EDITORIAL BOARD

J.Amarsanaa Academician, Merited Lawyer of Mongolia

Ts.Sarantuya (Sc.D), Merited Lawyer of Mongolia

B.Bayarsaikhan (Ph.D)

D.Gangabaatar (LL.D)

D.Zumberellkham (Ph.D)

J.Oyuntungalag (LL.D)

D.Sunjid (Dr.jur)

Z.Sukhbaatar (Ph.D)

Ts.Tsogt (LL.D)

Kh.Erdem-Undrakh (Dr.jur)

Executive Editor–in-Chief
Director, The National Legal Institute
S.Enkhtsetseg

Acting Assistant Editor

Researcher, The National Legal Institute
M.Ochirbat

Designed by
Designer, The National Legal Institute
D.Munkhjargal

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ISSN: 2226-9185
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publishes this law review five times
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E-mail: lawjournal@legalinstitute.mn
 CONTENT

BEFORE CREATING A LAW /UNDERLINE ARTICLE AND INTERVIEW/

Development of Administrative Litigation in Mongolia:

From Administrative Control to Court Remedy? 5
Tsogt.Ts, LL.D., Judge of the Administrative Appellate Court

Understanding the Purpose of Disclosure within

Securities Regulation: A Pathway to Reform in Mongolia. 20
Brandan M. Goodwin Juris Doctor Candidate 19’, Regent University School of Law
B.A. Political Theory and Constitutional Democracy 16’ Michigan State University

A Legal Analysis on Article XXIV of the GATT from the Perspective of

Non-Application of the WTO Safeguard Measures to Members of
Regional Trade Agreements 31
Tuulaikhuu.E, LL.M., Lecturer in International Law, School of Law,
National University of Mongolia

LEGAL THINKING: VIEWS AND REFLECTIONS

Public Sector and Governance Reform: Assessing the Debates

Addressing the Performance Management System 37
Enkhtsetseg.S, Director. The National Legal Institute

Trust Law Concepts in Mongolia 44

Oyuntungalag.J, Ph.D., Chief Judge, the Capital City Court of Civil Appeals

Special Features of the Legal Act of Mongolia during

a Period of Manchu Chin 63
Jargalsaikhan B. Lecturer of “Ikh Zasag” International University, Mongolia

Realization of Public Interest by Law 68

Amarbat.B, Assistant lawyer, “ELC” LLP Advocates

IMPLEMENTATION OF EFFICIENCY AND LAW

Challenges and Issues Concerning Pre-Trial Settlement of

Dispute in Administrative Proceedings 78
Erdenetsogt.A, Professor of Public Law Department of the School of Law of
National University of Mongolia

Judge’s Ruling during Administrative Proceedings and the Right to

make an Appeal 85
Munkhdavaa.E, LL.M., Lecturer of Public Law Department,
School of Law, National University of Mongolia
 Актуальные Проблемы Борьбы с Преступностью в Сфере
Информационных Технологий в Монголии 90
Д.Сумъяацэрэн – Научный сотрудник Центра исследования полиции
Института научного исследования и развития Университета
правоохранительной службы Монголии, капитан полиции.
Л.Цогтбаяр – Преподаватель Кафедры расследования Института
полиции Университета правоохранительной службы Монголии.

Protecting Witnesses, Victims and other Cooperating Persons 95

Galbaatar.L, Lawyer and Legal Researcher

LEGAL RESEARCHES, SUMMARY, RESULTS

Die historische Entwicklung des Sanktionensystems in der Mongolei

(The Historical Development of the Criminal Sanctions
System of Mongolia) 101
Dr.jur. Kh.Erdem-Undrakh

Prospect of Adopting Local Content Requirements to Develop Upstream

Linkages to the Mongolian Mining Industry 114
Askhar.B, LL.M., Policy and Legal Analyst

Improving the Regulatory Framework for Foreign Investment in

Mining in Mongolia through an Application of Australian
Foreign Investment Policies 129
Undrakhgerel.O, LL.M., Lawyer, “ERDENES TAVAN TOLGOI” JSC

INTERNATIONAL EXPERIENCE

Challenges of Implementing of the CISG in Some Asian States 142

Tumendelger.D, A senior lecturer, The Executive Leadership Academy of
Law Enforcement, Law Enforcement University of Mongolia, Police captain

К вопросу о свойствах доказательств в уголовном

судопроизводстве России 151
Брянская Елена Васильевна – кандидат юридических наук, доцент,
доцент кафедры судебного права Юридического института
Иркутского государственного университета

A Brief Overview of Judicial System of the United States and the

Supreme Court of Indiana 157
Suvd.T, LL.M., Paralegal at GTs Advocates LLP

A RESEARCH CARRIED OUT BY THE NATIONAL LEGAL INSTITUTE IN 2017

Summary of Assessment Report on the Consequences of

Implementation of Law on National Human Rights Commission 165

4

DEVELOPMENT OF ADMINISTRATIVE LITIGATION IN
MONGOLIA: FROM ADMINISTRATIVE
CONTROL TO COURT REMEDY?1
Tsogt.Ts, LL.D., Judge of the
Administrative Appellate Court1
1.4. Socialist Period (1960 until
1990)
1.4.1. Further Advancement of the
General Supervision of the Procuracy
The Third Constitution was adopted
by the first session of 4th People’s Ikh
Khural (the parliament at that time) of MPR
on July 6, 1960. It continued the effort to
develop a socialist state and legal system.
“Although the constitutions of 1940 and
1960 were different regarding the struc-
ture, writing style and content in some
provisions, both of them had the same
character of socialist laws in the sense of
their purpose and principles of state and
socialist structure.”2 For instance, the con-
stitutional purpose was a renewed com-
mitment to completing the construction
of socialism and building a communist
society. The state structure laid down in
the 1960 Constitution followed that of the
1940 Constitution which was amended in
1959.
1
The subsection 1.4-1.7 of chapter one of the Doctoral Dis-
sertation.
2
Jugnee, Constitutionalism and Constitutional Review in
Mongolia, 12.
5
Before Creating a Law
Though “The fundamental rights
of citizens were treated in a separate
chapter and considerably expanded and
reworked,”3 in reality there was no sig-
nificant development in terms of actual
enforcement4 against administrative in-
fringement. Within state administration in
Mongolia, the state organs, including the
administrative bodies, were operated by
vertical control principles and all state or-
gans were under the control of the party
and the State Ikh Khural. Moreover, the
activity of constitutional and public admin-
istrative bodies were out of the scope of
judicial control.5 However, the absence
of judicial control did not mean that there
was no control at all. The Procuracy’s
supervisory role advanced in the area of
administrative activity consistent with the
usual pattern of socialist countries.
Article 72 of the 1960 Constitution
stated that the Procuracy exercised su-
preme supervision over the activity of
implementing law in the same manner in
all ministries, central administrative or-
3
Butler, The Mongolian Legal System, 176.
4
Doctor Gangabaatar reasoned that it is not possible to
analyze the legal mechanisms, constituting human rights
protection within the administrative law context, at that time
directly from the human rights provisions of the MPR social-
ist constitutions. This, doctor Gangabaatar asserted, was
because it was common that provisions in constitutions of-
ten did not correlate with practice in socialist block countries.
Gangabaatar Dashbalbar, Үндсэн хуулийн эрх зүй Төрийн
байгуулал, зарчим, үзэл баримтлал [Constitutional Law: State
Structure, Principles and Policies] (Ulaanbaatar, 2016), 40.
5
Because in Soviet idea of administrative justice “fell into
disfavor during the Stalin period, largely for two inter-related
reasons: 1) first, it was deemed to be a “bourgeois” legal
concept and, therefore, like most ideas suggesting influence
from the West, it had to be rejected; 2) second, some Sovi-
et writers associated administrative justice with a separate
system of administrative tribunals such as those operating in
several West European countries; since a system of sepa-
rate administrative courts did not have much support among
Soviet lawyers, this was another reason for rejecting admin-
istrative justice.” Barry, “Administrative Justice: The Role of
Soviet Courts in Controlling Administrative Acts,” 65.
LAW REVIEW
gans and their subordinate organs, local
administration or social, and cooperative
organs, officials, and citizens. Therefore,
the supervision that the Procuracy was
authorized to exercise was considered an
independent and distinctive type of super-
vision of the state. The procurator’s super-
vision was characterized as supervision
that was beyond influence of local units.
When conducting a supervision over ad-
ministrative organs, it was not meant to
exercise administrative authority to dis-
pose of matter but to make sure the law
was executed in the same strict way for
every organ. When the administrative de-
cision was contradicted to the law or right
way of executing the law, the Procuracy
was to exercise a protest or to transfer the
matter to a legal organization which had
jurisdiction to deal with it.
The Procurator’s supervision con-
sisted of four types6 based on the organs
under its control: a) “general supervision”
over the activity of abiding and precisely
executing the law by state, social, and
cooperative organs, its officials and citi-
zens, b) control over criminal investigative
organs, c) supervision over the legality
of judicial decisions,7 and d) supervision
over the activities of the prisons in terms
of following the law. “General supervision”
is distinct from the specific supervisions
because it covers the activity of every
state, social, and cooperative organs, and
citizens in general. Furthermore, general
supervision is divided into two categories:
supervision over legal acts of state, social,
and cooperative organs, and its officials;
and the supervision of citizens’ activity.
When exercising general supervi-
sion over the state, social, and cooper-
ative organs, the Procurator had sub-
stantial authority. The Procurator had the
power to check the legality of an act by:
examining whether it was consistent with
relevant provisions of law; whether such
6
Biraa, БНМАУ-ын захиргааны эрх, 394.
7
Supervision over investigative and judicial decision also
directed to find and correct the illegality of administrative
activity that is involved in investigative and judicial process.
6
2017 5(65)
act was in scope of authority given to the
state organs, and whether the act is con-
sistent with citizens’ rights and legal inter-
est. In terms of correcting the illegality of
administrative acts, the Procurator issued
a protest, which was required to prescribe
the exact provisions of the law that the act
contradicted, to the organ itself or a higher
level organ. The Procurator’s declaration
was also given to prevent a breach of law
or point out the cause of a breach with re-
gards to activities of state administrative
organs. Additionally, the Procurator had
the power to inspect activities of state,
social, and cooperative organs based on
information concerning a breach of law or
it also had the authority to initiate an in-
spection as a precautionary measure. The
Procurator’s inspection includes the han-
dling of the laborers’ (or workers was the
general name for and description of citi-
zens at that time) petition and complaint.
In doing so, the Procurator accepted the
petition and complaint from the citizens
concerning an alleged breach of law and
order.
Procuracy as Complaint Handler
Section 7 of the 1960 Constitution
provided for the basic rights of Mongolian
citizens and the guarantee of such rights.
Article 85 of Section 7 provides that, “ev-
ery citizen of the Mongolian People’s Re-
public shall have the right to freely apply to
any of the organs of the state power and
any administrative organs, and to submit
written or verbal petitions and complaints8
concerning illegal acts on the part of the
state organs or public officials, and con-
cerning acts of bureaucratic treatment or
red tape.”9 Since there was no possible
way of processing citizens’ complaints
against state agencies in the Mongolian
courts initially, and because the Procura-
cy’s duty was closely associated with the
supervision of activities of state agencies
from the standpoint of their conformity to
8
Phrase of “petition and complaint” sometimes referred as
“application and appeals”.
9
Jugnee and Ookhnoi, The Constitutions of Mongolia 1924-
1940-1960-1992, 263.

the law, the Procuracy10 was an ideal insti-
tution to handle complaints against state
agencies.
Additionally, the Procuracy used
citizens’ complaints as tool for initiating
control. However, based on the function
of supervision, it is evident that its main
purpose was to maintain the orderly im-
plementation and due adaptation of law.
The protection of rights and legal interest
was never the primary goal of the Procu-
rator in Mongolia. This was identical to the
Procurator’s role in the Soviet Union.
In the Soviet Union, it became diffi-
cult for the Procurators to exercise super-
vision over all of the soviet agencies, and
assert their administrative authority in or-
der to check legality.11 The citizens’ com-
plaint was used as a signal12 of illegality in
the socialist administration and in a report
of a violation of the law. Therefore, the pri-
mary purpose was not to protect individu-
als’ rights and interest from wrongful ac-
tions by administration. In contrast, it was
used to shield13 the state interest, or so-
cialist legality. Professor Gellhorn points
out that “when a citizen complains to a
procurator and the procurator decides to
pursue the complaint, the case becomes
the procurators; the complainant has no
further voice in the matter.”14
10
Jamsran, Монгол Улсын захиргааны эрх зүйн
удиртгал, 175.
11
Walter Gellhorn, “Review of Administrative Acts in the So-
viet Union,” Columbia Law Review 66, no. 6 (June 1966):
1059.
12
For instance, following passage of the article shows that
how should directly locate illegality for supervision instead
of generally searching for illegality. “Sometimes the situation
occurs of Procuracy agencies making fruitless examinations
about violations without having information with specific
sources which continue for a long time at enterprises and
official institutions and which require labor and wasting a
great deal of time.” Sovd Galsan, V. Riabtsev, and S.Tser-
endorj, “Perfecting the Organization and Legal Basis of
Procuracy Agencies is a Vital Force Strengthening Legality,”
in The Mongolian Legal System: Contemporary Legislation
and Documentation, ed. William Elliott Butler (BRILL, 1982),
136.
13
Often an individual complaint becomes merged in a
broader investigation, the procurator not being bound by the
specific claims the complainant has put forward. Gellhorn,
Ombudsmen and Others, 360.
14
Gellhorn, “Review of Administrative Acts in the Soviet
Union,” 1078.
7
Before Creating a Law
Later, in 1967 in Mongolia, the re-
vised Civil Investigation Procedure Law of
the MPR was enacted in accordance with
the 1960 Constitution. Even by this law
certain types of administrative complaints
were accepted and allowed to proceed
through usual court procedure. Howev-
er, the Procuracy’s involvement15 was still
strong. Consequently, Edict16 116 of the
Presidium of the Great People’s Khural
of May 29, 1973 also imposed a duty on
the Procuracy to supervise the execution
of law with regards to the disposition of
the citizens’ petitions and complaints. The
Rules for Presenting Proposals, Applica-
tions, and Appeals served as another rule
for promoting the supervision inside the
administration until 1995, when a law17 re-
garding the new constitution was enacted
on the subject of complaint procedure.
The above mentioned Rules cate-
gorized requests for review of acts of the
administration into three categories. Re-
quests, which came from citizens, were
15
“The Procuracy may participate in a civil proceedings and
has the right to initiate a case or enter a case at any stage if
the protection of state and social interests or the rights and
interests of citizens protected by law so require. In an Or-
der of 10 October 1966 the MPR State Procurator instruct-
ed procurators to participate in all cases of serious harm
caused to the interests of state and social organizations
or citizens, reinstatement in work, eviction of citizens from
housing premises, release of impounded property, labor
cases, trusteeship and guardianship cases being consid-
ered for a second time, and cases initiated by a procurator,
in addition to certain instances when the Code of Civil Pro-
cedure requires Procuracy participation.” Butler, The Mon-
golian Legal System, 636–37.
16
“In 1973, in addition to the VII session, seventh convo-
cation of the MPR Great People’s Khural discussing “On
Receiving and Deciding Workers’ Requests” and adopting
a decree, Edict 116 of the Presidium of the MPR Great Peo-
ple’s Khural, “On the Procedure for Receiving and Deciding
Citizens’ Proposals, Applications, and Appeals” was adopt-
ed on 29 May 1973; and Decree 250 of the MPR Coun-
cil of Ministers of 6 July 1973, “On the Procedure for Re-
ceiving and Deciding Citizens’ Proposals, Applications and
Appeals,” confirmed provisions for implementing the above
Edict. Similarly, a decree, “On the Tasks of Further Raising
the Legal Nurturing of the Working People,” was adopted
by the MPR Great People’s Khural on 11 June 1974 (see
Chapter 3-Ed.).”
Danzandorj Damba, “On Rules for Deciding Citizens’ Pro-
posals, Applications, and Appeals,” in The Mongolian Legal
System: Contemporary Legislation and Documentation, ed.
William Elliott Butler (BRILL, 1982), 153.
17
It was noted in the case file of the law that when this law
is discussed in the parliament the Edict 116 was still in force.
LAW REVIEW
divided into three18 forms: proposals,19
applications,20 and appeals. Appeals or
complaints were directed toward eliminat-
ing any deficiencies that harmed the rights
or interests of citizens and which violated
socialist legality. Notably, Article 85 of the
Constitution21 required state organs and
its officials who received a complaint to
examine the legality of the activity of the
state administrative organs. And based
on its findings of the legality of the acts in
question it was obliged to provide a reply
to the citizen who submitted the petition.
The examination and reply of citizens’
complaints focused on the legality of ad-
ministrative activity out of question on
rights and interests of the complainant.
In summary, it is evident that until
1967, and for a time after, the Procura-
cy was the primary instrument utilized in
Mongolia for both the settlement of admin-
istrative matters and disputes and for re-
solving complaints made against adminis-
trative agencies. General Supervision by
the Procuracy was the main focus during
this time. The significance of such general
supervision was the fact that it centered
on objective legality of administrative ac-
tivity instead of the rights and interests of
citizens. Therefore, its ability to provide an
18
Damba, “On Rules for Deciding Citizens’ Proposals, Ap-
plications, and Appeals,” 154.
19
Proposals are questions put forward by a citizen on de-
veloping the national economy and culture, uninterrupted-
ly raising the material living standard and cultural level of
the working people, strengthening and disseminating work
achievements, and eliminating any deficiencies. A proposal
is one form of workers participating in the cause of guiding
the state and is an instrument which intensifies the super-
vision established over activities of the apparat. Proposals
which come from workers are evidence that their political
activity is constantly increasing. Ibid.
20
Applications are requests put forward by citizens on such
questions as socio-cultural, housing, and communal ser-
vices in accordance with their rights provided by the MPR
Constitution and other legislation. Another form of appli-
cation, although not connected with the applicant himself,
has the quality of information presented about activities of
enterprises, economic organizations, and institutions which
violate the interests of society or citizens. Ibid.
21
Article 85, second Paragraph of the 1960 Constitution
states as “The state organs and public officials shall without
any hindrance examine all complaints and petitions submit-
ted, and undertake the measure to check a breach of law
and order, and to provide a response to such petitions or
complaints.” Ibid.
8
2017 5(65)
adequate remedy for individual complain-
ants against state administration was very
limited. While citizens’ rights and interests
were acknowledged, the nature of general
supervision was not designed to pursue
the rights and interests of a private person
who was negatively affected by the ad-
ministration. Accordingly, the procedure
mainly focused on objective (socialist) le-
gality in administration, and since the chief
purpose of the procedure was significantly
different than that of seeking a remedy for
the alleged infringement of citizens’ rights.
1.4.2. Administrative Cases
Enumerated in The Civil Investigative
Law as complaint procedure
Theory: Establishment of admin-
istrative law as branch law
The leading socialist law scholar,
Professor Avirmed,22 described the legal
developments of the period of 1940-1960
as a rise and formation of socialist law. At
the higher education level in Mongolia, a
law division within the faculty of a Social
Science department has only been in ex-
istence since 1960, initially including 37
students and two full time instructors.23
At that time subjects taught in law class-
es were mostly civil, criminal, and labor
law. The classes were taught by instruc-
tors, some24 of whom studied in the Soviet
Union. From the 1970s a larger number
of Mongolian jurists, who trained and ob-
tained higher legal education in Mongolia,
emerged in practice. However, Mongo-
lians who graduated from various Soviet
law institutions were appointed as instruc-
tors initially for law teaching, along with
22
“Revolutionary democratic law served, developed, and
became firm during our revolutionary democratic period,
1921-1940. This was a precondition and preparatory stage
for the rise and development of socialist law in our country.
By 1940, revolutionary democratic law, just as the devel-
opment of our state, gradually became socialist law. Thus
1940-1960 was a period of the rise, development, and ser-
vice of socialist law in our country.” Erentsen and Biraa, “The
Nature of Socialist Law,” 37.
23
Tegshjargal, МУИС-ын Хууль зүйн сургууль: Түүхэн
хөгжил ба Шинэ зуун, 9.
24
D.Luvsansharav was one of the first two law instructor,
then E.Avirmed, G.Sovd who graduated in Soviet Union
started teaching.

