and a Rmb15 billion ($2.3 billion) swap line with the People’s Bank of China. It also allowed DBM to swap its debt for new sovereign bonds worth $600 million, due 2024. This was no ordinary bailout. Just eight years before, the IMF agreed to a $242 million package that briefly sparked the economy back to life – the fifth IMF-led facility since Mongolia’s transition to market-economy status in 1990. But collapsing commodity prices and doubts over the future of the Oyu Tolgoi mine left the state’s finances more imperilled. In hindsight, the 2009 bailout had been a wasted opportunity. Paid up-front in a lump sum, it allowed the state to repay the loan as soon as the economy improved, and thus to “soft-pedal on vital reforms”, says a person with direct knowledge of the package. The net result: “It didn’t broaden or deepen the financial economy, create better banks, or instil the need to be more fiscally responsible.”IMF leaders in Washington, aware that earlier bailouts were poorly implemented, were not going to make the same mistake a sixth time. The 2017 bailout is designed to succeed. If it doesn’t, neither the Fund, nor the government, can have any excuses. To that end, it’s worth combing through the extended fund facility, to give it its full name, to reveal the realities and the limits of its ambitions. The first thing that strikes you about the 2017 bailout is its size. In relative terms, it is the fourth-largest in the IMF’s history: a $5.5 billion loan package to prop up an $11.2 billion economy. The second is how high the bar has been set. Take the asset-quality review (AQR), the most demanding and important feature of the bailout, which was still in process when Asiamoney went to press. At first glance, it is a typical stress test designed to weed out poorer-quality lenders from the herd. But at heart, it’s so much more. Executed by PwC’s Czech Republic unit, it precisely replicates stressor scenarios used by Europe’s central bank when evaluating the strength of EU-based lenders. That has not gone down well in Ulaan Bataar. “It’s OK to use ECB methodology in a place like Europe, with its mature and advanced banking sector,” says Orkhon Onon, chief executive of Trade and Development Bank of Mongolia (TDB) and president of the Mongolian Bankers Association. “But our modern banking system is just 27 years old. We don’t have deep capital markets, derivatives or project finance. Our banks are highly conservative, taking deposits and using old-fashioned collateral like mining licences and real estate to make loans.” Another bank chief executive weighs in, warning that ECB rules are “not compatible to our situation. European stress tests are carried out in developed economies with advanced tax collection systems. Mongolia is a frontier market at best, landlocked and small, politically unstable and over-reliant on commodities.” The IMF’s response to these perfectly reasonable claims is a simple one. Yes, its officials say in private, ECB-style stress tests may seem like a merciless form of tough love. But they are available and they have been tested and appear to work – so why not use them? In Ulaan Bataar’s financial circles, the fear is that the AQR will shine a harsh light on several banks, including one or more top-tier institutions, and ask some intrusive and awkward questions. These could include if a bank is underfunded, who owns and runs it, what its real stock of impaired loans is, and how it gets and carries out its business. But would that really be so wrong? Many of these questions have never been asked before. Dominated by domestic players (because foreign banks are all but shut out), the banking sector has largely been left to its own devices. This will be the first time that Mongolia’s banks have been subjected, in the IMF’s words, to a “comprehensive diagnosis”: properly dissected and tested using international-quality stress testing. When a lending institution fails here, it tends to be quietly merged with a state-run bank. That happened in 2013, when the fifth largest lender, Savings Bank, was taken over by State Bank, itself the result of the 2009 union of two other failed outfits, Zoos Bank and Anod Bank. “We need the IMF,” sighs the deputy chief executive of a local lender. “We’ve had years to sort out our problems. These laws may look tough, but the ambition is good.” What penalties banks are likely to face if they fail some or all aspects of the stress tests remain to be seen. Central bank rules were changed recently, doubling the minimum amount of paid-in regulatory capital banks must hold on their books, to Tug100 billion ($40 million), with lenders given until 2021 to locate fresh sources of funding. Most big banks are “already well in excess of that number”, says Randolph Koppa, executive vice-chairman of TDB, the country’s leading corporate lender. The rule change was explicitly designed “to shake some of the smaller lenders out of the system, forcing them to shut down or consolidate”, he adds. Around 85% of all domestic banking assets