Erdenebileg Erdenejamiyan, Vice Minister of Justice, discusses recent reforms in Mongolia’s legal system, including a new foreign-investment law.
European Times: What are the main tasks of the Ministry of Justice?
Erdenebileg Erdenejamiyan: Our main role is to upgrade Mongolia’s legislation, review and amend new laws presented by ministries, and review draft laws presented by Parliament. We review all draft laws before they are ratified. As Vice Minister, I support the Minister and am responsible for certain projects, including drafting new laws, organising the construction of the new court and some archives’ buildings, and contributing to a number of development projects. Current projects of the ministry include Mongolia’s criminal reform and drafting of other new laws. Along with changes in the legal system we are also changing our court system and related infrastructure. We have recently reorganised our court system so that courts will cover larger areas. We have already reformed Mongolia’s Association of Attorneys, which corresponds to the US Bar Association. This ministry’s overall goal is to ensure justice.
European Times: As an attorney yourself, how would you describe Mongolia’s legal system today?
Erdenebileg Erdenejamiyan: I think that our country has a very good record in criminal law, but we lack enough attorneys specialising in civil and business issues, including in the prosecutor’s office. We need more high-quality attorneys to serve the corporate sector. In other words, we need more than just good laws to attract investors to Mongolia.
European Times: Do you involve the private sector in your ministry’s ratification of new laws?
Erdenebileg Erdenejamiyan: We always survey leaders and companies in a particular sector before we finalise legislation that applies to that sector. We listen to knowledgeable people in the private sector in order to make sure our new laws are business-friendly.
European Times: What legal protection does Mongolia offer foreign investors?
Erdenebileg Erdenejamiyan: We are currently drafting a new law on foreign investment and a new investment-fund law, and the ministry is working on making these new laws ones which will attract foreign investors. We are also establishing a one-stop shop service for foreign investors as well as a new agency dealing with foreign investments.
European Times: How will the new law protect investors from corruption in the local legal system or business sector?
Erdenebileg Erdenejamiyan: What is most important is for our foreign-investment laws to be transparent, stable and corruption-free. We have raised salaries of judges and introduced new regulations designed to make sure that our court system is not plagued by corruption. All our new regulations will help enhance Mongolia’s attraction for foreign investors. There is a common misconception among our Parliament members that we only need one law to attract foreign investors but I believe other laws are necessary as well, and we hope that all our new laws will result in a better business environment.
European Times: What are the main challenges for investors in Mongolia?
Erdenebileg Erdenejamiyan: One challenge is a certain opposition to foreign companies taking over work that could be handled by Mongolian companies, for example in the Oyu Tolgoi project. Also, foreign companies and foreign workers are paid much more than Mongolian companies for doing the same job, and Mongolian managers do not climb the corporate ladder as quickly as foreign managers do. The government is working to deal with these problems and also to make sure that Mongolia attracts the right kind of foreign investors. We have already reduced costs of licenses as an impetus to investment.
European Times: What is your personal message to potential investors in Mongolia?
Erdenebileg Erdenejamiyan: The Mongolian government now understands that it cannot change its laws every day and also it is clearer about it’s priorities. The new law on foreign investment creates added protection and incentives for investors, whether they are foreign or local. The main points of the new investment law are that foreign and local investors will be treated equally, special permits will be issued by the new investment agency, the new law applies to investment in any economic sector, a new investment fund valued at €74.2 million will be created, only state-owned companies that wish to obtain a majority amount of shares in the company must apply for the government approval, and the Mongolian government will sign a special stability agreement with any investor who invests US$10 million or more and if the activity lasts a certain period. This is a very good time to invest in Mongolia.