their counterparts from the Soviet Union.
Chimid, who was a recent graduate
of a law division of a National University of
Mongolia at that time, was appointed25 as
an administrative law instructor in 1966.
Professor Chimid26 later became the lead-
ing authority on Mongolian administrative
law27 and published28 a seminal textbook
entitled, “The MPR Administrative Law,”29
in 1973. In the foreword of the textbook,
it is acknowledged that Soviet scholars’
books had been widely used in the writing
of the book. Professor Chimid especially
noted the works of scholars who published
during the period of 1960-1970, includ-
ing Yu. M. Kozlov, A. E Lunev, and G. I.
Petrov.30 Accordingly, administrative law in
Mongolia was in line with the Soviet con-
ception of law and state. Administrative
25
Tegshjargal, МУИС-ын Хууль зүйн сургууль: Түүхэн
хөгжил ба Шинэ зуун, 10.
26
Professor Chimid obtained his first doctorate degree in
administrative law in 1975 at Academy of Science in Mongo-
lia. Tuvshintulga Algaa and Batbayar Bayanbaatar, Монгол
Улсын хууль зүйн шинжлэх ухааны ном зүйн бүртгэл.
Гарын авлага /1911-2012/ [Book-List of Legal Scientific
Literatures in Mongolia (1911-2012)] (Ulaanbaatar, 2014),
21. Ganzorig Dondov, “Монгол Улсын захиргааны эрх
зүйд тулгарч буй асуудал: Түүхэн хөгжил ба Цаашдын
хандлага” [Challenges Faced with Administrative Law of
Mongolia: Historical Development and Further Trend], 2011,
132.
27
“It is not clear even now that from when to begin count-
ing as historical establishment of administrative law, thus
it needs to be answered by based on sufficient research.”
Dondov, “Монгол Улсын захиргааны эрх зүйд тулгарч буй
асуудал: Түүхэн хөгжил ба Цаашдын хандлага,” 129.
28
In 1964 first textbook (Norov P, ed., БНМАУ-ын төрийн
захиргааны эрх Ерөнхий анги [MPR State Administrative
Law, General Part] (Ulaanbaatar, 1964).) published on gen-
eral part of administrative law, and in 1971 textbook pub-
lished on special part of administrative law. Butler, “Russian,
Soviet, and Mongolian Law on Microfiche - 4th Cumulative
Catalogue,” 115.
After Professor Chimid’s textbook, there has been textbooks
written by Udval Vanchig, Удирдлагын эрх зүй [Regulatory
Law] (Ulaanbaatar, 1999)., Dolgorsuren Jamsran, Монгол
Улсын захиргааны эрх зүй [Administrative Law in Mon-
golia] (Ulaanbaatar, 2000)., Sukhbaatar Jamyankhorloo,
Монгол Улсын захиргааны эрх зүй [Administrative Law]
(Ulaanbaatar, 2002)., Dashtseden Dashdondog, Монгол
Улсын захиргааны эрх зүй I [Administrative Law in Mon-
golia I], 1 (Ulaanbaatar, 2002)., Dashtseden Dashdondog,
Монгол Улсын захиргааны эрх зүй II [Administrative
Law in Mongolia II], 2 (Ulaanbaatar, 2003). More in Don-
dov, “Монгол Улсын захиргааны эрх зүйд тулгарч буй
асуудал: Түүхэн хөгжил ба Цаашдын хандлага,” 130.
29
Biraa, БНМАУ-ын захиргааны эрх.
30
Some of the leading soviet administrative law scholars at
that time (Ю. М. Козлов, А. Е. Лунев, Г. И. Петров).
9
Before Creating a Law
law in socialist Mongolia was concerned
predominantly with the powers and duties
vested in state administrative agencies.
Professor Chimid’s textbook in Chap-
ter 11 elaborates on the topic of citizen as
subject in the administrative law relation-
ship. The chapter defines “objective right”
as the one that is prescribed by the state
to the citizens, and on the other hand, it
defines a “subjective right” as the one that
citizens themselves actually implement
as an objective right. In addition, Chimid’s
textbook discusses the way in which the
administrative law guarantees the protec-
tion of citizens’ rights during the process
of state administration. For conducting
supervision of administrative activity, the
textbook identifies several instruments, in-
cluding supervision by the Procuracy and
the court, in terms of conformity to the cit-
izen’s right. Furthermore, the importance
of maintaining legality31 in state adminis-
tration and the role of the Procuracy and
the court in systematically sustaining so-
cialist legality were discussed in the text-
book.
According to Professor Chimid’s
textbook, both the protection of citizens’
rights and socialist legality were part of
administrative activity and were ultimate-
ly in the hands of various institutions, up-
held through control and supervision. In
particular, an essential legal32 instrument
for maintaining socialist legality in state
administrative activity was control, which
was a stronger version of control than
that exercised by the special organization
designated for it under the party. Howev-
er, control and supervision were different
where supervision was exercised by the
Procuracy and administrative organ. Pro-
fessor Chimid noted that an organ which
is conducting supervision cannot put it-
self in one’s place and act on behalf of it,
instead it should observe how legality is
maintained and if any illegality is found
31
Biraa, БНМАУ-ын захиргааны эрх, chap. 18.
32
It discussed about maintaining socialist legality by the
party, state and communal supervision.
LAW REVIEW
then it should stop the illegal activity and
demand that the breach of law be recti-
fied.33
Subsequently, a petition and a com-
plaint of the citizen (along with communal
organizations) were designated as the
main source of initiating and exercising
the legality check (supervision). Note-
worthy here was the fact that the citizens’
ability to file petitions and complaints was
described as a merging of citizens’ per-
sonal interests with public interest. Be-
cause instituting a petition or complaint is
a way of both correcting illegality in state
activity and at the same time restoring
complainant’s rights and interests caused
by bureaucratic behavior, the purpose of
sustaining socialist legality is achieved. As
William Elliott Butler34 observed, a decade
later, Chimid’s book described administra-
tive law in Mongolia “as in other socialist
countries, is one of the broadest, poten-
tially most significant, yet least-developed
branches of law and legislation.”35
Administrative Disputes Enumer-
ated in the Civil Investigative Law
In addition to the general supervision
by the Procuracy, the court had a certain
role in terms of control over the activity of
the state administrative organs. Beginning
with the revision of the Civil Investigation
Procedure Law of MPR in 1967, specific
enumerated disputes were included in
the civil procedure law as part of the com-
plaint procedure, notwithstanding com-
plaints against notaries, which up to this
point had been the only dispute listed in
the enumerative clause since 1952. Insti-
tution of the enumerated complaint was
because in the Soviet Union, from the post
33
Biraa, БНМАУ-ын захиргааны эрх, 361.
34
William Elliott Butler is the John Edward Fowler Distin-
guished Professor of Law, Dickinson School of Law, Penn-
sylvania State University, who compiled and edited a thou-
sand page text on socialist Mongolian law in the early 1980s.
35
Butler, The Mongolian Legal System, 250.
10
2017 5(65)
Stalin period36 to the 1960s, little by little a
listing of some administrative complaints37
began to be included in the civil procedure
law. Additionally, individual laws permitted
complaint procedure in certain cases.
The Civil Investigation Procedure
Law of the MPR contained separate
chapters beginning with Article 197 that
dealt with complaint procedure. The chap-
ter titles included: (1) a complaint about
wrongful registration on the electoral list,
(2) a complaint on activity of administra-
tive organ and (3) a complaint on activity
of notary. According to Article 3 of the Civ-
il Investigation Procedure Law, a person
had the right to file a complaint in order
to protect a right violated or contested, or
any person could seek protection of an
interest provided by law. The following ar-
ticle (Article 4 paragraph 2 and 3) states
that notwithstanding the specific demand
of an interested party, civil procedure can
be commenced by a petition of an inter-
ested party (citizen, state administrative
agency, communal and social organiza-
tions) or a Procurator.
The purpose38 of this law is broad.
Not only does it apply to citizens’ political,
labor, housing, and other personal and
property rights, but it also seeks to protect
the socialist state, the socialist economy,
36
Barry, “Administrative Justice: The Role of Soviet Courts
in Controlling Administrative Acts,” 65; Robert J. Osborn,
“Citizen versus Administration in the USSR*,” Europe-Asia
Studies 17, no. 2 (1965): 230.
37
For instance, an article on the subject published in 1964
mentioned that “Certain complaints against administrative
acts can be brought to court. These instances are specifi-
cally provided for by law, and there is no general provision
for suing administrative bodies. While the range of possible
lawsuits is small, some of them are fairly important, includ-
ing suits to collect damages occasioned by wrongful official
acts, suits to have housing eviction orders declared invalid,
appeals from administrative fines, and court review of labour
dismissals.” Moreover, “Art. 4 of the All-Union Principles of
Civil Procedure (December 1961) left the scope of court re-
view of administrative errors just about where it was, while
not shutting the door on future legislation which might assign
further questions to the courts. Of the disputes already un-
der court jurisdiction, mentioned only two: review of admin-
istratively imposed fines, and review of incorrect exclusions
from voter registration lists.” Osborn, “Citizen versus Admin-
istration in the USSR∗,” 232.
БНМАУ-ын Иргэний байцаан шийтгэх тухай хууль [The
38
MPR Civil Investigation Procedure Law], art. 2 (1967).

and socialist ownership rights. Most im-
portantly, the purpose of the Civil Inves-
tigation Procedure Law was to strengthen
socialist legality and prevent violations of
law. Therefore, the focus of civil proce-
dure including the listing of complaints,
was to maintain socialist legality along-
side with the purpose of protecting com-
plainant’s rights. The law and the way in
which it was applied by the government
can be described as a control type pro-
cedure. Provisions that signal control type
procedure include Articles: 34 (parties to
the case); 45-46 (subjects participating in
or on behalf of others and the Procurator’s
participation in procedure); 152 (unlimit-
ed authority of court to the demand pre-
scribed by claim or complaint) and; 231
(special ruling39 point out illegality of ad-
ministrative activity and demand to fix the
problem and reply with the explanation) of
the 1967 law.
However, one of the three types of
complaints prescribed in article 197 para-
graph 2 of the Civil Investigation Proce-
dure Law was described generally as
a complaint regarding the activity of an
administrative organ, which was further
limited as closed-list in Article 200. The
Article 200 provision included the follow-
ing complaints against the activity40 of
administrative organs regarding the re-
covery from citizens of: (1) debts in state
and local taxes and charges, (2) debts in
compulsory insurance assessments, (3)
debts in voluntary collections, (4) fines
imposed through administrative coercive
measures, and (5) fines and damages in
connection with forestry violations, dam-
ages to haying areas, crops, and plantings
39
“Энгийн магадлал” is the term used in Mongolian. “Civil
courts may direct a ‘special ruling’ (chastnoye opredeleni-
ye) to any agency or official who, on the basis of evidence
presented in an ordinary case, has been found to engage
in administrative malpractices. While the agency or official
is required to notify the court of action taken, there are no
‘teeth’ in the procedure.” Osborn, “Citizen versus Adminis-
tration in the USSR*,” 230.
40
In this thesis, generally uses term “administrative act” but
in describing administrative decisions in special time, or par-
ticular law such as during soviet time term of “administrative
activity” is used.
11
Before Creating a Law
of state, cooperative, and social farms.
These types of complaints were similar
to the complaints set out in the 1964 Civil
Procedure Code of the RSFSR listed.41
More importantly, most of the com-
plaints that were allowed to be submitted
in court against administrative activity
were related to administrative penalties. In
regards to the relation between the state
and the citizens, administrative penalties42
became the main instrument43 of adminis-
trative law. Since an administrative penal-
ty or sanction imposed a harsher burden
on citizens, it was a tendency in Mongolia
that its legality needed to be checked by
the courts. The influence of administrative
law development from Soviet44 adminis-
trative law which also caused introducing
the right to court in the area of administra-
tive penalty.
However, during this time in socialist
states even in the event that some com-
plaints were accepted for review by the
court, it has been observed that at that
time the “court’s role is limited to review-
41
“Over the years courts gained the right to review a short
list of specific complaints. The 1964 Civil Procedure Code
of the RSFSR (The Russian Soviet Federated Socialist
Republic) listed among others these complaints: errors in
electoral disputes, seizure of property to cover unpaid taxes,
fines and license suspensions imposed by the police, the
actions of judicial enforcers (implementing debt collection
decisions), and certain complaints against housing officials.”
Peter H. Solomon, “Judicial Power in Russia: Through the
Prism of Administrative Justice,” Law & Society Review 38,
no. 3 (2004): 555.
42
“Although state imposition of coercion against a person
who has violated a norm of any branch of socialist law has
the form of pressure on him to accept responsibility, if we
look at it from the viewpoint of other members of society,
it appears as a proper, straightforward demand.” Erentsen
and Biraa, “The Nature of Socialist Law,” 38. Later in 1990s,
Professor J. Dolgorsuren was the leading scholar on the
subject of administrative penalty.
43
“The rules of the government that were most intrusive in
the lives of the citizens were a central part of the ‘adminis-
trative law’”. Howard N. Fenton, “An Essay on Administrative
Law Reform in the Former Soviet Union,” Journal of East
European Law 7, no. 1 (2000): 53.
44
Since the 1961 reform of the procedure took place in the
Soviet. Gellhorn, Ombudsmen and Others, 358. “The only
significant step in this area was the 1961 law ‘On Further
Limiting the Application of Administratively Imposed Fines’.
This provided for the appeal of administratively imposed
penalties to the people’s court (…). Osborn, “Citizen versus
Administration in the USSR*,” 230.
LAW REVIEW
ing the legality (zakonnost).”45 It was iden-
tical in Mongolia and evident from the lan-
guage of Article 201 and 202 (procedure
and decision of court) of the Civil Investi-
gation Procedure Law, in which the court
was required to focus on the legality and
correctness of the complained of activity
of the administrative organ. In a leading
1973 textbook, MPR Administrative Law,
Professor Chimid emphasized that the
purpose and content of the court’s exam-
ination, when deciding a concrete case,
depends on whether the legal acts of an
administrative organ or, its official, con-
forms to the requirements of socialist le-
gality.46 In other words, when deciding the
case, the main focus of court procedure
was to find out whether there was an error/
illegality, in terms of state administrative
organ activity, which caused the dispute.
Concerning cases involving an adminis-
trative penalty, the court was obliged to
determine whether the administrative pro-
cess of imposing the penalty was justified
under the relevant law and regulation and
whether the actions of the person fined
was a violation of law for which a fine was
appropriately imposed.
It is important to note that person
who can file a complaint is not referred
to as a plaintiff but instead is deemed a
complainant.47 Concerning the appropri-
ate name for an administrative organ, in
an administrative dispute context, it is not
referred to as a defendant but an admin-
istrative organ and a representative (of
the administrative organ) can participate
in the court procedure as to provide an
answer to complaint. The Procurator’s
office was empowered with the authority
to initiate48 the complaint process, as if it
were necessary for the sake of the state
45
Barry, “Administrative Justice: The Role of Soviet Courts
in Controlling Administrative Acts,” 76.
46
Biraa, БНМАУ-ын захиргааны эрх, 404.
47
Zundui Darjaa and Chinbat Namjil, БНМАУ-ын иргэний
байцаан шийтгэх хуулийн тайлбар [Commentary on
the MPR Civil Investigative Procedure Law] (Ulaanbaatar,
1984), 08.
48
БНМАУ-ын Иргэний байцаан шийтгэх тухай хууль, art.
4(2), 45 (1967).
12
2017 5(65)
and citizens’ interest. The complaints
were differentiated from the ordinary civ-
il cases by some distinct characteristics,
for instance a case cannot be settled by a
reconciliation (settlement by parties to the
case). This is because the issue is no lon-
ger in the hands of the complainant. The
state handles the case with regards to the
purpose of its procedure, which is in due
course a legality check.
In 1967, the Civil Investigation Pro-
cedure Law of the MPR was in force. It
remained so until the transition period
(1990) without change,49 including the
listing of allowable administrative com-
plaints. In other words, no extension50
took place until the eve of the 1992 Con-
stitution, which is when Mongolia’s status
shifted from a soviet state to a free market
oriented state. In the meantime, Article 58
of the 1977 Brezhnev Constitution51 es-
tablished a general approach in which cit-
izens could appeal acts of governmental
officials52 to the court by filing a complaint.
From the Brezhnev Constitution, admin-
istrative law in the Soviet Union tended
to make administrative law reforms on a
spectrum, usually from an enumerative
49
In 1977, 1979 this law amended but the amendments was
not relevant to the point of this research.
50
In Mongolia, the Law on Procuracy Supervision of the
MPR in 1977, and following year in 1978 Law on Court
Organization of the MPR enacted. Yet, these laws did not
provide change in list of complaint. The Procuracy super-
vision extended over court procedure and judgment (article
14) and established military, and railway courts as special
courts by these laws.
51
The Constitution was adopted in 1977. The constitutional
provision in question is Article 58, which has three related parts:
Citizens of the USSR have the right to address complaints
against actions of officials and of state and social organi-
zations. (…) Acts of officials committed in violation of the
law, in excess of authority, which infringe the rights of citi-
zens may be appealed to court in the manner established
by law. Citizens of the USSR have the right to compensation
for damages inflicted by unlawful actions of state and so-
cial organizations, as well as officials, in the course of the
performance of their official duties.” Barry, “Administrative
Justice: The Role of Soviet Courts in Controlling Adminis-
trative Acts,” 66.
52
Though there were argument between scholars at that
time on the question of whether Article 58 provides “a gener-
al presumption of judicial review, with only a few exceptions,
implies a much-expanded role for the courts. [Or] a list of
administrative acts that can be reviewed by courts perhaps
suggests a narrow focus for judicial review little different
from what exists at present. Ibid., 73.