are controlled by five lenders, including TDB, Khan Bank, XacBank and Golomt Bank. The remainder feed off the scraps or are reliant on their parent for new business. The AQR is designed to pinpoint any lender that is likely to require additional provisioning. Banks were slated to complete the review by the end of 2017, with the central bank then set to carry out stress tests in early 2018, before publishing a list of which banks require additional injections of capital, by July. If any lending institution is deemed to lack the requisite strength and resilience, the IMF says it will be recapitalized and restructured as needed. The Fund is clearly preparing for the worst. It tips the banking system’s capital shortfall to be as much as $784 million, or 7% of GDP. In that event, Ulaan Bataar will set up its own version of the Troubled Asset Relief Programme, which purchased toxic assets and equity from US lenders at the height of the global financial crisis. Quite apart from its relative size, a Mongolian Tarp, to be set up in early 2018 and overseen by the central bank, will differ from the original version in one key way. Rather than buying assets directly, it will officially give banks until the end of June 2018 to meet all their recapitalization needs – though bank chief executives widely expect this deadline to be extended to the end of the third quarter. If they can’t, the central bank will dip into Tarp and “invest in each capital-constrained bank on an interim basis until it hits certain benchmarks”, says TDB’s Koppa. “The government will effectively buy stakes in banks in order to improve them. If they succeed, the bank’s shareholders will be able later to buy back their original stakes. If they fail, the government will auction off its stakes.” Any lender that does not pose a systemic risk and that fails to raise enough capital from private sources faces being wound up. While the AQR has largely focused on identifying which banks need capital and which do not, the stress tests will also tackle a series of deeply ingrained defects that have long undermined the financial system. Five in particular stand out, starting with loan resolution. Non-performing loans as a share of total lending hit 8.7% at the end of September 2017, the highest level in eight years, according to central bank data, with deteriorating asset quality blamed on a weak economy and inadequate provisioning. Bankers have long complained about the lack of a viable resolution programme. “We’ve been waiting for years for a commercial law that solves NPLs promptly,” says a senior bank official. “It can take up to 12 years to resolve a failed loan in a satisfactory way. The judicial system is slow, appeals take for ever and too many restructured loans are of dubious quality.” This problem will be tackled in two ways, the IMF said in its May 2017 report. First, by identifying “legal and regulatory obstacles to NPL sales”, and developing a resolution strategy that removes impediments. The London-based Financial Stability Board is expected to approve the strategy by the end of January 2018. And second, to demand that all banks have in place, by July 2018, the right “strategies, policies, and internal capacity” to quickly and effectively be able to resolve failed loans – though how the IMF intends to enforce the new rules once they are up and running remains to be seen. On November 27, the IFC, the private-sector arm of the World Bank, signed a memorandum of understanding with the justice ministry, to reform the bankruptcy framework by strengthening insolvency and debt collection systems. The second challenge involves the central bank itself. For years, people have questioned its reliability and efficacy, not to mention the integrity of some senior officials. Previous Bank of Mongolia chiefs have been accused of overlooking rule-breakers and even channelling state capital to favoured lenders. Moreover, notes one senior bank executive, the governor “is appointed by the prevailing ruling political party, so his independence is not always as strong as it should be”. That problem seems set to change. Senior bankers in Ulaan Bataar nod their heads and cluck with approval when the name of the current BOM governor, Nadmid Bayartsaikhan, is mentioned. “He’s good, especially compared to the previous guys,” says one chief executive. “He’s implementing the stress tests and working with the IMF – and doing it well and willingly.” A new central bank law, which is due to be adopted in the first half of 2018, will, the IMF says, “clarify the BOM’s mandate and strengthen its governance and autonomy”. All members of the Monetary Policy Committee will vote on policy decisions – preventing too much power being concentrated in the hands of one person – while the central bank will also be subject to an annual external audit. Then there’s the thorny issue of governance. As of December 2017, a new banking law linked to the IMF reforms was working its way through parliament. Its myriad aims include improving asset