approach towards a general clause ap-
proach, in terms of court jurisdiction over
administrative disputes. In other words,
change began when the Procuracy53 as
the chief destination for handling com-
plaints against acts of officials and leaned
in the direction of instituting the court as
the main instrument for resolving such
complaints. In this period in the Soviet
Union, the listing approach was formally
maintained; nevertheless, also introduced
general clause type example in the list.
From the viewpoint of this research,
consideration over introducing an exclu-
sive list (negative enumeration) or an in-
clusive list (positive enumeration)54 in the
Soviet Union is important. In accordance
with the constitutionally preset norm (Arti-
cle 58 of the 1977 Constitution), the law55
entitled, “On the Procedure for Appeal to
Court of Illegal Actions of Officials Infring-
ing on the Rights of Citizens,” which was
enacted on June 30, 1987 and became ef-
fective on January 01, 1988, was the key
achievement that enabled the transition
from the traditional objective legality par-
adigm to a subjective rights based mod-
el. John Quigley claimed that provisions
53
Prior to it, the process of hearing citizen’s grievances
against administration rarely gets at court. Instead, the suit-
able procedure is a complaint mechanism in which petitions
are heard by such agencies as higher administrative levels
of the organization in question, the Procuracy. According
to Maggs “Legislation in 1980s enhanced the power of the
Procuracy by allowing it to suspend illegal acts of adminis-
trative agencies.” Peter B. Maggs, Substantive and Procedural
Protection of the Rights of Economic Entities and Their Owners
in the USSR, In search of the law-governed state (Washing-
ton, D.C., 1991), https://www.ucis.pitt.edu/nceeer/1991-
805-01-Maggs.pdf (accessed August 14, 2016).
Numerous reform initiatives sought to eliminate the general
supervisory function over administrative organs and its ac-
tivities from the end of 1980s to mid-1990s. Nonetheless,
general supervisory authority of the Procuracy was dimin-
ished within the deletion of the term “supreme supervision”
from the 1977 Constitution on 1990, it was preserved in the
Law on the Procuracy of 1992.
54
Barry, “Administrative Justice: The Role of Soviet Courts
in Controlling Administrative Acts,” 73.
55
“USSR Law, 2 November 1989, “On the Procedure for
Appeal to Court the Illegal Actions of Bodies of State Admin-
istration and of Officials Infringing on the Rights of Citizens,”
Ved. SSSR 1989 No. 22, item 416, replacing USSR Law
1987, “On the Procedure for Appeal to Court of Illegal Ac-
tions of Officials Infringing on the Rights of Citizens,” Ved.
SSSR 1987 No. 26, item 388, as amended, 20 October
1987.
13
Before Creating a Law
of this law signified the prevailing position
in the direction of a progressive tenden-
cy toward wider access to the court and
the complaint process, which denied the
traditional approach of only allowing a lim-
ited listing of available complaints.56 Con-
sequently, complaints that citizen could
bring to the court against administrative
officials were no longer limited57 to those
specifically named actions in the laws.
In the meantime, it was only in 1990
in Mongolia that a paradigm change be-
gan at the institutional level, transitioning
from an enumerative clause approach to
a general clause approach. Such change
was greatly influenced by the reform in
Soviet Union that took place in 1977 and
1987 respectively, in terms of significant
changes in Russian law at the constitu-
tional and statutory law level.
1.5. Post Socialist Period (from
1990 until 2002/2004)
1.5.1 Initiative toward Separate
Administrative Litigation
1990 Special Law on Complaint
Procedure
Until the 1990s, soviet influence re-
garding the Mongolian state and admin-
istration had been strong and stable for a
long time. Moreover, the theory of Mon-
golian administrative law and practice
was rooted58 in the Soviet regime. How-
ever, historical events in the late 1980s
and early 1990s in the Soviet Union
placed Mongolian administrative law on a
path to legal reform. During the period of
Perestroika in the Soviet Union, reforms
took place widely in level of state and so-
cietal structure. As Mongolia was directly
56
John Quigley, “The New Soviet Law on Appeals: Glas-
nost in the Soviet Courts,” International and Comparative Law
Quarterly 37, no. 01 (1988): 177.
57
However, language used in Article 1 as it states “acts
committed individually by officials” believed to limit its appli-
cability for collegial bodies.
58
Where “(…) the bureaucracy was accountable only to
itself, and administrative law was the body of laws that con-
trolled the lives of the citizens.” Fenton, “An Essay on Ad-
ministrative Law Reform in the Former Soviet Union,” 51.
LAW REVIEW
influenced59 by these developments, var-
ious laws were enacted in on March 23,
1990,60 including: the Law on Procedure
for Submitting the Complaint to the Court
about Unlawful Activity of Organization
and Official which Breached Right of Cit-
izen of People’s Republic of Mongolia61
(hereinafter “1990 Special Law on Com-
plaint Procedure”).
Even though the 1960 Constitution
provided that all court procedure be in ac-
cordance with democratic principles, it was
only recognized on the surface, and in fact
the courts were used as a control appara-
tus by the state over the citizens prior to
the 1992 Mongolian Constitution62. Apart
from typical soviet law,63 the purpose of
the 1990 Special Law on Complaint Pro-
cedure, as stated in Article 1, was to fa-
cilitate the selection of the correct judicial
venue for disputes concerning the breach
of citizens’ lawful rights by an illegal ac-
tivity of a state administrative organ and
its officials. Under this law, citizen’s rights
that were provided by the Constitution and
other legal acts were somewhat listed, but
59
“In Russia, And in 1987 after 10 years with the consti-
tutional provisions explicitly enables the right to appeal
against administrative acts at court, first time adopted the
law, USSR Law, on 30 June 1987, “On the Procedure for
Appeal to Court of Illegal Actions of Officials Infringing on
the Rights of Citizens”.” Maggs, Substantive and Procedur-
al Protection of the Rights of Economic Entities and Their
Owners in the USSR, 23.
60
On same day, another law was adopted by then Parlia-
ment of People’s Republic of Mongolia, which is Монгол
Улсын шүүх, прокурор, мөрдөн байцаах, хэрэг бүртгэх
байгууллагын хууль зөрчсөн ажиллагааны улмаас иргэнд
учирсан хохирлыг арилгах журмын тухай хууль [Law on
Procedure of Removing the Damage to the Citizen that
Caused by Unlawful Activity of Investigative, Prosecutorial
and Judicial Organization of People’s Republic of Mongolia]
(1990 оны 3 дугаар сарын 23-ны өдөр).
61
1990 Special Law on Complaint Procedure [Law on Pro-
cedure for Submitting the Complaint to the Court about Un-
lawful Activity of Organization and Official which Breached
Right of Citizen of People’s Republic of Mongolia] (1990
оны 3 дугаар сарын 23-ны өдөр).
62
Amarsanaa Jugnee, ed., Монгол Улсын шүүх эрх
мэдлийн шинэтгэл (Сүүлийн 20 жилийн тойм) [The
Judicial Reform of Mongolia (Overview for Last 20 Years)]
(Ulaanbaatar, 2010), 10, https://www.forum.mn/res_mat/
res_mat-43.pdf (accessed May 19, 2017).
63
In light of perestroika control over administration loos-
ened and “one of the significant changes in the field of So-
viet law [in recent years] is that the term socialist legality has
almost ceased to be used; instead, discussion is focused
around the concept of the law-based state. Oda, “TITLE,” 02.
14
2017 5(65)
the application of the law was not limited
to the laws and rights specified. The rights
mentioned as examples in this law were
property, family, housing, labor and other
personnel rights, and the court was em-
powered by Article 6 to suspend the effect
of an administrative activity64 which was
being challenged by complainant prior to
the decision.
In addition to the broad range of pri-
vate rights that could be claimed under
the 1990 Special Law on Complaint Pro-
cedure, there were no limitations on who
could be sued under this law as a defen-
dant. Article 2 of the 1990 Special Law
on Complaint Procedure recognized two
types of illegal activities65 by state admin-
istrative organs and their officials. The first
illegal activity are those that limit or pre-
vent citizens from exercising rights provid-
ed by law, and the second illegal activity
are those that illegally impose an obliga-
tion or duty on a citizen.
Moreover, the 1990 Special Law on
Complaint Procedure was indeed a sepa-
rate law from civil procedure, thus it tended
to specifically regulate complaint proce-
dure. It relied on the Rules of Civil Proce-
dure66 in terms of the process required for
handling complaints and appeals. The first
paragraph of Article 5 of the 1990 Special
Law on Complaint Procedure specifically
mentioned that when the court decides
on the complaint, it is required to reflect/
consider provisions of the 1990 Special
Law on Complaint Procedure. Neverthe-
less, the rules of civil procedure applied
as a general rule. This was the first time
in Mongolia, that a complaint against an
administrative activity was regulated by a
separate law, other than civil procedure.
64
However, the article emphasized to be applied only in
case where the illegality of administrative activity is easily
determinable.
65
Normative acts were not allowed to be challenged by
complaint through this law according to Article 11 of 1990
Special Law on Complaint Procedure.
66
Монгол улсын иргэний эрхийг хохироосон төрийн
захиргааны байгууллага, албан тушаалтны хууль бус
үйл ажиллагааны талаар шүүхэд гомдол гаргах журмын
тухай хууль, art. 5 and 9.

Based on these characteristics it is clear
that the 1990 Special Law on Complaint
Procedure was not a traditional soviet law.
Most importantly, the enactment of
this law was an attempt to change from
an enumeration clause approach toward
a general clause type of administrative
procedure. On the one hand, the 1967
Civil Investigation Procedure Law pro-
vided an exclusive list67 of complaints as
was described in a previous section of
this chapter. That list was a closed-list,
meaning that only the complaints that
were specifically named in this list were
allowed; therefore, it was a very limited
and exclusive list (negative enumera-
tion). On the other hand, the 1990 Special
Law on Complaint Procedure introduced
a general clause type68 jurisdiction to the
court which prescribed complaints against
infringement of some rights but was not
limited to those rights. However, Judge
Zandraa69 noted that the 1990 Special
Law on Complaint Procedure lacked a key
instrument for court procedure, namely, on
the issue of who has the burden of proof.
Moreover, he pointed out that the purpose
of this law failed to provide a clear answer
to the question as to whether the purpose
of the 1990 law was to protect individual
rights from illegal administrative activity,
which was a newly emerging question at
that time, or court control over administra-
67
БНМАУ-ын Иргэний байцаан шийтгэх тухай хууль, art.
197 and 200 (1967).
68
However, it was not purely a general clause, rather it was
an inclusive list (positive enumeration) from the viewpoint of
legally protected citizen rights. Article 1 provided example
list of citizen’s right that can be pursued by complaint if it’s
believed to be infringed by acts of administrative organ and
its officials.
69
Zandraa Orosoo was the presiding justice of Adminis-
trative Chamber of the Supreme Court, he is one of the
key person in administrative court in terms of experience
and contribution for its development. Judge Zandraa led
the drafting of the 2010 amendment to the LPAC. He ob-
served, when adopted the 1990 Special Law on Complaint
Procedure that both consisted of an administrative review
and judicial review phase; thus, in this way it was similar
to the LPAC his commentary. Zandraa Orosoo, “Монгол
Улсад захиргааны хэргийн дагнасан шүүх байгуулагдсан
нь” [Establishment of Specialized Administrative Court in
Mongolia], in Монголын Шүүх II Түүхэн хөгжлийн тойм,
өгүүлэл нийтлэл, ed. The Supreme Court of Mongolia, 2
(Ulaanbaatar, 2016), 227.
15
Before Creating a Law
tion.70
Moreover, this statutory law level
change was not practicable.71 In Mon-
golia, there were no separate courts de-
signed for handling specifically adminis-
trative complaint procedure, but ordinary
courts had jurisdiction based on to Article
3 of the 1990 Special Law on Complaint
Procedure. Professor Chimid72 observed
that the 1990 Special Law on Complaint
Procedure had not come to “a life,” and
described the period from 1990 to 2004
as a sluggish transition regarding full ju-
dicial control over public administration.
The primary reason for this slowness
was because the ordinary court still had
jurisdiction over the complaint process
through civil procedure, and the traditional
practice of complaint procedure was still
utilized. However, there may have been
other variables that contributed to this
uselessness. For instance, as the same
research suggested73 that one of the rea-
son it was not practicable was the rights
protected by this law was not exceeded
mostly property related personnel rights.
Another thoughtful observation that
has responded to this question is the as-
sertion that the sluggishness of changes
in the administrative law from 1990 to
2004 may reside in aspects of its past,
namely the old regime. Traditionally Mon-
golian citizens were not encouraged, or
used to, approaching the court with a
complaint against administration. Instead,
70
Zandraa Orosoo, “Захиргааны шүүх иргэний үндсэн
эрхийн хамгаалалт болж чадсан” [Administrative Court
Became a Protection of Fundamental Rights of Citizen]
(Ulaanbaatar, 2014.05.28), Ulaanbaatar, http://www.su-
premecourt.mn/news/75 (accessed May 29, 2017).
71
There were not many cases decided through this new
law, and it was difficult to find the case according to this
law. In fact, these are signs of another attempt to change
the direction in protection of right in broader means at court.
Tungalag Namsrai, “Монгол Улсын захиргааны хэргийн
шүүхийн онцлог” [Characteristics of Administrative Court
of Mongolia], (presented at Constitution and Democratic
Rechtsstaat, Ulaanbaatar, 2004).
72
Chimid Biraa, ed., Захиргааны хэргийн шүүхийн тухай
мэдэгдэхүүн [Knowledge on Administrative Court] (The Na-
tional Legal Center, 2004), 23.
73
Jugnee, Монгол Улсын шүүх эрх мэдлийн шинэтгэл
(Сүүлийн 20 жилийн тойм), 41.
LAW REVIEW
it was customary to appeal to a higher
level administrative organ or local party
which Mongolians deemed a more effec-
tive means for resolving administrative
disputes. Moreover, there was little trust in
the court because they were totally under
the control of the political party and the ex-
ecutive branch of the government74.
According to study on Enforcement
Status of the Recovery of Infringed Rights
Caused by Illegal Administrative Deci-
sions implementation of the1990 law was
mostly limited to the recovery of mone-
tary damages, including lost salary, until
2001.75 A few examples76 of complaints
decided by the 1990 Special Law on Com-
plaint Procedure include a judgment of the
Chingeltei District Court in Ulaanbaatar
City, dated October 19, 1995 concerning
a dispute related to the housing applica-
tion to the Border Defense Hospital. The
court ruled77 that because the defendant,
who was the chief of the hospital, failed to
further submit the citizen’s (plaintiff’s) ap-
plication for housing to the Housing Com-
mission, it breached the citizen’s right. In
this case the court applied Article 7 of the
1990 law as a substantive law, and subse-
quently ordered the hospital chief to sub-
mit and discuss the application for hous-
ing to the relevant commission. In another
74
Namsrai, “Монгол Улсын захиргааны хэргийн шүүхийн
онцлог,” 102–3.
75
Ganzorig Dondov, “Захиргааны хууль бус шийдвэрийн
улмаас хохирсон хохирогчийн эрхийн хэрэгжилтийн
төлөв байдал” [Enforcement Status of the Recovery of In-
fringed Rights Caused by Illegal Administrative Decisions],
The Human Right 4 (2007): 74.
76
In Archive of the Capital City Appeals Court, I made re-
search on selected years of judgment of the Chingeltei Dis-
trict Court to seek particular cases decided by the 1990 law.
Because claim or complaint at that time must be filed with
court that defendant resides and most central and city ad-
ministration was located in Chingeltei and Sukhbaatar dis-
trict. Especially for central government agencies, Chingeltei
district Court was the most likely venue for cases in nature
administrative. Among judgments of 1995, 1998 and 2002,
only two relevant cases were found.
77
А.Цэрэнчимэдийн орон сууц хүссэн өргөдлийг
шийдвэрлээгүй орхигдуулсан тухай нэхэмжлэлтэй
хэрэг [Application for housing Case] Case no 619
(MN|Улаанбаатар Chingeltei District Court).
16
2017 5(65)
case,78 the court revoked a decision to
increase the fee related to domestic dog
and cat owners by a public management
company affiliated with Ulaanbaatar city.
The relationship between the 1990
Special Law on Complaint Procedure
and the 1967 Civil Investigation Proce-
dure Law was uncharacteristic. When
the Special Law on Complaint Procedure
was enacted in 1990, the 1967 civil pro-
cedure law was not only in force, but it
also had jurisdiction over the enumerat-
ed complaints against administration. No
amendments were made to the 1967 civil
procedure law in relation to the adoption
of the 1990 Special Law on Complaint
Procedure79 which gave rise to the ex-
istence of two different types of parallel
procedure concerning complaints against
administration. Because civil procedure
had been used for a couple of decades, in
the area of complaint procedure, and the
same court acquired this new jurisdiction,
the ordinary court often tended80 to apply
the rules of civil procedure. Overall, the
transition of utilizing a general clause ap-
proach, in terms of allowing all complaints
against administration, was not fully un-
derstood by most lawyers and judges in
early 1990s. Few scholars understood the
intent of the general clause type.
After Collapse of Socialist Re-
gime: 1992 Constitution
With ample influence from Perestroi-
ka, Mongolia abolished the socialist re-
gime with a single predominant party at the
end of the 1980s, and the Law on Amend-
ments to the Constitution of the MPR was
78
Монгол нохой Нийгэмлэгийн нэхэмжлэлтэй хэрэг [“Mon-
gol Dog” Society Case] Case no 641 (MN|Улаанбаатар
Chingeltei District Court).
79
This law is replaced by the enforcement of the Law on
Procedure for Administrative Cases on June 01, 2004. On
June 19, 2015 the General Administrative Law was enact-
ed and the Administrative Court Procedure Law which was
enacted on February 4, 2016 replaced the Procedure for Ad-
ministrative Cases of 2002. Additionally, the Law on Proce-
dure for Disposal of an Application by a Citizen to the State
Organization and Officials which was adopted on April 17,
1995 and is still in force.
80
Biraa, Захиргааны хэргийн шүүхийн тухай
мэдэгдэхүүн, 23. See footnote 131.

enacted by the Peoples Great Khural on
May 12, 1990. These amendments pro-
vided for the establishment of parliament,
multiparty elections, and the drafting of a
new constitution.81 A preliminary operating
Parliament with a multi-party system was
established and it proclaimed the legiti-
macy of private property and determined
a new economic relation by adopting 35
new laws82 and amendments. All of these
became a solid base in the process of
adopting the 1992’s Constitution.
This promotion of democracy had
the potential to transform the political as
well as government administration sys-
tems throughout the country. The laws
that existed up to the date of enforcement
of the 1992 Constitution, which contained
provisions that infringed upon human
rights, were deemed void.83 One of the
most important elements in the reform of
the State’s institutional and legal frame-
work has been modifying the judicial84
and administrative system of Mongolia to
conform to the new Constitution in terms
of protection of human rights. The draft-
ers of the Constitution not only declared
human rights and freedoms but they also
paid special attention to the government
obligation to ensure conditions for the re-
alization of rights, a recent assessment85
confirms. The Procuracy was not posi-
tioned as strong as it was before and was
81
Chimid Enkhbaatar et al., Assessment of the Performance
of the 1992 Constitution of Mongolia, Assessment (Ulaan-
baatar, 2016), 11, http://www.mn.undp.org/content/dam/
mongolia/Publications/DemGov/Undsen%20huuliin%20su-
dalgaa_eng.pdf?download (accessed April 13, 2017).
82
Amarsanaa Jugnee, Transitional Period and Legal Re-
form in Mongolia, 2009, 42–43.
83
Alan J. K. Sanders, “Mongolia’s New Constitution: Blue-
print for Democracy,” Asian Survey 32, no. 6 (June 1992):
507.
84
Path dependence is strong, not only at the statutory law
level, but also at the constitutional level, as Doctor Munkh-
saikhan writes, “Even though Mongolia rejected the Soviet
model of constitutional review, this model never lost its in-
fluence over the creation of the constitutional review (…).”
Munkhsaikhan Odonkhuu, Towards Better Protection of
Fundamental Rights in Mongolia: Constitutional Review and
Interpretation, 2014, 71, http://ir.nul.nagoya-u.ac.jp/jspui/
bitstream/2237/20123/1/CALEBOOK%204.pdf (accessed
May 31, 2017).
85
Enkhbaatar et al., Assessment of the Performance of the
1992 Constitution of Mongolia, 55.
17
Before Creating a Law
not granted any role in the settlement of
complaints against administrative agen-
cies under the new laws. Therefore, su-
pervision by the Procuracy in administra-
tive law was ultimately abandoned at the
constitutional level.
Article 19 paragraph 1 of the Consti-
tution states “The State is responsible to
the citizens for the creation of economic,
social, legal, and other guarantees ensur-
ing human rights and freedoms, for the
prevention of violations of human rights
and freedoms, and restoration of infringed
rights”. As a mechanism and safeguard
of legal guarantee for ensuring human
rights, Article 16 paragraph 14 provides
the right86 to submit a complaint to the
court. Moreover, Article 48 paragraph 1 of
the new Constitution specifically asserts
an intent to establish an administrative
court
However, a notable characteristic
among the 1960 and 1992 constitutions
is that both contain similar provisions on
the right to submit a complaint. Article
85 of the 1960 Constitution stated that
all citizens (his/her own rights and legal
interests are not related) have a right to
submit written or verbal petitions and
complaints concerning illegal acts of the
state organs or public officials. However,
a right to submit a complaint, not claim or
action, as a means of protection against
the infringement of rights and freedom is
granted under Article 16 paragraph 14 of
the 1992 Constitution. Concerning the us-
age of legal terms, the 1992 Constitution
does not clearly distinguish itself with re-
gards to the question of right as defined
to submit a complaint (not an action) from
86
Article 16 (14) of the 1992 Constitution states as “Right to
file an complaint to the court to protect his/her right if he/she
considers that the right of freedoms as spelt out by the Mon-
golian law or an international treaty have been violated; to
be compensated for the damage illegally caused by other”;
Moreover, Article 16 (12) reads as “Right to submit a petition
or a complaint to State bodies and officials.” Монгол Улсын
Үндсэн Хууль [The Constitution of Mongolia] (1992).
LAW REVIEW
the old87 constitutional determination. A
feasible difference is that the 1960 Con-
stitution did not designate a court that was
an institution responsible for complaint
settlement, but the contemporary consti-
tution specified a court as a destination for
complaints.
The relationship between a private
person and the state at the level of statuto-
ry law and practice, after the 1992 Consti-
tution, is reflected in the famous phrase88
by Otto Mayer: “a Constitution changed
but administrative law endures.” This was
certainly the case in Mongolia, at least un-
til 2004. The Mongolian parliament’s goal
was to reform the legal environment89
consistent with the constitutional princi-
ples established within the 1992 Constitu-
tion. The Law on Administrative Penalty90
was adopted in 1992 as one of the first
laws following the new constitution. How-
ever, the purpose of this law as stated in
Article 1, was for prosecuting a person
who is in violation of administrative regu-
lations. According to Article 9 paragraph 6
of said law, a right to submit a complaint
to the court is provided if a violator asserts
that his/her rights and interest have been
infringed during the administrative penalty
procedure. In that case, the court proce-
dure will be carried out by the rules of civil
procedure.91
There has been a significant num-
ber of substantive administrative laws that
were either revised as new versions or ad-
opted as entirely new legislation. Accord-
87
Similar wording used not only in the Article 58 of the 1977
Brezhnev Constitution of the Soviet Union but also Article 97
of the 1954 Constitution and Article 41 of the 1982 Constitu-
tion of the People’s Republic of China.
88
Pieter Henning, “Thoughts on Administrative Law,” Comp.
& Int’l L.J. S. Afr. 2 (1969): 94.
89
The Legal reform program of Mongolia, the main Direc-
tions for Enhancing Mongolian Legislation until 2000 and
action Plan for implementation of this program approved on
1998 by the parliament. The Legal Reform Program set the
goal to draft 69 new law or revise existing laws and make
amendment to other 49 laws by 2000. Jugnee, Constitution-
alism and Constitutional Review in Mongolia, 32–33.
90
Захиргааны хариуцлагын тухай хууль [The Administra-
tive Penalty Law].
91
Ibid., art. 19 (6).
18
2017 5(65)
ing to the research report,92 there were 73
laws that contained a provision on proce-
dure to instigate a complaint or an appeal
against administration by October 2003.
However, these complaints were decided
by the rules of civil procedure in civil court.
Often, those new and revised administra-
tive laws regulated and emphasized more
on the authority of administrative agencies
in their designated areas in public law.
Thus, interactions between citizens and
the state, in terms of providing a remedy
for rights of individuals affected by acts of
administration were often not sufficiently
recognized by laws.
1.6. SUMMARY
In order to understand Mongolian
legal concepts, particularly in the area of
administrative law from the 1920s to the
1990s, it must be studied with the roots
and core ideology of Russian administra-
tive jurisdiction in the 20th century. During
this period Mongolia existed under the
heavy influence of Russia in almost every
instance of social, economic and political
facets, and it ultimately developed as a
Soviet State. Administrative law was also
affected by this influence. In fact, during
the socialist era93, administrative law was
often used as method to control over Mon-
golian administration and society. The ad-
ministrative legal system was designed for
the imposition of control and maintenance
of order over administrative agencies and
citizens. Inseparable with socialist ad-
ministrative law was the presence of two
characteristics, general supervision over
the administration by prosecution and ad-
ministrative responsibility/punishment to
the citizens.94
Historically, the Procuracy is the key
institution as administrative adjudicator
and the establishment of general super-
92
Jugnee, Монгол Улсын шүүх эрх мэдлийн шинэтгэл
(Сүүлийн 20 жилийн тойм), 73.
93
Formally, Mongolia was socialist state from 1924 Consti-
tution to early 1990s.
94
This was the first form of administrative jurisdiction in so-
viet states.

vision of the Procuracy was the develop-
ment towards a control type. Objective
legality of administrative action and its
supervision is the most important char-
acteristic from the viewpoint of adminis-
trative law. In other words, ascertaining
a remedy for the violation of an individual
right was not a mission of administrative
control available at that time. Later, court
control through civil procedure for enu-
merated administrative complaints was
established, however it focused mostly on
administrative punishment. And yet again
Mongolia experienced another wave of
influence by Soviet administrative law
development in the 1980s. The paradigm
changed and eliminated the Procuracy’s
control and instituted general clause type
complaints through civil procedure in early
1990s.
The 1992 Constitution directly recog-
nized the establishment of a specialized
court, such as an administrative court, but
it did not provide for the immediate estab-
lishment of such an institution by statutory
law, which was necessary to accomplish
constitutional change. Subsequently, le-
gal transplantation occurred in the field
of administrative litigation from Germany.
Change towards administrative court as a
present system from general supervision
of the Procuracy as a former system be-
gan in 2002. Since the country claims that
it belongs to the Continental Legal sys-
tem, this thesis has adopted a historical
comparative approach to explain specif-
ic issues associated with judicial review
under administrative law by examining
French, German and Japanese concepts
in following chapter. These issues relate
specifically to tension between the role
of judicial review in administrative law as
protector of rights and interests versus
the conception of administrative law being
used as controlling mechanism over the
legality.
1.7. CONCLUSION
This chapter sought to examine the
historical establishment of the settlement
19
Before Creating a Law
of administrative disputes that existed in
Mongolia since the 1920s, especially con-
cerning whether it was to control the ob-
jective legality over administrative activity
or to provide a remedy of infringed sub-
jective rights by administrative agencies.
In due course, the soviet law influ-
ence was strong and stable in Mongolian
administrative law development. From
the viewpoint of administrative litigation
and its history, the soviet administrative
dispute settlement is one variety of the
control type. Thus, in Mongolia the control
type administrative litigation procedure
was established. This was a non-litigation
(non-contentious) type procedure; in other
words, it was not an adversarial system.
Procuracy was the key institution utilized
in the settlement of administrative dis-
putes. The establishment of general su-
pervision of Procuracy was the develop-
ment towards the advancement of control
type administrative dispute settlement in
Mongolia.
The court had a very limited role in
this procedure while the non-judicial or-
gan, the Procuracy, had the main role. An
important element that is characteristic of
this approach to administrative dispute
settlement is the very narrow and limited
amount of control granted to the court.
The amount of control the court had was
limited by civil procedure which allowed
it to only review enumerated complaints,
mostly administrative punishments. The
purpose of this procedure was to main-
tain objective legality over administrative
activities. Thus, objective legality of ad-
ministrative activity and exercising super-
vision over administration were the most
important characteristics from the view
point of remedy. In other words, the rem-
edy for the infringement of an individual
right was not the purpose of administra-
tive litigation at that time. The paradigm
change to eliminate the control type and
enumerated complaints procedure began
formally at the constitutional and statuto-
ry law level in the early 1990s. However,
to date paradigm change has not yet not
been achieved in substance.
LAW REVIEW
UNDERSTANDING THE PURPOSE OF DISCLOSURE
WITHIN SECURITIES REGULATION: A PATHWAY
TO REFORM IN MONGOLIA
Brandan M. Goodwin Juris Doctor
Candidate 19’, Regent University School of
Law B.A. Political Theory and Constitutional
Democracy 16’ Michigan State University
INTRODUCTION
Starting from the very beginning,
securities can be defined as “the proof of
ownership or debt that has been assigned
a value and may be sold”.1 Securities
arose as a method of supplying equity to
investors by offering ownership in a vast
array of companies. These symbols of
ownership are often bought and sold on a
vast array of exchange markets. Due to the
nature of this process, it is often regulated
by government agencies seeking to
maintain the fairness of buying and selling
securities for investors. What developed
is the primary purpose of government
securities regulation to protect those
investors who seek to purchase or sell
securities in mandated stock exchanges.
This purpose has essentially
translated into the legal mandate requiring
1
What are Securities(in Finance)? – The Street Definition,
TheStreet - Dictionary of Financial Terms (Oct. 19, 2017)
https://www.thestreet.com/topic/47042/securities.html; For
a more complete definition See 15 U.S.C 78LLL (14) (2012)
(Explaining the definition of security for the purposes of the
Securities Exchange Act of 1934 in the United States)
20
2017 5(65)
that all potential investors have equal
access to essential corporate information
in order to make educated investment
decisions regarding the purchase or sale
of securities.2 This information influences
the way investors react to changes within
the market. It directly influences investors
across the spectrum in determining if
investing in individual securities is “worth”
the financial return. Mandatory corporate
disclosures serve as one method where
companies are forced to make investment
information available to the public pool of
investors. This spread and availability of
information prevents the well-connected
or corporate insiders from placing a
“monopoly” on material information that
is required to make informed and efficient
trades. Utilizing all of the available
information is how investors make
decisions on the value and accuracy of
that value of individual securities.
This article will provide an overview
of the role of disclosure within the context
of securities regulation. Part I will begin
by providing an introduction to securities
regulation and its international influences.
Part II will examine how why a system
of corporate disclosure is necessary to
achieve the goals of market fairness by
providing accurate reflections of price
levels and preventing market abuses that
hinder corporate accountability and delude
market confidence. This will show how the
goals of market fairness and efficiency
are met through the use of disclosure as
a means achieve wealth maximization
and improve market welfare. After
understanding these basic concepts, Part
2
Bruce W. Klaw, Why Now is the Time to Statutorily Ban
Insider Trading Under the Equality of Access Theory, 7 Wm.
& Mary Bus. L. Rev. 275, 302 (2016).

III will present the situation within Mongolia
surrounding corporate disclosures within
the context of their laws and regulatory
systems. Part IV serves to vindicate into
how a lack of mandated disclosures within
Mongolia can limit market participation
by foreign investors and result in a lack
of trust as shown by perceptions of
corruption in those industries. Part V, will
quickly give some ideas of reform and
present some questions for thoughtful
consideration of how disclosure can be
reformed within Mongolia to address these
growing challenges. This article does not
seek to solve all of the issues presented
in an extremely dense and difficult area of
law. It will simply serve as a introduction to
present general ideas of understanding,
articulate the current regulatory climate
in Mongolia, and present some ideas for
future reforms in the area of securities
disclosure.
I. INTRODUCTION TO SECURITIES
REGULATION AND INTERNATIONAL
PRACTICES
Securities regulation is defined as the
governmental governance that “addresses
markets and financial instruments such as
stocks and bonds.”3 The primary purposes
of regulation in securities are to maintain
the fairness and integrity of the securities
market and to protect investors. Due to the
vast globalization of markets the focus on
securities regulation has expanded from
domestic to global concerns inviting the
need for unity in international regulatory
standards based on these goals.4 Around
the Western world, market regulators
reaffirm these goals in the outline of their
3
Kal Raustiala, The Architecture of International Coopera-
tion: Transgovernmental Networks and the Future of Inter-
national Law, 43 Va. J. Int’l L. 1, 28 (2002).
4
Id. at 29.
21
Before Creating a Law
mission and purpose.5 This has been
increasingly important for developing
markets to adopt these goals where they
seek to interact with larger markets such
as those in the United States, Japan, U.K,
Germany and Canada that collectively
constitute 57% of the world’s stock market
cap as of 2015.6
The culmination of this inter-
cooperation resulted in the creation of The
International Organization of Securities
Commissions (IOSCO) to promote
the need to harmonize “cross country
regulator differences” and “encourage
market integration.” 7 The purpose was
to standardize regulatory practices in
developed markets and import these
practices into developing markets.8
The hope was to persuade high capital
level investors in developed markets
such as the U.S. to invest their capital
into developing markets.9 In 1998, The
International Organization of Securities
Commissions published a guide titled
Objectives and Principals of Security
Regulation. This guide was edited in 2003
to include a comprehensive methodology
5
Janet Austin, What Exactly is Market Integrity? An Anal-
ysis of One of the Core Objective of Securities Regulation,
8 Wm. & Mary Bus. L. Rev. 215, 218 (2017) (stating that
“The Securities and Exchange Commission’s (SEC) stated
mission is ‘to protect investors, maintain fair, orderly, and
efficient markets, and facilitate capital formation.’ Similarly,
in Canada, the stated purpose of the Ontario Securities Act
includes ‘foster[ing] fair and efficient capital markets and
confidence in capital markets.’ The objectives of Germany’s
Securities Regulator, Bundesanstalt für Finanzdienstleis-
tungsaufsicht (BaFin) is ‘to ensure the transparency and
integrity of the financial market and the protection of inves-
tors.‘“)
6
Which Countries Control the Global Stock Market?, Be-
spoke (Mar. 30, 2015), https://www.bespokepremium.com/
think-big-blog/which-countries-control-the-global-stock-
market.
7
Geoffrey R. D. Underhill and Xiaoke Zhang, Setting the
Rules: Private Power, Political Underpinnings, and Legitima-
cy in Global Monetary and Financial Governance, 84 no 3
Int’l Affairs (Royal Institute of International Affairs) 535, 550
(May 2008).
8
Id.
9
Stating how “[c}apital will be king in the global economy”
and how American capital has had a large role in a develop-
ing global society See Richard C. Breeden, The Globaliza-
tion of Law and Business in the 1990’s, 28 Wake Forest L.
Rev. 509, 512-14 (1993).
LAW REVIEW
guide.10 These principles were guided
by and continued to influence the main
goals of securities regulation in developed
markets.11 These three main purpose
were “investor protection, market efficacy
and transparency and the reduction of
systemic risks”12
In 2002, the IOSCO issued
a Memorandum of Understanding
to encourage the member nations
committed to regulation that adopts
these principles.13 All members of IOSCO
endorsed these principles in 2005.14
Mongolia became a signatory and signed
the MOU on June 18, 2014.15 In addition,
the Securities and Exchange Commission
in the United States entered into MOU
(Memorandums of Understanding) with
over 30 nations as of 199816 including
MOU’s regarding technical assistance
to nations such as Indonesia, China and
Russia to help maintain fair and efficient
markets and investor protections.17 As
of 2017, Mongolia has not entered into a
MOU with The Securities and Exchange
Commission of the United States.
II. WHY IS EFFECTIVE CORPORATE
DISCLOSURE IN SECURITIES
LEGISLATION NECESSARY TO AID IN
ACHIEVING MARKET FAIRNESS
Scholarly definitions of market
integrity and fairness revolve around the
idea that a wide variety of investors are
able to use corporate information to predict
10
Underhill, supra note 7, at 550.
11
Id.
12
Id., IOSCO Objectives and Principles of Securities Reg-
ulation, Report of IOSCO, 3 (May 31, 2017) https://www.
iosco.org/library/pubdocs/pdf/IOSCOPD561.pdf.
13
Id.
14
Underhill, supra note 7, at 550.
15
International Membership, Financial Regulatory Commis-
sion of Mongolia http://www.frc.mn/en/b/otha.
16
Raustiala, supra note 3, at 29.
17
Indonesia - https://www.sec.gov/about/offices/oia/oia_bi-
lateral/indonesia.pdf, Russia https://www.sec.gov/about/
offices/oia/oia_bilateral/russia.pdf, China - https://www.sec.
gov/about/offices/oia/oia_bilateral/china.pdf.
22
2017 5(65)
the accurate price of traded securities. 18
What drives market fairness down is the
spreading of misinformation and continued
insider influence.19 Empirical evidence
supports that “[m]arket prices are ‘fair’
. . . because they represent unbiased
estimates of the true or ‘intrinsic’ value
of the underlying companies” and that
market efficiency benefits because
these estimates incorporate all relevant
information into the price.20 The primary
vehicle for the appearance of fairness
within the market has commonly been
some form of mandated disclosure of
corporate information.21 Without an
effective disclosure system, investors
tend to perceive a lack of market fairness
due to “abuse[ive] practices whereby one
person has a discriminatory informational
advantage over another.”22 Potential
investors that perceive this unfairness will
often decline to participate in the market
as their trust in its equality decreases.23
The end result is a negative effect on
national economic welfare24 and the fall
in participation can be detrimental to
economic growth.25
A. INVESTMENT INFORMATION
AND ACCURATE PRICING OF
SECURITIES
One of the purposes of disclosure
“is to provide investors with adequate
18
For a variety of definitions of market fairness and integrity.
See Austin, Supra note 5, at 231-35
19
See Austin, Supra note 5, at 231-35
20
Gary F. Goldring, Mandatory Disclosure of Corporate Pro-
jections and the Goals of Security Regulation, 81 Colum. L.
Rev. 1525, 1527-28(1981).
21
Jeff Schwartz, Fairness, Utility, and Market Risk, 89 Or.
L. Rev. 175, 176 (2000).
22
Austin, Supra note 5, at 236
23
Luigi Guiso, Paola Sapienza & Luigi Zingales, Trusting
the Stock Market, 63 J. FIN. 2557, 2557 (2008) (explaining
that a general lack of trust decreases stock market participa-
tion and the amount of wealth invested in securities.)
24
Austin, Supra note 5, at 236 (arguing that trust and con-
fidence in the markets is critical to the welfare of a given
nation)
25
Stock Participation in Belgium has greatly improved eco-
nomic growth. See Stijn Van Nieuwerburgh, Stock Market
Development and Economic Growth in Belgium, New York
University Stern School of Business (Jul. 5, 2005).

information on which to base investment
decisions and to maintain fair and orderly
securities markets.”26 The disclosure
of information allows for all relevant
information to be incorporated into the
price at a current moment in time.27 Due
to the time sensitivity of the market,
“timely disclosure of an event contributes
to market  efficiency because information
is most relevant when it is close in
time to the event.”28 Consequently the
presentment of inaccurate or negative
price affecting information can create
artificially inflated prices. “For example,
delaying bad news may allow the
company’s share price to remain artificially
high and allow the company to borrow
money at a lower cost of funds than is
actually appropriate given the company’s
financial state.”29 Thus in theory the timely
disclosure of material information would
insulate investors from making securities
trades with insufficient, inaccurate or
speculative information.30 The frequency
of price miscalculations based on incorrect
material information31 often results in the
erosion of the utility of those investments
by misdirecting investors to inefficient
security purchases.32 On the other side
of this example, the disclosure of accurate
information allows ordinary investors to
appraise the value of the instruments and
26
C. Daniel Ewell, Rule 10B-5 and the Duty to Disclosure
Merger Negotiations in Corporate Statements, 96 Yale L.J.
547,547 (1987), The U.S Congress relied on this rationale in
adopting the federal securities laws in 1934, Susanna Kim
Ripken, The Dangers and Drawbacks of the Disclosure An-
tidote: Toward a More Substantive Approach to Securities
Regulation, 58 Baylor L. Rev. 139, n.43 (2006).
27
Goldring, supra note 20, at 1527-29 (1981).
28
See Michelle N. Comeau, The Hidden Contradiction With-
in Insider Trading Regulation, 53 UCLA L. Rev. 1275, 1295
(2006).
29
Id. at 1296.
30
James O. Hewitt, Developing Concepts of Materiality and
Disclosure, 32 vol. (3) Bus. Law. 887, 891(1977).
31
Fredrick C. Dunbar and Dana Heller, Fraud on the Market
Meets Behavior Finance, 31 Del. J. Corp. L. 455, 468 (2006)
(stating that changes in material information should cause
material changes in the price of a security).
32
Ripken, supra note 26, at 154 (2006).
23
Before Creating a Law
trade at maximum efficacy.33 This overall
appearance of price efficiency encourages
the ordinary non-sophisticated investor
to participate in the market as a method
to advance their wealth and as a result
serves to benefit the overall market.34
At the logical conclusion, “ensuring
full transparency would ensure that prices
are accurate” by mandating the disclosure
of all price altering information to utilizing
investors. 35 Material information at
optimum distribution would “even
uninformed investors buying a diversified
portfolio at the tableau of prices given by
the market will obtain a rate of return as
generous as that achieved by [investment]
experts.”36 These disclosures act to level
the playing field by preventing the more
connected investors from receiving an
unfair advantage by acquiring insider
information as a result of relationships with
corporate managers.37 The disclosures of
material information have been interpreted
to prevent corporate managers and
insiders from reaping abnormally high
profits by trading on confidential, “inside”
information.38
Since the average investor operates
based on feelings of market confidence
rather than a high level investment IQ
an erosion of that confidence can be
costly.39 This negative perception of
the market results in these investors
33 Ripken, supra note 26, at 153, n.43 (2006) (The U.S
Securities Exchange Commission has stated this idea of
disclosure in a 1972 report).
34 Charles R. Korsmo, The Audience for Corporate Disclo-
sure, 102 Iowa L. Rev. 1581, 1614 (2017).
35 Austin, supra note 5, at 238.
36 Fredrick C. Dunbar and Dana Heller, Fraud on the Mar-
ket Meets Behavior Finance, 31 Del. J. Corp. L. 455, 472
(2006).
37 Aleta G. Estreicher, Securities Regulation and the First
Amendment, 24 Ga. L. Rev. 223, 291 (1990).
38 Identifying the role of the Landmark U.S case Texas Gulf
Sulphur in 1968 for stating this concept and stating that “[i]
t must be recognized that corporate insiders generally pos-
sess or develop superior intuition about their own and other
companies based on frequent business contact”, Goldring,
supra note 20, at 1530-32 (1981).
39 James Harlan Koenig, The Basics of Disclosure: The
Market for Information in the Market for Corporate Control,
43 U. Miami L. Rev. 1021, 1058 (1989).
LAW REVIEW
“withdraw[ing] their capital from the
market when they fear they may be
exploited by better-informed traders.”40
What results is undercapitalization of
the market, as moderate level investors
refuse to participate in a market in which
they have no confidence in their ability
to produce profitable investments. In
the end the “mandatory reporting of
insider trading activity, by regulating the
release of relevant information [on which
insider trades are based], furthers the
macroeconomic ideal of efficiency.”41
B. ACCOUNTABILITY OF
CORPORATE ACTORS.
Effective corporate disclosure can
act as a force that reveals corporate
actions to the public and holds corporate
actors accountable for governance
decisions. Early legal scholars in the
1900’s saw disclosure as a means
“to change the attitudes of corporate
managers, bankers and other insiders.”42
As United States Supreme Court Justice
Louis Brandeis stated, “[p]ublicity is justly
commended as a remedy for social and
industrial diseases. Sunlight is said to be
the best of disinfectants; electric light the
most efficient policeman.”43 Corporate
actors are less prone to misconduct and
fraudulent actions when faced with the
threat of those actions becoming public
knowledge.44 Public disclosures would
force corporate actors to “exercise their
power with a greater sense of fiduciary
obligation, both toward shareholders and
toward the public.”45 As a result corporate
actors will seek to “better manage the
40
Id.
41
Comeau, supra note 28, at 1295-96.
42
Cynthia A. Williams, The Securities and Exchange
Commission and Corporate Social Transparency, 112 Harv.
L. Rev. 1197, 1211 (1999).
43
Patricia Romano, Sustainable Development: A Strategy
that Reflects the Effects of Globalization on the Internation-
al Power Structure, 23 Hous. J. Int’l L. 91, 109 (2000).
44
Ripken, supra note 26, at 153, n.43 (2006) (The U.S
Securities Exchange Commission has stated this idea of
disclosure in a 1972 report).
45
Williams, supra note 42, at 1212.
24
2017 5(65)
areas of corporate life, which they will
later be forced to reveal” to the general
public.46
Additionally, these early corporate
reformers saw disclosure as a means
to disrupt the forces of concentrated
market power within a small group of
U.S. banking and lending institutions.47
This concentrated power they argued
transformed from simply market
institutions to forces that had huge socio-
economic ramifications. They stated that
power in the hands of a few corporate
actors “is a tremendous force which can
harm or benefit a multitude of individuals,
affect whole districts, shift the currents
of trade, bring ruin to one community
and prosperity for the other.”48 Mandated
public disclosure works as a means to
hold these powerful actors accountable
for the actions taken in their corporate
capacity that may have far reaching social
and economic consequences. Disclosures
serve to discourage unethical behavior and
makes clear to the public and regulators
that corporate insiders are participating in
corrupt tactics that may affect the social
economic climate.49 This serves to shed
light on those who participate in corrupt
or unethical behaviors and makes the
general public aware of these actions. As
a result, government regulators can move
to sanction that conduct behind a force of
public pressure and discourage behavior
that negatively affects the efficiency of
price estimates.50 Disclosure can act as
a force against corruption by shining a
spotlight on those practices and allowing
regulators to sanction those responsible
and mandate efficient changes in
corporate behaviors.
46
Barnali Choudhury, Social Disclosure, 13 Berkeley Bus.
L.J. 183, 188 (2016).
47
Williams, supra note 42, at 1213.
48
Id. at 1216
49
See Id. at 1221 (discussing public accountability as a
goal of early disclosure legislation).
50
Brandon Kraft and Dennis Bougusz, Disclosure Created
Accountability: An Analysis of the National Environmental
Policy Act and the Dodd-Frank Wall Street Reform and
Consumer Protection Act, 13 Geo. J. L. & Pub. Pol’y 447,
453 (2015).