provisioning, strengthening bank resolution and bringing the Deposit Insurance Corporation in line with international best practice. But the big shake-up relates to governance and ownership. Specifically, the new law is designed to expand the investor base, making it harder for banks to be owned and controlled by a single, dominant shareholder, as is the case with Golomt Bank and TDB. Related-party lending is another remnant of a bygone era that the new law aims to eradicate. Successive governments and central bank chiefs have sought, often not too vigorously, to tackle a problem viewed as most pervasive at poorly run lenders dominated by a single shareholder, and which only emerges into the public realm when a bank suffers a financial seizure. That happened when Savings Bank collapsed in 2013. Sifting through the wreckage, the central bank observed that the lender had been in financial peril for at least two years and linked its failure to loans made to “related interests of the bank’s only shareholder”, a conglomerate called Just Group. When it failed, Fitch Ratings found that related-party loans and non-performing loans exceeded capital by more than two times. Can the IMF and the central bank resolve this problem? Related-party lending is second nature to many lenders: it is why so many non-banks decided to get into the business. The IMF is certainly trying. It aims to ensure that by September 2018, no transaction with a related party is “undertaken, restructured or resolved on more favourable terms than [equivalent] transactions with non-related counterparties”. It’s a fancy way of saying: “Don’t try anything because we are watching.” Two final and interconnected factors stand out. Foreign banks remain shut out of the lending industry. Those that are here – notably ING Group, Bank of China (BOC), Industrial and Commercial Bank of China, and the Japanese pair of Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corporation – run limited advisory services via representative offices. Most bankers in Ulaan Bataar say this reticence about doling out full operating licences is rooted in the fear that China’s big state banks will rush in and gobble up the lending market. “We don’t want China to dominate,” admits the chief executive of a leading private bank. “Their companies are already strong enough here as it is.” But how much longer can regulators keep foreign capital out of the banking sector? “They always cite national security when asked about allowing foreign banks in,” notes one industry insider. “But they can’t fob them off for ever. I speak to the guys at BOC. They have Chinese customers who want to put their money to work here, lending to big corporates and to big infrastructure deals related to [Beijing’s] Belt and Road project. But they are stymied at every turn.” Read between the lines of the IMF’s May 2017 report and you sense it would love to see the banking industry attract more foreign capital, as it would probably lead to better corporate governance. Many local operators certainly think so. Khan Bank’s Bell spent nearly 20 years working in central and eastern Europe for Citi and RBS before moving to Ulaan Bataar in 2015. Randolph Koppa,TDB He says: “The difference between Mongolia and other emerging markets I’ve worked in is there are no global lenders here, no HSBC or Citi. They are mini universities that make every market in which they operate better. You don’t have that here.” Adds Tumurkhuu Davaakhuu, chief support officer at Arig Bank, the country’s second-oldest lender: “I’d love to see a global bank here with retail operations. It would force everyone to do better.” Leaving aside the issue of how welcome they are, a bigger question is how many foreign lenders actually want to put their capital to work. Viewed from any angle, Mongolia is a risky bet for global players. Economically speaking it’s tiny, generating less annual output than Brunei or Burkina Faso. It ranked 62nd in the World Bank’s Doing Business rankings, a middling performance at best. But Mongolia is hazardous in other ways. In October 2016, the Financial Action Task Force on money laundering (FATF) gave the country 18 months to clamp down on organised crime, drug smuggling and money laundering. A report published in September 2017 by the 41-nation Asia Pacific Group on Money Laundering warned of growing trade with the Democratic People’s Republic of Korea (DPRK). Around 1,500 North Koreans live and work in Mongolia, the report said, adding: “A number of known legal entities operate in Mongolia with direct links to the DPRK, and Mongolian companies own shares in DPRK state-owned enterprises.” The lingering fear in Mongolia is that it will be added to the FATF’s ‘grey list’ of countries regarded as lacking the will or ability to combat money laundering. “When the FATF guys came through Mongolia in 2016, they told us to get our act together,” one local banker says. “China’s banks would care a bit if we are added to the grey list. US banks would care a lot.” Khan Bank’s Bell believes being