C. WHAT DOES EFFECTIVE
DISCLOSURE ACCOMPLISH IN THE
MARKET?
For these reasons, effective
corporate disclosure achieves both
efficient and utilitarian ends.51 The
process of effective disclosure in effect
works to provide investors with more
“perfect information” to make rational
choices in the market to avoid the cost
of negative externalities from having an
effect on their own wealth maximization.52
This perfect information is often “perfect”
because all the information that could
affect the price of the security is accurately
incorporated into the price. Availability of
perfect information will allow for a market
to develop into a “perfectly competitive
market” where individuals rationally make
investment choices to “maximize their
own utility.”53 These decisions can achieve
perfect market efficacy and maximization
if they are based on perfect information.
In essence, disclosure of relevant price
changing information to investors within
this market is a necessary precursor to
wealth maximization by attempting to
provide perfect information to market
participants.54 The closer a market gets
to having perfect market efficiency, the
more that the market will see trends
of economic growth and high levels of
market capitalization.
III. THE REALITY OF MONGOLIA’S
CORPORATE DISCLOSURE
Corporate disclosure in Mongolia
is still in “its infancy.” 55 As disclosure is
an element of corporate governance
generally, I will identify the general
framework in Mongolia that covers
corporate governance and disclosure.
51
Austin, Supra note 5, at 236
52
Kraft & Bougusz, supra note 50, at 456.
53
Id.
54
Id.
55
OECD, Anti-Corruption Reforms in Mongolia: Assess-
ment and Recommendations Report, 66 (2014), http://www.
oecd.org/corruption/anti-bribery/MONGOLIA-MonitoringRe-
port-EN.pdf.
25
Before Creating a Law
The following section presents information
regarding the disclosure of financial
information and non-financial information
while also addressing briefly the issue of
enforcing the established guidelines.
A. MONGOLIAN FRAMEWORK
Mongolia is an emerging economy
in which legal corporate governance
standards are still evolving.56 Mongolia
has established some institutions and legal
framework for corporate governance, but
these institutions are relatively young.57
The Financial Regulatory Commission
of Mongolia (FRC) adopted a Corporate
Governance Code of Mongolia (CGCM)
in 2007, which was revised in 2014.58 The
CGCM establishes a binding/mandatory
corporate compliance for publicly traded
companies.59 This corporate compliance
standard requires that companies make
the type of disclosures that are required
by law or face some sort of sanction or
penalty.60
In addition to these guidelines, the
primary sources of legislation that provide
the framework for Mongolian corporate
governance and disclosures are the:
Accounting Law (AL); Company Law (CL);
the Banking Law (BL); and the Securities
Market Law (SML).61 It is important to
note that the Securities Market Law that
56
Mongolia Economic Policy Reform and Competitiveness
Project (EPRC), Mongolia Corporate Governance Review,
i (2008), http://governance.mn/upload/files/2016/12/19/47b-
6d9c0baf2dc35b4b14168e6b97add.pdf [hereinafter EPRC
Project].
57
Id.
58
Id.
59
Binding for main board listed companies, Comply and
Explain for all other listed companies and Voluntary for all
other companies (public or private), OECD Survey of Cor-
porate Governance Frameworks in Asia, OECD, 14 (2017).
60
For a Well Written Article discussing Mandatory Disclo-
sure and the Adoption of these Principles in Detail, See Al-
len Ferrell, The Case for Mandatory Disclosure in Securities
Regulation around the World, 2 Brook. J. Corp. Fin. & Com.
L. 81 (2007).
61
Corporate Governance in Transition Economies: Mongo-
lia Country Report, European Bank for Reconstruction and
Development, 5 (Jun. 2016), www.ebrd.com/documents/
ogc/mongolia.pdf, [hereinafter EBRD Corporate Gover-
nance]
LAW REVIEW
took effect in 2014 introduced many
new corporate reforms including some
new disclosure standards.62 In order
to strengthen corporate governance,
the Economic Policy Committee of the
Mongolian Parliament commissioned
the Corporate Governance ROSC
Assessment, which compares the
framework of Mongolian corporate
governance with the standards established
by the OECD principles in multiple areas
including corporate disclosures.63
B. FINANCIAL INFORMATION
The legal framework of Mongolia
“requires all companies to prepare
a complete set of audited financial
statements based on IFRS [International
Financial Reporting Standards]”. —
balance sheet, income statement, cash
flow statement, statement of changes
in equity, and notes to the financial
statements—on a quarterly, semi-annual,
and annual basis.”64 Even though this
legal framework is established, in 2007
78.9% of companies failed to provide
these required statements to the FRC.65
Additionally in that year, the FRC
estimates that zero companies made
these records publicly available.66 In 2016,
the European Bank for Reconstruction
and Development (EBRD) report
indicates that only one company in their
62
Mongolia Adopts An Amended Securities Market Law,
Hogan Lovells (2013), http://www.hoganlovells.com/files/
Uploads/Documents/Mongolia%20Newsflash__Mongo-
lia_Adopts_An_Amended_Securities_Market_Law_HK-
GLIB01_1047439.pdf.
63
Report on the Observance of the Standards and Codes
(ROSC): Corporate Governance Country Assessment Mon-
golia, The World Bank (2009), http://documents.worldbank.
org/curated/en/759521468274236843/pdf/625960WP-
0P114800Box0361486B0PUBLIC0.pdf, [hereinafter ROSC
Report].
64
Id. at 18 (Art. 10.4 AL, FRC Resolution No. 206) to the
FRC and Mongolia Stock Exchange, but to shareholders
only annually (Art. 91.1 CL, Art. 10.1.3 SML, Art. 94.1. AL
and Art. 7.1.1 Auditing Law)).
65
FRC 2007 Annual Report, as well as comments made
by the Chairman of the FRC, http://siteresources.world-
bank.org/INTMONGOLIA/Resources/BayarsaikhanDarga-
SpeechEng.pdf.
66
Id.
26
2017 5(65)
sample “clearly prepares its financial
statements in line with IFRS. The other
“companies seem to disclose only their
balance sheets online and as a result an
independent report could not verify the
compliance of sampled companies.”67
Such filings are clearly insufficient, as the
Company Law of Mongolia requires that
financial statements of a company also
include “a statement of profit and loss;
a statement of cash flow; a statement of
retained earnings; a list of all conflict-of-
interest transactions concluded during
the relevant period reflected in the report,
with a description of the type of each such
transaction and the amount of money
involved; appropriate explanatory notes;
and such other information as may be
required by law”.68 The Organization for
Economic Co-operation and Development
has stated that the Law [in Mongolia]
generally prohibits misconduct, [but] it
does not provide for explicit prohibition
and sanctions for business entities
for the establishment of off-the-books
accounts; the making of off-the-books or
inadequately identified transactions; the
recording of non-existent expenditures;
the entry of liabilities with incorrect
identification of their object; the use of
false documents.69
C. NON-FINANCIAL INFORMATION
The current regulatory and legal
framework in Mongolia does not currently
require or encourage the disclosure of non-
financial information to the public.70 Such
information includes “company objectives,
beneficial ownership structures,
remuneration policies for executive, non-
executive board members, and corporate
governance policies,” as well as status
of ownership, director qualifications
67
EBRD Corporate Governance, supra note 61, at 10.
68
Company Law of Mongolia, 97.1.1 - 97.1.7.
69
OECD, Anti-Corruption Reforms in Mongolia: Assess-
ment and Recommendations Report, 66 (2014), http://
www.oecd.org/corruption/anti-bribery/MONGOLIA-Monitor-
ingReport-EN.pdf.
70
EBRD Corporate Governance, supra note 61, at 10.

and employee gender statistics. 71 The
European Bank for Reconstruction
and Development reports that public
disclosure of non-financial information
is limited or nonexistent. In addition, the
availability of non-financial information on
the Internet from the ten largest companies
in Mongolia is “particularly limited.”72 With
regards to the general public, the EBRD
reported “no company supplies any
information on their board and committee
activities, transactions with company’s
shares by directors or their compliance
with the Corporate Governance Code.”73
With what little information that companies
disclosed, market participants report that
only 80% of companies created reports
comparable to those found in OECD
Member countries.74 Within the legal
framework, companies are only required
to register their articles of incorporation
with the state registrar but not to disclose
them to the general public.75 Only one
of the corporations in European Bank
sample discloses this information.76
Article 94.3 of the Mongolian CL
requires an annual report from the
board to shareholders that states the
“company’s activities, results, changes in
such activities and results from previous
years, and the company’s structure, and
organization.”77 In addition, “unless an
investor purchases 5% or more of a given
stock, access to information regarding the
owners of the company is not allowed at
the Mongolian Stock Exchange (MSE)
nor at the Securities Clearing House and
Central Depository.”78
71
ROSC Report, supra note 63, at 18.
72
EBRD Corporate Governance, supra note 61, at 10.
73
EBRD Corporate Governance, supra note 61, at 5.
74
ROSC Report, supra note 63, at 18.
75
EBRD Corporate Governance, supra note 61, at 10.
76
Id.
77
ROSC Report, supra note 63, at 18.
78
EPRC Project, supra note 56, at 21
27
Before Creating a Law
D. ENFORCEMENT OF CURRENT
GUIDELINES AND LAWS
Enforcement of these laws is not as
strong as it should be, and the International
Finance Corporation has advocated for
reform in the area of “enforcement of legal
and regulatory requirements” governed by
the Corporate Governance Code and other
regulatory areas. 79 Within a mandatory
disclosure regime it is necessary that
the standards be enforced or the result
is that the “mandatory” nature of the
regime is simply stripped away. The laws
in Mongolia calls for general sanctions if
disclosure requirements are not met but
does not enforce a strict monetary penalty
or criminal sanctions as other countries
in Asia have adopted.80 For Example:
Hong Kong, China; Malaysia; Singapore;
and Thailand the failure to meet statutory
disclosure obligations can lead to large
fines and imprisonment.81 Studies have
indicated that the more demanding a
corporate disclosure regime is the more
it will be correlated with higher levels of
financial development.82
IV. RESULTS OF CORPORATE
DISCLOSURE ISSUES WITHIN
MONGOLIA
The insight into the recent events in
Mongolia’s corporate disclosure regime
provide some insight into the recent
changes and issues that are present in
Mongolia business environment. The
amended securities law that took effect
in 2014 has made progress in certain
areas but still requires some areas of
79
OECD, Anti-Corruption Reforms in Mongolia: Assess-
ment and Recommendations Report, 66 (2014), http://www.
oecd.org/corruption/anti-bribery/MONGOLIA-MonitoringRe-
port-EN.pdf.
80
Disclosure of Beneficial Ownership and Control in Listed
Companies in Asia, OECD, 33 (2016) https://www.oecd.org/
daf/ca/Disclosure-Beneficial-Ownership.pdf
81
Disclosure of Beneficial Ownership and Control in Listed
Companies in Asia, OECD, 33 (2016) https://www.oecd.org/
daf/ca/Disclosure-Beneficial-Ownership.pdf
82
Allen Ferrell, The Case for Mandatory Disclosure in Se-
curities Regulation around the World, 2 Brook. J. Corp. Fin.
& Com. L. 81 (2007).
LAW REVIEW
needed reform in the area of corporate
disclosures. As shown, effective disclosure
works to keep securities prices accurate,
market confidence high, and to maintain
corporate accountability. By doing so it
promotes investment into the market by
those confident in its ability to perform
and keep those in corporate positions of
power accountable for their actions. As a
result, a decline in investment as well as
increase corporate corruption perceptions
may be linked securities disclosure
struggles. Most likely the problems within
the corporate disclosure regime are not
the sole cause of both investment and
corruption issues but with the effects
that disclosure has upon investor market
confidence and corporate accountability, it
would be prudent to suggest a link between
them. To illustrate these problems, this
section will highlight the recent downward
trend in foreign investment in Mongolia as
well as show the high level of perceptions
by the public surrounding corruption within
corporate and government institutions.
A. DECLINE OF PARTICIPATION
BY FOREIGN INVESTORS.
The United Nations Investment Policy
review has indicated that shareholders
within the country stated, “new investors
will not [be] establish[ed] until the
transparency of the investment climate
and therefore the security of investments
are improved.”83 Foreign Investment
as a total has been on the decline. For
example, American investment has been
declining at a drastic rate. In 2012, the
Foreign Direct Investment (FDI) was at
3.9 Billion.84 By half way through 2014,
this number had dropped to 402.3 million,
a 64% year on year decline.85 The U.S.
83
Investment Policy Review: Mongolia, United Nations
Conference on Trade and Development, 52 (2013) http://
unctad.org/en/PublicationsLibrary/diaepcb2013d3_en.pdf
[hereinafter UN Investment Policy Review].
84
Executive Summary Mongolia, United States Depart-
ment of State, 1 https://www.state.gov/documents/organi-
zation/231251.pdf
85
Id.
28
2017 5(65)
State Department in their investment
climate report has indicated that foreign
and domestic investors conclude that
currently the Mongolian government does
not use transparent laws and regulations
to create market fairness for either
foreign or domestic competitors and that
regulations “are sometimes but not always
consistent with international norms and
best practices.”86 An improvement of
disclosure practices that are in line with
international norms may improve foreign
investor confidence in the Mongolian
marketplace and return some of the
declining foreign investment.
B. BUSINESS AND FINANCIAL
INTUITIONS ARE GENERALLY SEEN
AS CORRUPT BY THE MONGOLIAN
GENERAL PUBLIC
The United Nations in their investment
report list have noted that these regulatory
struggles are “represented by high levels
of corruption, are endemic and represent
a major barrier to progress in Mongolia.
“87 To illustrate this problem, in 2016 The
Asia Foundation surveyed the Mongolian
population regarding the perceptions of
corruption within the country in certain
institutions. This survey found that on a
scale of 1 (not affected by corruption) to
4 (extremely affected by corruption), the
influence of corruption on business life
was a 2.97 as of March 2016.88 In the
area of banking and finance, this figure
was found was a 2.51.89 Additionally, 46%
of those sampled stated they found the
banking and finance industry to be at least
moderately corrupt.90
Another major issue found in the
study was the issue with grand corruption.
86
2016 Investment Climate Statements, U.S. Department
of State: Bureau of Economic and Business Affairs (July
5, 2016), https://www.state.gov/e/eb/rls/othr/ics/2016/
eap/254299.htm.
87
UN Investment Policy Review, supra note 83, at 3.
88
Survey on Knowledge and Perceptions of Corruption
(SPEAK), Asia Foundation, 28 (2016).
89
Id. at 29.
90
Id. at 64.

Grand corruption is defined as cases
that involved large bribes, dominant
businesses, strong political interest or high
level public officials. This grand corruption
poses an issue because “grand corruption
by high level officials is mirrored in ‘petty’
corruption by low level officials . . . [in]
both the public and private sectors.”91
41% of Mongolian’s stated that there
is a significant amount of grand corruption
in Mongolia.92 When asked why grand
corruption exists in Mongolia, 28.2% of
Mongolians cite the corrupt practices of
large Foreign or Mongolian businesses.93
16.7% stated that grand corruption exists
because of the lack of development of the
Mongolian legal system and its inability to
deal with corruption issues.94 In reference
to securities, 26.8% of respondents found
that grand corruption bribes usually take
the form of corporate partnership or stock
in a company. 95 To combat corruption,
37.4% found the best method was to
modify anti-corruption legislation. 96 This
data illustrates that the Mongolian public
view their business institutions as areas
that are affected in some way by corrupt
practices. The government of Mongolia
has taken many important strides toward
eradicating corruption but it may be
possible that reforming the disclosure
regime may help to shine light on those
current corrupt business practices. It also
indicates that the people are aware of and
interested in seeking out modes of reform
for these business corruption problems.
V. SUGGESTIONS FOR REFORM
Now that the basics of securities
disclosure are outlined and the problems/
91
Duane Windsor and Kathleen A. Getz, Multilateral Coop-
eration to Combat Corruption: Normative Regimes Despite
Mixed Motives Motives and Diverse Values, 33 Cornell Int’l
L. J. 731, 757 (2000).
92
Survey on Knowledge and Perceptions of Corruption
(SPEAK), supra note 88, at 65.
93
Id.
94
Id.
95
Id. at 68.
96
Id. at 71.
29
Before Creating a Law
results of those problems presented,
this section will seek to present a few
questions for thought and articulate a
few ideas for reform within the Mongolia
disclosure regime. These ideas will
hopefully spark continued academic
and legislative interest into developing
a strong solution tailored to the growing
needs of Mongolia’s economy. Here are
some suggestions:
1. Develop Harsh Penalties upon
Companies that Fail to Meet Disclosure
Requirements such as Large Fines and
Criminal Charges.
2. Develop Non-Financial Reporting
Standards in line with the Global Reporting
Initiative (Example: Disclosing anti-
corruption efforts taken by the business
entity).97 Another Example of this would
be the required disclosure of beneficial
ownership to the public and not just state
regulators.98
3. Develop public web-based
disclosure requirements. (Example:
Posting financial and Non-Financial
company reports on the company website
for widespread public access).
4. Continue to Develop Financial
Reporting Requirements to meet
international financial reporting standards
(IFRS).
5. Provide state or privately
funded education classes for citizens
on Investment methods and provide a
detailed understanding of the securities
market (This will serve to stimulate
domestic investment in the market by
average citizens – the data shows that
citizen investors are lacking in this basic
knowledge99).
97
See David Hess, Combating Corruption through Cor-
porate Transparency: Using Enforcement Discretion to Im-
prove Disclosure, 21 Minn. J. Int’l L. 42 (2013).
98
See Disclosure of Beneficial Ownership and Control in
Listed Companies in Asia, OECD, 25 (2016) https://www.
oecd.org/daf/ca/Disclosure-Beneficial-Ownership.pdf (for
more information regarding beneficial ownership and Mon-
golia’s regulatory framework regarding this type of disclo-
sure).
99
Individuals lack knowledge on stock market, FRC (2017)
http://www.frc.mn/en/news/1217.
LAW REVIEW 2017 5(65)

6. Educate business managers These are just some basic

and corporations on disclosure Practices
that are used by international companies
around the world and study the efficiency
of these practices by developing an
effective model for Mongolia
7. Develop an extensive government
report to show foreign investors the
steps being taken by the Government
to Promote and Enforce Disclosure
Requirements upon companies that
operate in Mongolia (especially those that
trade on the Mongolian Stock Exchange).
8. Enter into Memorandums
of Understanding with a Majority of
Regulatory bodies in Europe and the
United States (SEC) to give foreign
investors more confidence in the
Governments commitment to promoting
investors interests. (The Financial
Regulatory Commission is taking active
steps to seek MOU’s with European
nations.100)
9. Strengthen the laws concerning
state owned enterprises and force
their compliance with OECD Corporate
Governance Guidelines and codify
International Best Practices into Mongolian
Law.101
100
http://www.frc.mn/en/news/1226.
101
2016 Investment Climate Statements, U.S. Department
of State: Bureau of Economic and Business Affairs, 22
(July 5, 2016), https://www.state.gov/e/eb/rls/othr/ics/2016/
eap/254299.htm.
suggestions and by no means are a
comprehensive list. They simply serve
as a list of suggestions for continued
research.
VI. CONCLUSION
This article has provided a very
general and basic introduction into the
world of securities disclosure. To sum up
it all up, disclosure serves as a method
in which investors are protected by both
having the confidence to invest in price
accurate securities and also are served
with a protective barrier against those
within the corporate environment who seek
to exploit their knowledge for improved
gain. With a lack of mandate disclosure
or reduced enforcement, investors lack
the confidence to invest in a market that
seems entirely unfair to their interests.
In the end, these investors will not invest
in the market and ultimately view the
practices of that market as not adequate
to their interest or in the extreme as being
built on corrupt business practices. This
is a problem that affects the entirety of
the market and in the end has a direct
effect on national economic growth. By
presenting this situation in Mongolia,
this article hopes to spark improving
disclosure reforms and invigorate interest
surrounding the need for effective
disclosures to decrease corruption and
increase of efficient investments.

---o0o---

30

A LEGAL ANALYSIS ON ARTICLE XXIV OF THE GATT
FROM THE PERSPECTIVE OF NON-APPLICATION OF
THE WTO SAFEGUARD MEASURES TO MEMBERS OF
REGIONAL TRADE AGREEMENTS
Tuulaikhuu Enkhee, LL.M,
Lecturer in International Law, School of Law,
National University of Mongolia,
KEY WORDS
multilateral trading system, non-
discrimination rule, safeguard measures,
regional trade agreements, and internal
trade requirement
ABSTRACT
The debate about whether Article
XXIV of the General Agreement on Tariff
and Trade (GATT) can justify a violation
of the non-discrimination rule, which is the
exclusion of members of Regional Trade
Agreement (RTA) from the application
of safeguard measures, in Article 2.2
of the WTO Agreement on Safeguards
(the Safeguard Agreement), arises from
the compliance with legal requirements
in Article XXIV, which require WTO
members who form an RTA to eliminate
trade restrictions between them. Article
XXIV can be a defense to some other
WTO violations. However, the issue of
whether Article XXIV can be a defense to
the exclusion of RTA members from the
31
Before Creating a Law
application of safeguard measure has
raised among WTO Members since WTO
Argentina — Footwear case in 1999, and
this issue has not been definitely resolved in
existing WTO dispute settlement practice.
This thesis analyzes whether Article XXIV
of the GATT can be a justification for the
non-application of safeguard measures to
RTA members by examining the relevant
WTO case law. Consequently, the thesis
argues that Article XXIV can be a defense
to a violation of Article 2.2 of the Safeguard
Agreement.
INTRODUCTION
The elimination of discriminatory
treatment in international trade relations
is one of the core objectives of the
multilateral trading system.1 In order
to secure this objective, the General
Agreement on Tariff and Trade (GATT) and
some other WTO agreements contain the
rule which prohibits WTO Members from
discriminating among like products of other
WTO Members.2 The WTO Agreement on
Safeguards (the Safeguard Agreement)
also provides for non-discriminatory
treatment of like products among WTO
Members to apply safeguard measures.3
1
The Preambles of the Marrakesh Agreement Establishing
the World Trade Organization and of the GATT 1994.
2
In the field of trade in goods, one of the most important
non-discrimination rules is specified in Article I:1 of the
GATT. Pursuant to Article I:1, a WTO Member must immedi-
ately and unconditionally extend any advantage, favor, priv-
ilege or immunity, which has been granted to any product
originating in, or destined for any other country (regardless
of whether it is a WTO Member), to the like products origi-
nating in, or destined for all other WTO Members.
3
The safeguard measure is a trade remedy which a WTO
Member may take in a situation where increased imports
cause or threaten to cause serious injury to domestic indus-
try which produces “like or directly competitive products”.
LAW REVIEW
The Safeguard Agreement, Article 2.2,
states that safeguard measures must
be applied to a product being imported
“regardless of its source”.
On the other hand, Article XXIV of
the GATT regulates matters concerning a
Regional Trade Agreement (RTA)4, which
permits to accord preferential treatments
to its members only. According to Article
XXIV:4, an RTA should have two main
purposes: to facilitate trade between the
WTO Members which are parties to the
RTA (RTA members), and not to raise
barriers to the trade of other WTO Members
which are not parties to the RTA (non-RTA
members). Article XXIV:8(a)(i) and (b)
provide the internal trade requirements
for the elimination of barriers between
the RTA members5. Article XXIV:5 sets
external trade requirements for not raising
barriers to non-RTA members.6 More
importantly, in relation to internal trade
requirements in Article XXIV:8, the issue
of which restrictions should be removed or
maintained between RTA members may
4
In this context, the term “RTA” refers to trade agreements
to establish customs union (CU) and free trade area (FTA)
under Article XXIV of the GATT.
5
Article XXIV:8 (a) A customs union shall be understood to
mean the substitution of a single customs territory for two or
more customs territories, so that (i) duties and other restric-
tive regulations (except, where necessary, those permitted
under Articles XI, XII, XIII, XIV, XV and XX) are eliminat-
ed with respect to substantially all the trade between the
constituent territories of the union or at least with respect
to substantially all the trade in products originating in such
territories, and, (b) A free-trade area shall be understood to
mean a group of two or more customs territories in which
the duties and other restrictive regulations of commerce (ex-
cept, where necessary, those permitted under Articles XI,
XII, XIII, XIV, XV and XX) are eliminated on substantially
all the trade between the constituent territories in products
originating in such territories.
6
Article XXIV:5 (a) with respect to a customs union …the
duties and other regulations of commerce imposed at the
institution of any such union … in respect of trade with con-
tracting parties not parties to such union … shall not on the
whole be higher or more restrictive than the general inci-
dence of the duties and regulations of commerce applicable
in the constituent territories prior to the formation of such
union…; (b) with respect to a free-trade area … the duties
and other regulations of commerce maintained in each if the
constituent territories and applicable at the formation of such
free-trade area … to the trade of contracting parties not in-
cluded in such area…shall not be higher or more restrictive
than the corresponding duties and other regulations of com-
merce existing in the same constituent territories prior to the
formation of the free-trade area…
32
2017 5(65)
be problematic.
This article aims to examine Article
XXIV of the GATT from the perspective
of the non-application of safeguard
measures to RTA members. The first part
describes a potential conflict between the
non-discriminatory rule in the Safeguard
Agreement and Article XXIV of the GATT.
The second part analyses the applicability
of Article XXIV on exclusion of RTA
members from the safeguard measures
under the WTO Appellate Body test for
Article XXIV defense. Finally, it summaries
key findings in previous parts.
1.A Potential Conflict between
Article XXIV of the GATT and Article 2.2
of the Safeguard Agreement
During the period of the GATT
1947, the question of non-discriminatory
application of safeguard measures was
discussed because there is no provision
in the GATT which explicitly prohibits
selective applications.7 Some scholars
explained the nature of safeguard
measures in Article XIX are on the basis
of its discriminatory practices.8 The
Safeguard Agreement, which was adopted
as a result of the Uruguay Round, contains
the provision on non-discriminatory
application of safeguard measures.
Article 2.2 of the Safeguard Agreement
prohibits any origin-based discrimination
of the imported product which is subject
to safeguard measures. In this sense,
excluding products of certain origins from
safeguard application violates Article 2.2.
Today, all WTO Members are parties
to at least one RTA.9 Moreover, a number
7
Yong-Shik Lee, Safeguard Measures in World Trade: A Le-
gal Analysis (Cheltenham: Edward Elgar, 2014), 31
8
M.C.E.J. Bronckers, Selective Safeguard Measures in
Multilateral Trade Relations: Issues of Protectionism in the
GATT, European Community and United States Law (The
Hague: T.M.C. Asser Institute, 1985), 12-30
9
Mongolia has been the last WTO that has concluded an
RTA. In 2016, RTA between Mongolia and Japan was con-
cluded in 2016. Before then, Mongolia had been the only
WTO member that was not a party to an RTA. The data is
available at https://www.wto.org/english/news_e/news16_e/
rta_02jun16_e.htm (last visited on 18 Dec 2017).

of RTAs contain provisions for excluding
RTA members from WTO safeguard
measures with certain conditions or not.10
The common conditions that imports from
RTA members can be excluded from
safeguard measures under Article XIX of
the GATT and the Safeguard Agreement
are: 1) those imports do not constitute a
substantial share of the total imports, and 2)
those imports do not contribute to serious
injury that causes or threaten to cause
to the domestic industry.11 For example,
Article 802.1 of the North American Free
Trade Agreement (NAFTA) provides for
such conditions.12 There are also some
RTAs which exclude their members from
the application of safeguard measures
without any conditions.13 For example,
Article 9 of the Singapore-Australia Free
Trade Agreement (SAFTA) provides:
A Party shall not initiate or take any
safeguard measure within the meaning
of the WTO Agreement on Safeguards
against the goods of the other Party [...].14
Hence, RTA provisions of excluding
RTA members from the application of
safeguard measures may give rise to the
problem of how to reconcile them with the
non-discrimination principle under WTO
safeguard rules.
10
Over 60 RTAs that have been notified to WTO provide
that imports of RTA members shall or may be excluded from
safeguard measures with certain conditions or not. The de-
tailed data is in Rohini Acharya (ed.), Regional Trade Agree-
ments and the Multilateral Trading System (Cambridge:
Cambridge University Press, 2016), 230-291.
11
WTO, “The WTO and Preferential Trade Agreements:
From Co-existence to Coherence”, 2011, 181. The report
is available at https://www.wto.org/english/res_e/booksp_e/
anrep_e/world_trade_report11_e.pdf/.
12
See NAFTA, Chapter Eight - Emergency Action, avail-
able at https://www.nafta-sec-alena.org/Home/Texts-of-the-
Agreement/North-American-Free-Trade-Agreement?m-
vid=2 (last visited on 26 June 2017).
13
For example, New-Zealand-Singapore FTA, Singa-
pore-Australia FTA and EFTA-Hong Kong FTA have such
provisions. See Jo-Ann Crawford, Jo Mckeagg and Julia
Tolstova, “Mapping of Safeguard Provisions in Regional
Trade Agreements”, in Rohini Acharya (ed.), Regional Trade
Agreements and the Multilateral Trading System (Cam-
bridge: Cambridge University Press, 2016), 230-291.
14
SAFTA, Chapter 2 – Trade in Goods, available at http://
dfat.gov.au/trade/agreements/safta/official-documents/
Documents/SAFTA-chapter-02.pdf (last visited on 26 June
2017). The SAFTA was signed on 17 February 2003 and
entered into force on 28 July 2003.
33
Before Creating a Law
Among WTO members, disputes,
such as Argentina — Footwear15, US —
Wheat Gluten16, US — Line Pipe17 and US
— Steel Safeguard18, have arisen about
whether a WTO Member can exclude
its RTA member(s) from the application
of safeguard measures under Article
XXIV of the GATT. In these cases, the
respondents, which were parties to an RTA
that excludes RTA imports from safeguard
measures19, tried to defend their RTA
conditions by claiming that Article XXIV
prohibits the imposition of safeguard
measures between RTA members. The
WTO Appellate Body has not yet settled
the issue about whether Article XXIV of
the GATT can justify violations of the non-
discriminatory rule in Article 2.2 of the
Safeguard Agreement.
Such RTA provisions originates
from the texts of Article XXIV:8 (a)(i)
and (b) of the GATT, which require RTA
members to eliminate trade restrictions
15
Panel Report, Argentina — Safeguard Measures on Im-
ports of Footwear (Argentina — Footwear), WT/DS121/R,
adopted on 25 June 1999; Appellate Body Report, Argentina
— Safeguard Measures on Imports of Footwear (Argentina
— Footwear), WT/DS121/AB/R, adopted on 14 December
1999
16
Panel Report, United States — Definitive Safeguard
Measures on Imports of Wheat Gluten from the European
Communities (US — Wheat Gluten), WT/DS166/R, adopted
on 31 July 2000; Appellate Body Report, United States —
Definitive Safeguard Measures on Imports of Wheat Gluten
from the European Communities (US — Wheat Gluten),
WT/DS166/AB/R, adopted on 22 December 2000
17
Panel Report, United States — Definitive Safeguard Mea-
sures on Imports of Circular Welded Carbon Quality Line
Pipe from Korea (US — Line Pipe), WT/DS202/R, adopted
on 29 October 2001; Appellate Body Report, United States
— Definitive Safeguard Measures on Imports of Circular
Welded Carbon Quality Line Pipe (US — Line Pipe), WT/
DS202/AB/R, adopted on 15 February 2002
18
Appellate Body Report, United States — Definitive Safe-
guard Measures on Imports of Certain Steel Products (US
— Steel Safeguard), WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/
DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R, adopted
on 10 November 2003
19
Argentina — Footwear: MERCOSUR includes the provi-
sion for excluding its members from WTO safeguard mea-
sure; and US — Wheat Gluten, US — Line Pipe, and US
— Steel Safeguard: The US is a NAFTA (North American
Free Trade Agreement) member; the NAFTA includes the
provisions that imports from RTA members shall be exclud-
ed from WTO safeguard measure (Article 802.1), US-Jor-
dan FTA (Article 10), and US-Israel FTA (Article 5.3) include
provisions that may exclude RTA members from WTO safe-
guard measure.
LAW REVIEW
(including safeguard measures) between
them. Therefore, in the WTO scene, the
debate about whether a WTO Member
can exclude its RTA member(s) from
the application of safeguard measures
under Article XXIV of the GATT arises
regardless of whether RTAs contain such
provisions. Consequently, the exclusion
of RTA members from the application of
safeguard measures is controversial as
a matter of potential conflict between the
non-discriminatory treatment under the
Safeguard Agreement and Article XXIV
of the GATT. The second part analyzes
whether Article XXIV can provide a legal
justification for the violation of the non-
discrimination rule in Article 2.2 of the
Safeguard Agreement.
2. Applicability of Article XXIV de-
fense to violation of Article 2.2 in the
Safeguard Agreement
As Pauwelyn argues, Article XXIV
of the GATT can provide a justification for
a violation of Article 2.2 of the Safeguard
Agreement because the latter, which
elaborates Article XIX of the GATT, is a
provision whose violation is justified by
the former.20 Thus, Article XXIV justifies
a prima facie violation of Article 2.2 of
the Safeguard Agreement. However,
according to the Appellate Body’s ruling
in Turkey — Textiles, this defense is
permissible only when the following
two conditions are satisfied. First, the
party which invokes this defense must
demonstrate that the measure at issue
is introduced upon the formation of an
RTA that fully meets the requirements of
Article XXIV. By this text, the Appellate
Body set the timing of the measure
that can be justified under Article XXIV.
Second, that party must demonstrate
that the formation of that RTA would be
prevented if the measure at issue were
not allowed.21 It means that the measure
at issue is necessary for the formation of
20
Joost Pauwelyn, “The Puzzle of WTO Safeguards and
Regional Trade Agreements”, Journal of International Eco-
nomic Law 7 (1) (2004): 129
21
Appellate Body Report, Turkey — Textiles, para.58
34
2017 5(65)
an RTA which is consistent with the GATT.
The first condition is called the timing test,
and the second one is called the necessity
test.22
In order to satisfy the timing test, the
measure of excluding RTA members from
the application of safeguard measures
must be introduced upon the formation
of the RTA. If the safeguard measure
is introduced after the formation, it is
doubtful whether that measure could
meet the timing test.23 However, if the RTA
obliges its parties to eliminate safeguard
measures among them, the test could
be met because the measure is then
considered to have been introduced upon
the formation of RTA.24 In such a case,
that obligation should be treated as the
elimination of safeguard measures among
RTA members.25
With respect to the necessity test,
there is a debate about whether that test
applies only to WTO violations arising
from the fulfillment of external trade
requirement or both internal and external
trade requirements.26 This debate is
important because a safeguard-applying
WTO Member excludes its RTA members
from the application of safeguard
measures in order to satisfy internal trade
requirement (elimination of duties and
22
Alan O. Sykes, The WTO Agreement on Safeguards: A
Commentary (Oxford: Oxford University Press, 2006), 235;
Joost Pauwelyn, “The Puzzle of WTO Safeguards and Re-
gional Trade Agreements”, Journal of International Econom-
ic Law 7 (1) (2004): 131; Dukgeun Ahn, “Foe or Friend of
the GATT Article XXIV: Diversity in Trade Remedy Rules”,
Journal of International Economic Law 11(1) (2008): 127-28
23
Alan O. Sykes, The WTO Agreement on Safeguards: A
Commentary (Oxford: Oxford University Press, 2006), 235;
Joost Pauwelyn, “The Puzzle of WTO Safeguards and Re-
gional Trade Agreements”, Journal of International Econom-
ic Law 7 (1) (2004): 131
24
Alan O. Sykes, The WTO Agreement on Safeguards: A
Commentary (Oxford: Oxford University Press, 2006), 235
25
Panel Report, US — Line Pipe, para.7.141, n.128
26
Andrew D. Mitchell and Nicolas J.S. Lockhart, “Legal Re-
quirements for PTAs under the WTO”, in Simon Lester and
Bryan Mercurio (eds.), Bilateral and Regional Trade Agree-
ments: Commentary and Analysis (Cambridge: Cambridge
University Press, 2009), 88; Lorand Bartels, “WTO Dispute
Settlement Practice on Article XXIV of the GATT”, in Fed-
erico Ortino and Ernst-Ulrich Petersmann (eds.), The WTO
Dispute Settlement System 1995-2003 (Hague: Kluwer Law
International, 2004), 270-271

other restrictive regulations of commerce
between RTA members) under Article
XXIV:8(a)(i) and (b).
Some commentators argue that
applying the necessity test is inappropriate
to a measure arising from internal trade
requirements under Article XXIV:8.27
This argument is primarily based on the
panel’s reasoning in US — Line Pipe.
In this case, in which the US excluded
NAFTA members from the application of
safeguard measures, the panel stated
that the Appellate Body in Turkey-
Textiles formulated the necessity test in
the circumstance that an RTA member
(Turkey) imposed restrictive measures
(quantitative restrictions) against import
from a third country (India) on the
formation of a CU with EC. Therefore,
in the case of trade restrictions against
non-RTA members, it is appropriate to
require the demonstration of the necessity
of such restrictions on the formation of
the RTA.28 In contrast, the panel noted
that “if the alleged violation of the GATT
1994 forms part of ‘duties and other
restrictive regulations of commerce’ in
Article XXIV:8, there can be no question of
whether it is necessary for the elimination
of ‘duties and other restrictive regulations
of commerce’”.29 According to the panel,
because an RTA cannot exist without the
internal requirement under Article XXIV:8,
any measure, which is compatible with
such requirement, can be “necessary”.30
Nevertheless, in Turkey — Textiles,
the Appellate Body did not distinguish
between measures arising from external
trade requirements and measures arising
from internal trade requirements, though
the case concerns the treatment of an
RTA member against a non-RTA member.
Instead, the Appellate Body stated that
27
Ibid.
28
Ibid.
29
Panel Report, US — Line Pipe, para.7.148
30
Joel P. Trachtman, “Toward Open Recognition? Standard-
ization and Regional Integration under Article XXIV of the
GATT”, Journal of International Economic Law 6(2) (2003):
475
35
Before Creating a Law
“Article XXIV can justify the adoption
of a measure which is inconsistent with
certain other GATT provisions only if
the measure is introduced upon the
formation of an RTA, and only to the
extent that the formation of an RTA would
be prevented if the introduction of the
measure were not allowed.”31 In addition,
the panel’s findings in US — Line Pipe
on the inappropriateness of the necessity
test to internal trade requirements are
not legally valid because the Appellate
Body concluded that they “have no legal
effect”.32 Thus, because the Appellate
Body in Turkey — Textiles did not specify
that the necessity test should be applied
only to WTO-inconsistencies arising from
the external trade requirement of Article
XXIV, it is possible to argue that the
necessity test is also applicable to WTO-
inconsistencies arising from the internal
trade requirement.33
There is another argument for
applying the necessity test to the measure
arising from fulfillment of internal trade
requirements. Since the GATT does not
include a definition of the term “other
restrictive regulations of commerce”, it is
necessary to prove whether any measure
arising from the formation of RTAs under
Article XXIV:8(a)(i) and (b) is within
the scope of the term. As Trachtman
notes, the issue of whether a particular
measure is necessary depends on the
definition of such term.34 As analyzed
in Chapter 2, safeguard measures fall
within the scope of this term. Thus, the
necessity test developed by the Appellate
Body in Turkey — Textiles is applicable
to the exclusion of RTA members from
the application of safeguard measures.
31
Appellate Body Report, Turkey — Textiles, para.46
The main reason for dismissing the panel’s findings is
32
mentioned in Chapter 3 (Section 3.2).
33
Mohammad F.A. Nsour, Rethinking the World Trade Or-
der: Towards a Better Legal Understanding of the Role of
Regionalism in the Multilateral Trade Regime (Ottawa: Side-
stone Press, 2009), 84-85
34
Joel P. Trachtman, “Toward Open Recognition? Standard-
ization and Regional Integration under Article XXIV of the
GATT”, Journal of International Economic Law 6(2) (2003):
477
LAW REVIEW
Consequently, it is possible to argue that
Article XXIV can justify the violation of
non-discriminatory rule of Article 2.2 of the
Safeguard Agreement under the Appellate
Body’s test in Turkey — Textiles.
Nonetheless, under the necessity
test, a WTO Member which seeks Article
XXIV defense has the burden of proof
that such exclusion is necessary to form
an RTA, or the formation of an RTA would
be prevented if such exclusion were
not allowed. In Turkey — Textiles, the
Appellate Body held that Turkey had not
showed that the formation of the CU with
EC would be prevented if quantitative
restrictions were not allowed.35 However,
because Article XXIV:8(a)(i) and (b)
requires elimination of trade restrictions
(including safeguard measures) between
RTA members and does not state which
trade restriction should be abolished or
maintained, RTA members may claim that
the exclusion of RTA members from the
application of safeguard measures can be
deemed as necessary for the formation of
RTA under Article XXIV.
CONCLUSION
The Article XXIV defense to certain
GATT violations is a key issue about the
relationship between RTAs and the WTO.
35
Appellate Body Report, Turkey — Textiles, paras.62-63.
The main argument against Turkey’s adoption of quantita-
tive restriction on textile and clothing products from India is
that the panel found that there were less applicable trade
restrictive measures other than quantitative restrictions. The
Appellate Body agreed with this argument in the case.
---o0o---
36
2017 5(65)
This article discusses the issue about
whether Article XXIV can be a defense
to a violation of non-discriminatory rule in
Article 2.2 of the Safeguard Agreement.
Several disputes have arisen concerning
the exclusion of imports of RTA members
from the application of safeguard
measures. WTO panels and the Appellate
Body have not yet definitively settled this
issue.
The article examined such exclusion
under the test which the Appellate
Body developed in Turkey-Textiles.
As CU and FTA have same internal
trade requirements (elimination of trade
restrictions with respect to substantially all
the trade between parties) under Article
XXIV:8, drawing distinctions between CU
and FTA is unnecessary for the analysis
under this test. A safeguard-applying
WTO Member can satisfy the timing test
if that Member introduces the measure for
the exclusion of its RTA members from the
application of safeguard measures on the
formation of an RTA, or that WTO Member
has the obligation to exclude its RTA
members under an RTA. With regard to
the application of the necessity test to the
measure for excluding RTA members from
the application of safeguard measures,
this thesis found that the test is applicable
to such measure. Thus, the article argues
that Article XXIV defense is allowable
if the test is fulfilled. Thus, Article XXIV
can justify a violation of Article 2.2 of the
Safeguard Agreement by an FTA or a CU.