included on that list of errant states would be a disaster for Mongolia – not least because it would be harder for lenders to form correspondent relationships with US-based banks. “We are a risky market,” he says. “We cannot afford not to be squeaky clean.” In December 2017, the European Union published its first-ever blacklist of tax havens that included Mongolia, as well as the likes of South Korea and Guam. President Battulga Khaltmaa, in office since July 2017, is keen to make Mongolia more receptive to foreign capital. In the first half of 2018, the government is set to amend and expand the legal code, making corruption and money laundering criminal offences, including for politicians. So a year that started out badly for Mongolia, and threatened to get progressively worse, actually turned out surprisingly well. Foreign exchange reserves rose throughout 2017, hitting $1.63 billion in December. Growth is back, as is foreign investment, while a trade surplus helped narrow the current account deficit. In October, global investors seemed to reward the sovereign by placing $5.5 billion worth of orders on an $800 million bond priced at 5.625%. That constituted a big confidence boost for a sovereign that the agencies rate as speculative grade or junk at Caa1/B-/B-. Then there’s the IMF bailout, which appears to presage a new chapter in the short and often turbulent modern history of this frontier state. If every facet of the bailout is met or exceeded, the country will in five or 10 years’ time have a thriving banking sector, dominated by well-run lenders and overseen by an active and fiscally responsible central bank. Much of course remains to be done, but the events of the last year offer hope. After years of missed opportunities and wrong turns, Mongolia is finally headed in the right direction....
Councilors of the Japan Sumo Association have demoted stablemaster Takanohana from the post of director over his handling of an assault scandal.
In October, Yokozuna Grand Champion Harumafuji hit and injured a fellow Mongolian wrestler, Takanoiwa, during a night out drinking. Harumafuji retired from sumo the following month.
The board of directors of the association last week unanimously decided to recommend that Takanoiwa's stablemaster, Takanohana, be removed from his post as a director of the association.
The board cited Takanohana's repeated failure to cooperate with its internal investigation, despite reporting the assault to police.
An extraordinary meeting of the association's key decision-making body on Thursday unanimously agreed to remove Takanohana as director and demote him.
The chair of the council, former senior vice education minister Yasuko Ikenobo, told reporters that Takanohana had failed to report on the assault to the association and refused to cooperate with its internal investigation.
She said Takanohana's actions are unacceptable as a director of a public-interest corporation and that he neglected his duties.
It was the first time that a director of the association has been removed.
Ikenobo said Takanohana reportedly expressed his acceptance of the dismissal.
Former sumo grand champion Harumafuji has been fined 500,000 yen ($4,400; £3,280) after being found guilty of assault.
The 33-year-old from Mongolia had admitted hitting a junior wrestler over the head with a karaoke machine remote control during a night out in Tottori in October.
He has already apologised and stepped down over the incident.
The case rocked the world of sumo, a hugely popular ceremonial sport.
The assault on fellow Mongolian Takanoiwa happened while they were out drinking with other wrestlers in a bar in the western city.
The grand champion is reported to have been angered that his countryman was checking his phone while being given advice, seeing it as showing a lack of respect.
The latter was admitted to hospital with concussion and a fractured skull.
Two others involved in the incident have faced disciplinary action, and Takanoiwa's stablemaster - as coaches are known - is expected to be demoted for allegedly delaying reporting the incident.
Harumafuji started his career in Japan at the age of 16 and was promoted to grand champion or yokozuna - sumo's highest rank - in 2012.
He released a statement in late December, Reuters reports, saying his life "is now set to be sharply different from what I thought it would be".
"I have a feeling of chagrin, to be honest. But the responsibility is all mine."
Sumo has been hit by a string of scandals in recent years.
Last year, a wrestler and his coach had to pay nearly $300,000 to a fellow fighter they allegedly abused so badly he lost sight in one eye, according to reports.
Several wrestlers have also been implicated in match fixing scandals and links between sumo and the mafia-like yakuza crime syndicates.
Another Mongolian grand champion retired from the sport in 2010 after reports of his involvement in a drunken brawl.
In 2007 a sumo stablemaster received six years in prison after a novice was beaten to death by older wrestlers.
NEW YORK/SAN FRANCISCO (Reuters) - Music streaming service Spotify has filed confidentially with U.S. regulators for an initial public offering and is targeting a direct listing in the first half of 2018 that would allow some longtime investors to cash out, a source familiar with the matter said on Wednesday.
If Spotify, which was valued at as much as $19 billion last year, goes ahead with its plans, it would be the first major company to carry out a direct listing, an unconventional way to pursue an IPO without raising new capital.
A direct listing mainly eliminates the need for a Wall Street bank or broker to underwrite an IPO along with many associated fees and could change the way companies approach selling shares to the public.
The confidential filing was initially reported by news outlet Axios.
The U.S. Securities and Exchange Commission now allows all companies, regardless of revenue, to file a draft IPO registration statement confidentially before they unveil their financials.
Spotify is the biggest global music streaming company and counts Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) as its main rivals. Reuters had previously reported Spotify was aiming to file for an IPO in late 2017 and list with the New York Stock Exchange early this year.
Spotify declined to comment.
Spotify was sued by Wixen Music Publishing Inc last week for allegedly using thousands of songs without a license and compensation to the music publisher. Wixen is seeking damages worth at least $1.6 billion.
Spotify intends to proceed with a U.S. direct listing in the first half of 2018 despite the lawsuit, according to a source familiar with the matter. Goldman Sachs, Morgan Stanley and Allen & Co are helping arrange the listing, the source added.
The lawsuit is unlikely to have a major impact on Spotify’s IPO, said Luke DeMarte, a copyright lawyer at Michael Best & Friedrich not involved. DeMarte said he expects Wixen to settle its case for far less than the damages it is seeking and that it is unlikely any of the publisher lawsuits go to trial.
“It is not in Wixen’s interests or its constituents’ interests to stop Spotify or really inflict harm on them because it is the main game in town for streaming,” DeMarte said.
The company said in June it had more than 140 million active users while listing more than 30 million songs. Spotify last reported more than 60 million paid users, twice that of Apple Music, its closest rival.
The world’s second-largest economy, China, is poised for breakthroughs in cyberspace, says the country’s Ministry of Industry and Information Technology (MIIT). Beijing wants to be in the forefront of the booming digital economy.
“China will endeavor to basically build itself into a strong cyber power by 2035 to join the world's top rank in cyberspace," said the minister Miao Wei.
Among its new projects, China is planning to build a 13.8 billion yuan ($2.1 billion) artificial intelligence (AI) development park in the Mentougou district of Beijing, the state-run Xinhua news agency reported on Wednesday. Spanning a total of 54.87 hectares, the park will be home to around 400 businesses focused on high-speed data, cloud computing, biometrics and so-called deep learning – an advanced learning technique of AI.
Beijing also plans to advance the development of information technology and spread internet applications in the coming years. It will start a series of strategic projects and accelerate upgrading the internet. The average speed of 4G technology in China has increased 30 percent in 2017.
The minister said that deeper integration between the internet, big data, AI and manufacturing should be encouraged. He has promised to strengthen regulations to better protect private information and online data.
The spread of high-tech, such as big data and AI, is reviving traditional industries, said Miao Wei.
Statistics from the World Internet Developing Report show there were almost four billion internet users around the world as of June 2017, China accounted for over 750 million users.
Mongolia joins “Inclusive Framework on BEPS” to counter multinational firm tax avoidance www.mnetax.com
Mongolia has joined the “Inclusive Framework on BEPS,” bringing the number of participating countries to 111, the OECD announced today.
Mongolia’s decision to join follows that of the Bahamas and Zambia, which both joined in late December.
The Inclusive Framework on BEPS is a group of countries that are working together to prevent multinational group tax avoidance and to ease the resolution of cross-border tax disputes
By joining the group, Mongolia has pledged to adopt minimum international taxation standards developed in 2015 by OECD and G20 nations, with input by other nations, in response to the base erosion profit shifting (BEPS) plan.
The commitment means that Mongolia will adopt provisions to prevent tax treaty shopping, implement country-by-country reporting on multinationals and exchange country-by-country reports with other country tax administrations, will limit the benefits of any intellectual property or other tax regimes deemed to be preferential tax regimes, and will fully implement the mutual agreement procedure in its tax treaties with other countries to aid resolution of tax disputes. Mongolia must also pay a fee to participate.