PUBLIC SECTOR AND GOVERNANCE REFORM:
ASSESSING THE DEBATES ADDRESSING THE
PERFORMANCE MANAGEMENT SYSTEM
Enkhtsetseg.S, Director,
The National Legal Institute
KEY WORDS
Public sector and governance re-
form, New public management, perfor-
mance management, effectiveness and
efficiency of public sector, public mana-
gement reform in Mongolia, output and
outcome
INTRODUCTION
There is now widespread inter-
national interest in measuring not only
the quality of services but also improve-
ments in quality of life both overall and
specific dimensions such as health, so-
cial wellbeing and environment. More-
over, there have recently been some
encouraging developments in the mea-
surement of improvements in gover-
nance processes.
Despite the recent popularity of
governance at both the practical and
theoretical levels, continues to mean dif-
ferent concepts to different bodies.
Hyden (p 12) argues that such dif-
ferences tend to shape up along two
37
Legal Thinking: Views and Reflections
lines. Along the first line, there is a dif-
ference between those who view gov-
ernance as concerned with the rules of
conducting public affairs versus those
who see it as steering or controlling
public affairs. Along the second line, the
difference is between governance as re-
lated to performance or process. Some
analysts treat governance as reflected in
human intention and action. For exam-
ple, representatives of the donor com-
munity wish to see measurable results
of governance-hence their concern with
developing results-based indicators.
According to Pollitt, Clarke & New-
man (Cited in Minogue et al 2000) the
transformation of public administration
onto ‘public management’, and what has
become known as the rise of ‘manageri-
alism’ in the public sphere in the 1980s
and 1990s.
The rise of the new public manage-
ment ideas in the West has been asso-
ciated with sharp increases in inequality
and exclusion. A similar historical as-
sociation exists with sharply worsening
deprivation in low income countries.
The driving forces of social exclusion
in both cases have economic crisis: the
collapse of near full employment in the
West; debt and economic and fiscal cri-
sis in low-income countries. (Minogue et
al, 2000)
Peters (2001) believes that one of
the principal complaints about the tradi-
tional culture is that it focuses on pro-
cedures rather than on the outputs of
government.
Various aspects of the recent
changes in the public sector that have
come to be known as public manage-
LAW REVIEW
ment reform in general and ‘New Public
Management’ (NPM) more specifically. It
refers to reforms that have become pop-
ular in many OECD countries during the
1980s and 1990s of the previous centu-
ry (Maesschalck 2004).
In this essay I will assess the de-
bates about government reform ad-
dressing the performance management
system driving to ‘good governance’ and
effectiveness and efficiency of public
sector. The scope of this essay will be
restricted to an in-depth case study of
implementation of NPM policy in Mongo-
lia. First, I shall define concisely general
understanding of performance manage-
ment principles and assess scholars’
ideas about NPM. Secondly, will present
a contemporary examples and failures
of NPM application in Mongolia. Finally,
some scholars’ notions of management
principles and process in modern public
sector will be assessed.
My purpose is primarily to enhance
the understanding of what has been
happening with governance in terms of
outcome of public sector activities in in-
ternational practice and to clarify the fu-
ture implications of the alternative con-
ceptions.
Governments are now using per-
formance and quality standards as the
means for assessing management and
policy, with economic efficiency being
one of a number of standards that are
being applied to managers and their
programs.
The spirit of the reforms is the tar-
get setting for the ‘outputs’ of individuals
and agencies (Minogue et al, 2000) and
market based (Peters, 2001) reforms
(participation, public private partner-
ships etc). Laking (1999) highlights that
“The ‘new contractualism’ which is at the
heart of the New Zealand reforms...”
Minogue et al (2000) make clear
the target setting process as two ways in
primary health care, doctors in England.
38
2017 5(65)
For instance, doctors may be paid per
patient (capitation fees), with targets to
meet on patient care, or agencies may
be given budgets (as ‘fund holders’) to
buy patient care from hospitals, or in
some cases from themselves. Narrative
is about the resultant incentives.
Principle-agent theory also played
an important part in the NPM paradigm
and it underpinned many practical re-
forms including the structural separation
of purchasers and providers to establish
contractual relationships (O’Flynn 2007,
p 356).
In total, this set the foundation for
a process whereby it was expected that
by Kelly (Cited in O’Flynn 2007, p 356),
‘... the government manager clearly
articulates the policy, sets the performance
standards, and chooses a competitive mar-
ket an agent who fail faithfully act in the
government’s behalf to deliver the goods
and services so that the outcome sought
will be attained.’
Hyden (p 3) argues that it is im-
portant to make a distinction between
governance performance indicators and
governance process indicators. Perfor-
mance indicators refer to the quality of
governance in terms of a normative out-
come, such as the level of corruption.
Process indicators refer to the quality of
governance in terms of how outcomes
are achieved.
Hood (2007) believes that man-
aging government and public services
by numbers that describe outputs, out-
comes, inputs and throughputs deter-
mined three major forms of manage-
ment by numbers: firstly, Target systems,
which measure actual performance
against one or more specified aspira-
tional standards expressed as threshold
numbers, secondly, Ranking systems,
which measure current or past per-
formance of comparable service units
against one another, lastly, Intelligence
systems which measure performance for
background information.

While we measure performance in
general, we know relatively little about
the validity and reliability of complex
composite performance measurement
systems.
According to him, following mea-
surement errors are unavoidable in any
attempt to quantify:
1/ Simple mistakes (clerical error,
such as inadvertent double-counting or
omissions at the source of data collec-
tion)
2/ Sampling error (the indicator,
time period or subunit taken is not rep-
resentative of the overall population etc)
3/ Categorization errors (where
confusion about how to fit cases into
categories may result in faulty assign-
ment of those cases)
4/ Gaming or cheating (deliberate
messaging or outright untruth of num-
bers collected with the intention of im-
proving the position of an individual or
organization)
Mayne (2007) believes that the
challenges are more than technical
ones dealing with, for example, various
measurement problems. Rather, the
main challenges are often organiza-
tional and behavioural in nature. Then
determined challenges to implementing
results-based management in public or-
ganizations. For example, fostering the
right climate, setting realistic expecta-
tions, implementing to get buy-in and
use, setting outcome expectations, se-
lectivity, avoiding distorting behaviour
and accountability for outcomes are
considered as ‘Organizational challenges’
whereas ‘Technical challenges’ are chal-
lenges related to measurement, attribu-
tion, linking financial and performance
information, data quality and reporting
performance.
Peters (2001) argues that the pub-
lic sector management reform have now
been spread to many developing coun-
tries, usually in connection with the pro-
39
Legal Thinking: Views and Reflections
grams of donor organizations. Though
they may have produced some notable
results in the industrialized countries,
these programs appear unsuited in
many ways to the administrative and
cultural conditions of developing soci-
eties. In particular, public administration
in developing and transitional countries
often lacks the institutionalized value
systems that make deregulated and
more self-governing realistic, assuming
that any government must maintain its
accountability and integrity, as well as
being efficient. (Peters, 2001)
Like this practice the Mongolian
Government has been implementing a
program of public sector governance
reforms over 10 years which originated
from New Zealand and sought Asian De-
velopment Bank (ADB)’s support.
With ADB support, the Government
also drafted the Public Sector Manage-
ment and Finance Law to provide the
overall legal framework to strengthen
governance within the public sector
(http://www.adb.org viewed on 11 Oct
2008). The law and other related legis-
lations concerning to the requirements
of the appointment or selection of man-
agers of the public sector organizations,
new system of revenue and expenditure
of state budget and the system to en-
courage public officials in view of eval-
uating their effectiveness and efficiency
to improve their accountability were ad-
opted in 2002 by the State Great Hural
(Parliament of Mongolia). Though the
State Great Hural (Parliament of Mongo-
lia) made the law invalid in late on 2011.
The Mongolian public services
had to become more accessible and re-
sponsive to consumers as well as more
accountability. Hence efficiency, effec-
tiveness and accountability of the public
sector were one of the expectations of
the reform. The reality was different in
fact.
As Hood (2007) argued that New
Zealand became internationally known
LAW REVIEW
for developing quantified targets for
public service outputs in the late 1980s
(as part of a regime that made ministers
responsible for ’outcomes’ and civil ser-
vants for ‘outputs’).
According to the policy, all depart-
ments of the public sector produce an
annual “statement of intent” (contract)
in which it sets out its objectives for the
year. The statement of intent shows out-
comes which it wishes to achieve and it
says how the achievement of these out-
comes will be measured. Moreover, it
includes forecasts for the coming finan-
cial year of the income which the depart-
ment expects to receive and the costs of
the outputs /goods and services/ which
it is expected to provide.
Since the policy has been trans-
ferred to Mongolia, the Government
has been introducing a bill based on an
overall budget of the all departments’
activities of each financial year to the
Parliament. The budget is approved by
the Parliament to be allocated to the
departments is tied to the production of
specific outputs. Although there is clear
link between the money and how it is
used the Ministry of Finance and Econo-
my, the Government and Parliament al-
ter the calculation with direct relevance
to centralized tax income in their each
level. In other words, the general man-
agers of the departments are not autho-
rized to encourage the staffs financially
in view of the work effectiveness, but
distributes the specified amount in har-
monized basis.
On the other hand, the system to
encourage staff in view of evaluating
their outcome and contribution to the
improvement of the work effectiveness
does not work properly. According to
NPM rewards are given for good per-
formances and poor performing staff
can be removed (Boston et al. 1996). In
practice, some managers treat unfairly
the employees and to some extent the
manager’s decision in terms of reward
or encouragement is subjective.
40
2017 5(65)
Another pitfall is managers of the
public sector do not know what indica-
tors will be used with what weighting for
what purposes, their incentive. There
are always complications and difficulties
which key performance indicator (KPI)
must be used evaluate outcomes to the
different types of operations in which an
organization is engaged. For example,
in the case of Police Department, the
KPI is considered the number of peo-
ple who have been fined, the number
of crimes investigated, and the number
of arrests that have been made. Police
officers’ work is evaluated on the basis
of the number of this kind of “products”
they supply. Such evaluation criteria
mean that police officers are compelled,
for example, to issue frivolous tickets in
order for they receive favorable perfor-
mance reviews. Consequently, if crime-
control is successful and the incidence
of fines or arrests decreases, it would
reflect poorly on officers’ performance,
when in actuality a drop in the crime rate
should be highly praised as a reflection
of a well-functioning police department
and effective police officers. The perfor-
mance evaluation intrinsically empha-
sizes enforcement rather than service,
and creates motion for corruption and
bribery (ICMC& The Asia Foundation
2008).
In my opinion, however there are
some improvements in terms of saving
state budgetary money and public servants’
accountability there are incomplete imple-
mentation of the policy in practice as Hyden
(p 16) concluded as ‘though it is possible
that the same kind of governance set up in
two separate countries may produce differ-
ent outcomes because of variations in poli-
cy formulation or implementation capacity’.
The reason why it has not been im-
plemented incompletely, firstly, the poli-
cy has transferred without consideration
of Mongolian current situation, culture,
and even the vulnerability of existing
corruption in Mongolia.

Secondly, the new system was im-
plemented irrespective of social, eco-
nomic, political and ideological differ-
ences between the ‘borrowing’ and the
‘transferring’ countries.
In addition, insufficient information
and knowledge about the policy how
it is implemented in the original coun-
try led to problematic situation. Finally,
some crucial elements of the policy im-
plementation have not been transferred
completely such as evaluation system of
outcome and estimating outputs.
Briefly, Mongolia had to make good
planning and good estimation of the ca-
pacities before introducing the new pub-
lic sector reform. As Osborne (2002, p.
218) mentioned, a few developing coun-
tries such as Mongolia are in the early
stage of adopting some features of the
New Zealand new public management,
but it is much too early to measure how
far they will go embracing its basic prin-
ciples of the policy.
Peters (2001) believes that the ad-
vancement of the public sector reform
was to be based on merit, demonstrated
either by performance on the job or by
a series of examinations. It is now less
clear that how merit is to be measured in
the context of public domain, again with
forces and priorities of the market being
used to “test” the worth of individuals as
well as policies.
Steering in the context of urban
governance recognizes that government
cannot impose its policy but must rather
negotiate both policy and implementa-
tion with partners in public, private, and
voluntary sectors. (Pierre 2000) He ar-
gues that effective governance requires
the direct involvement of various inter-
ests both in the making and implement-
ing of policy.
Bovaird and Loffler (2003, p 317)
argue that over recent years, there is
now an interest in measuring the suc-
cess of public interventions in terms of
41
Legal Thinking: Views and Reflections
the quality of life changes which they
bring about for those affected by them,
rather than the quality of the activities
themselves. This means, for example,
we need to assess as following:
- the level of community safety
perceived by citizens, rather than the
quality of police and crime prevention
services;
- the level of health and social
well-being experienced by citizens, rath-
er than the quality of health and social
care given to service users;
- the quality of environment which
people experience rather than the qual-
ity of environmental protection or im-
provement service. (Bovaird and Loffler
2003, p 318)
In recent years, projects which
have sought to measure the quality of
life (QOL) have mushroomed, particu-
larly at the local level. In many cases,
the first trigger for the development of
QOL indicators was the need to respond
to Agenda 21, following the Rio Earth
Summit in 1992 (Bovaird and Loffler
2003, p 320).
They identified some of the most in-
teresting recent international QOL proj-
ects. Firstly, Human development Index of
the United Nations (2002) which criteria
for calculating the rankings include life
expectancy, education attainment and
adjusted real income.
Secondly, the Compass Project of
the Bertelsmann Foundation in Germa-
ny supports the definition of QOL indi-
cators at the local level with involvement
of key stakeholders; Thirdly, The Audit
Commission in Britain, working over 70
pilot local authorities, has developed a
portfolio of 38 indicators in 13 thematic
areas such as, community involvement,
social and environmental field. Lastly,
The European Urban Audit was launched
by the European Commission in 1997
with a set of 33 QOL indicators on five
themes including socioeconomic de-
LAW REVIEW
velopment, civic involvement, levels of
training and education, environment,
culture and recreation.
Most discussions of performance
measurement and monitoring focus on
ongoing types of measurement activi-
ties and balanced scorecards. Accord-
ing to Mayne (2007, p 101), evaluations
ought to play a key role in performance
measurement systems, which are often
referred to as ‘ monitoring and evalua-
tion’ systems, with little attention paid in
practice to the evaluation component.
Evaluations are often the best way to
get at hard-to measure aspects of per-
formance and to deal with the problem-
atic issue of attribution.
An important first step is to recog-
nize the various challenges and con-
sider how to deal with them. Planning,
budgeting, implementing and reviewing
all need to become results focused and
more empirically based (Mayne 2007, p
104).
But governments can no longer
impose their wills through legal instru-
ments. Kooiman (1993) also argues
that governing in most industrialised
democracies has become a process of
bargaining and mediating rather than of
applying rules (Cited in Peters, 2001)
Peters (2001) argues that the di-
rection of producing efficiency would be
certainly gained in market assumptions.
For this reason, it appears that the appli-
cation of the market model will still leave
a definite role for central agencies as
instruments for imposing some common
goals and directions on government. The
basic model of the free market for exam-
ple, assumes that sellers and buyers do
have common interests-exchange and
profit- while for agencies with compet-
itive purposes that exchange is not so
easy to foster.
If seen by advocates by tradition-
al model, there are lacks of the per-
manence of the bureaucracy which is
42
2017 5(65)
the source of organizational stability,
reliability, ensuring the government ac-
countability for its action and predictabil-
ity.
The emerging pattern is one in
which delivering public services will con-
tinue to involve the private sector, seem-
ingly at ever increasing levels. Yet many
of the fundamental issues-accountabili-
ty, fairness, effectiveness-remain as im-
portant as before (Peters 2001).
Moreover Peter (2001) emphasises
that even though market model is ade-
quate and desirable for the certain mar-
ketable services, yet that same model
would be totally inappropriate for many
social services, education being one
commonly discussed exception. Like-
wise, the participatory model would be
well suited to urban planning or environ-
mental issues but would produce difficul-
ties for many criminal justice programs.
To have the collaborative capacity
to achieve this, the public sector needs
to build up long-term working relation-
ships between parts of the public sector
needs professional confidence, distinc-
tive expertise and an ability to think long
term, all of which can be undermined by
the competitive framework. It also needs
local accountability, rather than focus on
top-down monitoring characteristic of
the new public management in practice.
(Minogue et. al 2000)
CONCLUSION
In both NPM and governance,
steering is a key concept. Osborne and
Gaebler (Cited in Peters and Pierre
1998) coined the slogan that govern-
ments should focus more on steering
and less on rowing, thus managerial
perspective plays a prominent role in
both governance and NPM.
Without the analysis and interpre-
tation, it will be difficult to comprehend
the emerging form of the state in soci-
ety-both industrialized and transition-