In return, Mongolia will be permitted to work alongside other BEPS inclusive framework countries to ensure widespread adoption of the BEPS minimum standards and participate in a peer review processes.
Mongolia may also participate in the framework’s international tax standard setting work.
Mongolia is constructing a new international airport located to the south of the capital Ulaanbaatar. The new airport will provide better safety and reliability, good links to the city and will contribute to the economic development of Mongolia. The new international airport is under construction in the Khusig Valley, 52 km south of Ulaanbaatar in the Sergelen sum (district) of Tuv province.
According to J.Bat-Erdene, Minister of Road and Transport Development, the new Ulaanbaatar International Airport is expected to open in 2019. Currently, construction of the airport buildings is 98 percent complete. Work on the highway is 54.2 percent ready and is expected to be finished by October this year. Construction work on the 32 km-long fast highway connecting the airport with UIaanbaatar began last spring with a USD 140 million soft loan provided by the Export-Import Bank of China.
In 2008, the Government of Mongolia received a USD 500 million soft loan from the Japanese Government to finance the construction of the new airport. As the moratorium period ends this year, Mongolia will repay MNT 20 billion in 2018.
In 2017, a record 1.2 million passengers passed through the old Chinggis Khaan International Airport; the new airport. however, will have an annual capacity of 3 million passengers.
Mongolian Copper Corporation announces official reinstatement of 49 percent stake in Erdenet www.theubpost.mn
Mongolian Copper Corporation (MCC) announced that its 49 percent stake in Erdenet Mining Corporation (EMC) has been officially reinstated by the Government Agency of Intellectual Property and State Registration and issued a renewed certificate of legal entity on December 28.
On December 7 2017, the Supreme Court of Mongolia held the final hearing on the case relating to shareholder’s dispute of EMC and ruled in favor of MMC.
MMC said that the official reinstatement is an important development and commended the current Cabinet for delivering a guidance to the Agency for Policy Coordination and State Property and the Government Agency of Intellectual Property and State Registration, defendants in the case, instructing them to reinstate interest and share ownership of MCC according to the Constitution and other legislations of Mongolia.
“The current government’s action shows critical aspect of rule of law’s system by rescinding the previous government’s decision, which was determined to be illegal by the Supreme Court,” MMC stated.
The final decision on the case, which has lasted over a year, in respect to the shares of and the future of EMC as a public-private partnership company not only demonstrates the rule of law in local businesses but also an important step for Mongolia to maintain its investment friendly status for foreign investors, according to MMC.
“This dispute was not only the case of MCC but also showed that hundreds of foreign and local investors, and thousands of local companies can protect their legal and commercial interests pursuant to the rule of law and by independent judiciary in Mongolia,” it added.
MCC stated that it expects that the majority shareholder, the government, to honor and follow the Company Law of Mongolia by respecting the minority shareholder’s interest and cooperating with MCC to increase efficiency, revenue to the state budget and work together in creating a better work environment for the thousands of employees of EMC.
Erdenet Mining Corporation’s (EMC) net profit increased by 273 billion MNT compared to 2016, following the change in minority ownership. According to EMC officials, change in ownership and management has allowed engineers to be more flexible and undertake reform in the company’s operation.
In 2016, EMC recorded a net profit of 27 billion MNT, while 2017 saw EMC record 273 billion MNT in net profit so far.
EMC was previously a Mongolian-Soviet joint venture, established in 1974, and later transformed into a Mongolian-Russian venture. In 2016, it was announced that the Russian state-owned Rostec would be selling off its 49 percent stake in Erdenet for 390 million USD to MCC, a phantom corporation for one of the largest private banks in Mongolia, the Trade and Development Bank.
In February 2017, Parliament had decided to nationalize the 49 percent stake in EMC due to questions regarding the legitimacy of the purchase. With the overturning of the decision by the Supreme Court, MMC has been officially reinstated as a minority shareholder and will be allowed to appoint members on the board of EMC....