al and to think about the fundamental
problems of governing.
An important role for the state re-
mains. This role is about for developed
economies is more one of redefining
governance in light of globalization,
for developing economies is how to
strengthen economic governance in a
context of weak state institutions and
economic dependency. Although net-
works and public-private partnership
characterize governance in developed
as well as developing economies, their
governance challenges differ. (Kjaer,
2004)
We also must ask whether the re-
forms, and the style of governing as-
sociated with them, are appropriate as
universal standards or whether they are
bound in culture and in particular socio-
economic systems (Peters, 2001).
Thus we can see again that no re-
form is likely to be universal; instead re-
form must be matched carefully with the
needs and the traditions of the system.
REFERENCE:
Bovaird, T & Loffler, E 2003, ‘Eval-
uating the quality of public governance:
indicators, models and methodologies’,
International Review of Administrative Sci-
ences, SAGE Publications, Vol. 69, pp.
313-328;
Debating governance 2000, ed.
Pierre J, Oxford, University Press
Hood C, 2007 ‘Public Service Man-
agement by Numbers: Why Does it
Vary? Where has it Come From? What
are the Gaps and the Puzzles?’ Public
money & Management April 2007 CIPFA
Hyden, G. Court, J, & Mease, K 2004
Making sense of Governance Empirical
Evidence from 16 Developing Countries,
Boulder, London
---o0o---
43
Legal Thinking: Views and Reflections
International Centre for Mongol
Culture (ICMC) and The Asia Founda-
tion, 2008, Survey on ‘Community ori-
ented policing in Mongolia ’ Ulaanbaatar,
Mongolia
Kjaer, A M ‘Governance in Compar-
ative Politicsl: The State and Economic
Development’, in Kjaer, A M. 2004. Gov-
ernance, Polity Press, UK
Maesschalck J, 2004 The impact
of new public management reforms on
public servants’ ethics: towards a theo-
ry, Public administration vol.82, No. 2, pp.
465-489
Mayne J 2007, Challenges and Les-
sons in Implementing Results-Based Manage-
ment SAGE Publications, vol 13, pp. 87-109
Minogue M, Polidano, C & Hulme,
D (ed) 2000 Beyond the new public man-
agement: Changing ideas and practices,
Governance Edward Elgar, Cheltenham,
UK
O’Flynn J 2007, ‘From New Public
Management to Public Value: Paradig-
matic Change and managerial Implica-
tions’ The Australian Journal of Public Ad-
ministration, vol. 66, no.3 pp. 353-366
Osborne.P 2002, Public manage-
ment: critical perspectives, London and
New York, vol 4
Parliament of Mongolia 2002, ‘Law
on management and budgetary of public
sector organisation’
Peters, B. G & Pierre, J 1998 ‘Gov-
ernance Without Government? Rethink-
ing Public Administration’ Journal of Pub-
lic Administration Research and Theory,
pp. 223-243
Peters, B. G 2001 The Future of
Governing, 2nd Revised ed, University of
Kansas Press
http://www.adb.org/Evaluation/re-
ports/pper-mon-governance.asp
LAW REVIEW
TRUST LAW CONCEPTS IN MONGOLIA
Oyuntungalag.J, Ph.D., Chief Judge, the
Capital City Court of Civil Appeals
CHAPTER 2. TRUST PROPERTY1
Mismanagement of funds under new
investment scheme is a serious problem
in Mongolia today making beneficiaries
from the funds impossible to protect their
rights2. Fundamental standards of the
trust law strictly separate legal ownership
and benefits from the property between
the trustee and the beneficiary. Thus the
trust law standards providing clarity in the
scope of trust property and in property
rights and corresponding duties of trust
participants can help to solve these
problems.
Section 2.1 Independence of trust
property
2.1.a. Scope of the trust property
and necessity for independence. As the
aim of a trust is to obtain maximum benefit
from the trust property for the beneficiary,
the property should be protected from the
creditors both of the settlor and trustee.
Trust property can change form
under the trustee’s management3, and
it is therefore important to have a clear
understanding about the scope of possible
claims by the beneficiary. A beneficiary,
the sole interested and capable person in
enforcement of the trust, cannot exercise
her right if she has no idea about the
1
The second two chapters of the master thesis “Application
of Trust Law in Civil Law of Mongolia”
2
Interview with D,Gankhuyag, a member of the parliament
and the head of the working group of the Parliament
investigating loan and credit cooperative, www.mongolnew.
mn visited October 6 2006
3
Supra note 8 at 59
44
2017 5(65)
scope of her interest in the property4.
According to the bill of the Japanese
trust law, any property acquired by the
trustee through administration, disposition,
distinction, damage or other causes shall
be considered trust property.5 Thus the
product from the trust property will accrue
to the trust property itself, and not to the
trustee personally, so the trust is a special
form of property relationship.6 In contrast,
under the Civil Code of Mongolia, the
fruits of property will be the property of the
legal owner if otherwise it is not stated by
the law or contract.7
This independence of the trust
property is due to two factors, which are
related to the creation and administration
of the trusts.
2.1. b. Ways to provide the trust
property with independence
2.1. b.I. Separation of the trust
property from the settlor’s patrimony.
To create a valid trust, the settlor must
identify which property is transferred to the
trust, in a way this is ascertainable by the
external world.8 This does not require that
the property be physically described, but it
must be identifiable from the description.9
4
H.Hansmann&U.Mattei, Function of the Trust Law:
Comparative Legal and Economic Analysis, 73
N.Y.U.L.Rev.434 (May, 1998)
5
Shintaku-hou Kaisei Youkou (Houseishingi Kaitoushin) [Bill
of Trust Law of Japan (Report of Council on Legal system)]
Art. 22 b, Shintaku [Trust] No.225 (2006.5)
6
Restatement (Second) of Trusts, 1959
7
I.H Art. 93.
8
Supra note 32 at 684
9
Wilce.v.Van Andon, 248 Ill. 358; 94 N.E.42; 19Ill.LEXIS
2259 Feb.25, 1911 (..testator left his estate in trusts, that
portions of the trust property will be given to his brothers
and sisters in they proper need and remainder will be served
for the charitable purpose. In this case court considered
that trust is invalid as the remainder can not be identified);
Cemetery Co.v.Lodge, 2 terry (41del.)125, 16 A.2d.
250,(trust property should cover the costs of buries of his
family, considered valid)

According to the Japanese Trust
Law of 1922, registered or recorded
property such as immoveable, valuable
instruments and some securities,
identified as trust property on the relevant
register10. But the means of identifying
other property is not specified which
could lead to uncertainty.11 However
the bill of the new Trust Law recognizes
three different ways of trust creation:
contract, will and declaration of the trust
by the settlor. The main requirement for a
declaration is notice for the beneficiaries
about the content of the certificate of the
trust declaration.12 One of the advantages
in the bill is that it regulates the rights of
the bona fide creditors of the settlor and
beneficiaries of the trust.13
The UTC recognizes three ways of
creating trusts: transfer of the property to
a trustee other than the settlor; declaration
by the settlor that he holds identifiable
property as a trustee; and exercise of a
power of appointment14. In the first case,
the trust property can be identified by the
transfer itself, but in the second case, the
best means of identification of the property
is reregistration of the trust property in the
name of the trustee as owner. However,
in this case a trust can be created without
transfer of the title, if the trust property
is properly identified in a schedule list
certifying the settlor’s intention to create
a trust.15
2.1. b.II. Separate administration
of the trust property. The segregation
requirement16 is one of the most important
requirements in trust administration, which
makes the trust more transparent.
According to Japanese legislation,
separate administration of the trust is
10
S.T.H Art.3.
11
S.T.H
12
Supra note 60 at 4(3)
13
Id. at 6
14
Uniform Trust Code [UTC] Sec.401 (2005)
Heggstad v. Heggstad, 20 Cal. Rptr. 2d 433 (Ct.App 1993)
15
LEXIS 649 June 21, 1933
16
John H. Langbein, The Secret Life of the Trust: The Trusts
as an Instrument of Commerce, Yale L.J. 165 (October,1997)
45
Legal Thinking: Views and Reflections
directly stipulated by the law,17 with
methods clearly defined in legislation.
For property not able to be registered
and recorded officially, methods for
separating such property are specified.
Thus, moveable properties should be
administered in a way that makes it
possible to distinguish it by its external
form, or to calculate it as a definite sum
of money.18
Complementary provisions concern
the scope of the trust property and the
distinction of the trust property from the
trustee’s own property, and prohibit the
set off against trust property of unrelated
obligations.19 But these provisions cannot
be implemented in real life without
provisions which relate to the keeping of
account books and records.20 Hence the
trustee is obliged to keep books on the
management of affairs and accounts,
as well as to prepare an inventory upon
receipt of trust property and regularly
once a year, and to preserve such
documents for a certain period of time.
This strengthens the ability of the settlor,
his heirs21 and the beneficiaries of the
trust to police the execution of the duty
and obligation of the trustee.22 The period,
and methods of the record keeping are
well addressed by the legislation, however
keeping of records only by the trustee
seems insufficient, which relies heavily
on the trustee’s correct execution of his
fiduciary duty. Thus the UTC stipulates
that record of the trust property interest
should be certified by third parties other
than trustee and beneficiary23.
17
Art. 28 S.T.H, Supra note 60 at 22
18
Supra note 60 at 22 (b)
19
Id. at 9, 11, 15, 20
20
Id. at 39
21
It is odd that the settlor and his heir has such right, if trust
property is completely transferred to the trust, they should
not have any interest in it? And such kind of powers are set
in many articles of the trust law 1922, for example articles
23, 27, 40
22
Supra note 60 at 24.2
23
UTC Sect.810 (c)
LAW REVIEW
Section 2.2 Trust property and the
ownership right
The purpose of this chapter is to
identify differences in ownership rights
between civil law and trusts, beginning
with a brief description of ownership
concepts of civil law as adopted by the
Civil Code of Mongolia. This will be
followed by a comparison with Japanese
trust legislation and the Uniform Trusts
Code of the USA.
2.2. a. Ownership in the Civil
Code of Mongolia. The legal concept
of the ownership in modern civil law is
impacted by many historical factors and it
has conceptual differences even in itself.
In Roman law, ownership is an exclusive
right, in other words only one subject can
own the object at the same time, if other
person holds any right on that object his
right should be less than the ownership24.
Therefore the ownership right gives to its
holder the right on that property against
any one (a right in rem), and but in an
obligation relationship, the holder has
rights only against the other party (a right
in personam).25
According to the Civil Code
of Mongolia, the ownership right is
determined as a right to freely possess,
utilize and dispose of the object and protect
from any encroachment within the limits
and scope stipulated by the law without
breaking other’s legal rights26. Moreover
a person placed in physical possession
of material assets for a certain period
of time on behalf of another will not be
considered as the true possessor. In this
case the true possessor will be the person
on whose behalf the assets are held.27
From the provisions it is assumed that the
ownership interest in property and legal
possession cannot be separated. This
reflects the traditional civil law concept of
ownership and rights in rem.
24
Thomas G. Watkin, An Historical Introduction to Modern
Civil Law 225 (1 st ed., Ashgate& Darmant, 1999)
25
Id. at 249
26
I.H Art. 101.
27
I.H 89.2.
46
2017 5(65)
2.2. b. Right and duties related to
the trust property
2.2. b.I. Beneficiary and equitable
interests. The main right of the
beneficiary is the right to receive benefit
from the trust property, which is classified
as an equitable right in common law. If
the trustee transfers the trust property to
non bona fide purchaser, or if the trustee
becomes insolvent, the beneficiary is still
entitled to the property. Meanwhile if the
property is lost or destroyed without fault
of the trustee, the loss will be suffered by
the beneficiary28 Moreover, even where
there is a contract between the settlor and
a professional trustee, only the beneficiary
can sue for breach of contract.29
So the beneficiary of the trust has
something more than merely personal
claims which a creditor has against his
debtor, as he is an equitable owner of the
trust property. In other words, beneficiaries
have rights in rem concerning to the trust
property,30 but creditors of the beneficiary
have no right to claim the trust property,
as it is not covered by the full ownership
of the beneficiary. From here it is getting
apparent that the right but not the property
itself is included in the patrimony of the
beneficiary. So creditors of the beneficiary
can apply only to the benefit. Accordingly,
in Japan, as the statutory law allows the
transfer of the right to the benefit to a
third person, creditors of the beneficiary
can attach the benefit. According to the
UTC, creditors of the beneficiary can
reach the beneficiary’s interest in trust
property in a simple trust31, but in case
of the spendthrift trust32, they can reach
it only after distribution by the trustee;
certain creditors are exempted from this
restriction in bankruptcy and under other
28
Supra note 32 at 107
29
F.H. Lawson& B.Rudden, The law of Property 88 (3rd ed.,
2002)
30
UTC sect.1001 (remedies for breach of the trust) and
sect.1002 (damages for the breach of the trust)
31
See 1.2.b for referring to the types of the trusts
32
Id.

legislation.33 In contrast, English law has
refused to recognize the spendthrift trust
for the reason that it will defeat creditors’
expectations.34
2.2.b.II Trustee’s property right
and power. A trustee should follow the
trust purpose and is responsible to the
beneficiaries for good management of
the trust property35 in modern usages of
the express trust. The trustee’s legal title
gives a right in rem to that property. In
other words, he is entitled to protect the
property against anyone, including both
the beneficiary and the settlor36 though
this right is conditioned on his duty to hold
the trust property separately from his own
and other patrimony in order to protect the
trust property from his own creditors37.
In Anglo-American trust law,
determination of the scope of the duties
and powers of the trustee is influenced
by the origin and development of the trust
idea,38 consequently, the trustee’s duties
initially were negative duties and he had
no power to manage and deal with land
if it is not clearly granted by the settlor.
Therefore courts tend to deny trustee’s
powers which are not granted explicitly or
by necessary implication,39 unless such
powers are not provided by legislation.
But this approach seems too inflexible
and weakens the effectiveness of the trust
management.
The first and the most certain way
empowering the trustee is to directly state
the power in the trust instrument.40 This
enables the trustee to freely and quickly
act without delay and expense of asking
for authorization from the court, and is
33
UTC sect.503
34
Supra note 52
35
Supra note 84 at 86 (The word `owners` indicates that very
often they will have the powers of sale and management that
go with ownership. But they are not really owners because
they can not treat the property as their own…)
36
Supra note 51at 4
37
This issue is described in the previous section. 2.1
38
Supra note 32 at 1255
39
Id. at 1257
40
George G. Bogert, Law of Trusts, 231 (4 th ed., 1963)
47
Legal Thinking: Views and Reflections
common in the case of trusts for business
purposes.
The next way is for the court
to authorize the trustee to perform
actions necessary and convenient for
accomplishing trust purposes (implied
powers). For example, if a settlor creates
a trust and transfers real estate to the
trustee to provide his family with the
income from that estate, the right to let
the property on lease will be an implied
power, because it is the normal way of
making income from real estate.
The third way is to look to a statutory
power, where essential powers of the
trustee are determined by legislation.
Several states of the USA have such
statutory provisions.41 This can be an
effective way to determine a trustee’s
power in civil law countries with no judicial
experience of equity jurisdiction.
Finally, as the ultimate purpose
of the trust institution is to provide the
beneficiary with benefits, the powers of
the trustee should be assumed more as
bundle of duties rather than rights. This
principle can be seen from the provisions
of the UTC, where duties and powers of
the trustee are gathered in one article.42 In
Japanese trust law, the trustee’s main duty
is to administer trust property following to
the terms of the trust.43 Following this
provision, the law stipulates a duty of
loyalty, and an exceptional duty of care
and good management.44
2.2. c. Control over the property
and liability from it. Property can create
liabilities as well as benefits. When the
trust property is damaged or suffers a
loss, which is liable?
41
G.G.Bogert&G.T.Bogert, The Law of Trusts and Trustees
#551 (2nd ed., 1978)
42
UTC Art. 8
43
Supra note 60 at18
44
Id. at 19 /duty of care of good management/, at 20 /duty
of loyalty/
LAW REVIEW
Three different rules are applied in
Anglo-American trust law45 relating to
the possibility for damage from the trust
property.
First is the traditional rule, which
places unlimited liability on the trustee46
because he is a holder of the legal title to
the property.
The next rule is established by the
1959 Restatement (Second) of Trusts,
which limits the trustee’s liability to the
extent of the trust assets, because it is
considered unfair to impose unlimited
liability on an innocent trustee.47 A •
difficulty with this rule is that, in the case
of real property in particular, damage may
extend to environment problems, which
touch on the public interest.48
The third rule is the English rule,
which holds the beneficiary fully liable. As
Lord Linley stated in the case of Hardoon
v. Belilios, this is based on the principle
that the person who gets all benefits of
the property should bear its burdens.49
The difficulty with this rule is that it seems
unfair to impose liability on the person who
does not have control over the property.
It is difficult to completely justify any
of these three approaches. Legislators in
this field must be sensitive to the need
to balance of the various interests. In
Mongolia this issue can be decided with
reference to the liability of legal persons,
in other words liability related to the trust
property should in principle be limited by
the extent of the trust property, but where
a public interest is involved, such as the
environment, the first rule, which imposes
extended liability on the trustee, should
apply.
45
Payson R. Reabody, Comments: Taming CERCLA, A
proposal to Resolve the Trustee “Owner” Liability Quandary
, Admn. L.J Am.U., 405 (1994)
46
Smith v. Rizzuto, 276 N.W. 406, 408 (Neb.1937)
47
Supra note 32 at 2251
48
Supra note 100 (… Now that CERCLA has been enacted,
the largely academic debate about the extent of personal
trustee liability has taken on a greater significance in that the
cost of the CERCLA redemption will often exceed the value
of the trust, where trust’s primary asset was contaminated
land)
49
Hardoon v. Belilios, 1901 sh/A.C.118, 123-24
48
2017 5(65)
Section 2.3. Conclusion from the
chapter
The trust law requirements on the
segregation of trust property, record
keeping, accounting and the prohibition
of set off providing clear scope of the
property give the following advantages in
property management:
• Providing a foundation for
distinguishing trust property from property
of the trustee, particularly against creditors
of the trustee;
Providing the beneficiary
with the means to control the behavior of
the trustee.
These rules can be usefully applied
to all fiduciary relationships, such as
estate entrustment, guardianship,
agency, trusts dealt by non-bank financial
institutions. Since the absolute ownership
concept in Civil Code does not recognize
a distinction between equitable and legal
owner’s rights, in current legislation it is
impossible to identify the beneficiary’s
right and corresponding duties of the
trustee.
Chapter 3. Fiduciary duty of the
trustee
In the current environment of
Mongolia, economic interests prevail
over morality and confidence, and
unsophisticated citizens are falling
victim to fraud even at the hands of their
close friends and relatives. Personal
relationships often dominate over legal
judgment, as evidenced by the Mongolian
sayings such as “the face of a friend is hot”,
or “the devil you know is better than the
angel you don’t”. In the author’s opinion,
the state should not only warn people
of the dangers of legal transactions, but
also should provide regulations protecting
fiduciary relationships. Standards relating
to fiduciary duties of the Anglo-American
trust are one source of examples for
such regulations, since they are born
from experience, not from the state

promulgation of abstract and systematic
rights.
Section 3.1 General understanding
of the fiduciary duty and its relation to
the trust
There are many situations that
might give rise to fiduciary relationships,
where the fiduciary50 can be a lawyer, an
officer of the corporation or a trustee. A
beneficiary may be a client, a shareholder
or a beneficiary of a trust or creditors in
bankruptcy. Here we can see that the
fiduciaries are supplying the service to the
users, who are benefiting from a service
which is highly influential to their personal
well being.
Fiduciary law applies standards to
actions of the trustee, who may have skill
or knowledge superior to the beneficiary.51
Although attempts to systematize fiduciary
duty have not been successful, one useful
approach to the subject is critical resource
theory.52Under this theory the following
reasons are common for entering into the
fiduciary relationship:
• a critical resource of the
beneficiary is the subject matter;
• vulnerability of the beneficiary on
breach of duty by the trustee;
• impossibility to describe
completely all the actions of the duty
holder (for example in selling trust property
the cost, time and other conditions are
depending on the trustees discretion).
As above mentioned, the fiduciary
relationship is found not only in trusts, but
also in other relations, but it is essential
50
Black’s Law Dictionary (8 th ed., 2004) (Fiduciary is
described in the as 1. A person who is required to act for
benefit of another person on all matters within the scope
of the relationship; one who owes to another the duties of
the good faith, trust and confidence and candor. 2. One
who must exercise a high standard of care in managing
others property or money. Consequently fiduciary duty is
described as a duty of utmost faith, trust, confidence and
candor owed by the fiduciary to the beneficiary)
51
Langbein. Contractarian Basis of the Law of Trusts, 105
Yale.L.J. 626 (Dec., 1995)
52
Gordon Smith., Critical Resource Theory of Fiduciary
Duty, 55 Vand.L.Rev. 1399 (October, 2002)
49
Legal Thinking: Views and Reflections
to the trust53. Before the late 14th century,
the use, from which the trust was born,
was employed without giving the trustee
the power of management; the trustee
was only the holder of the legal title. But
trustees gradually began to be given
management powers, and controlling the
trustee was almost impossible, because
of the absence of equitable remedies.
Settlors had a need for reliable persons
who can be trustees for their property, so
the Chancellor began to impose remedies
based on a fiduciary duty of the trustee54.
Furthermore, 14th century saw
the rise of professional trustees for the
development of effective management
of the financial assets55, where a trustee
is provided with extensive power to deal
with the trust property. Consequently
the issue of the fiduciary duty became
more important for fulfilling the following
functions:
• to protect the interest of the
beneficiary, who is vulnerable in the
discretion of the trustee;
• to provide guidance (general
principles) for the trustee’s behavior or
conduct in trust affairs, which is impossible
to specify in detail in the terms of the trust.
Corresponding to these two
functions there are two main principles
in fiduciary law,56 the duties of loyalty
and of prudence, which are sometimes
called general duties of the trustee,57
which apply into all actions of the trustee.
All other fiduciary duties arise from these
duties, such as duty to keep accounts and
records, to invest prudently, to protect
trust property, and to make trust property
productive. The common character of
these is that they propose to make clear
and easier to control and enforce the main
53
2 Austin W.Scott The Law of Trusts 1298 (3rd ed., 1967),
Gregory S. Alexandar, A Cognative Theory of Fiduciary
Relationships, 85 Cornell L.Rev. 767 (2002).
54
Supra note 55
55
Supra note 71
56
Id.
57
Supra note 95 at 336
LAW REVIEW
two fiduciary duties, the duty of loyalty and
duty of care.58
Section 3.2 General fiduciary
duties
Duty of loyalty and duty of prudence
are not only different, but also complement
each other, for example, the person who
is performing his duty with due diligence,
can not direct his actions to personally
benefit from the trust property.
3.2.a. Duty of loyalty. The duty of
loyalty requires the trustee to act honestly
and with undivided loyalty to the trust59.
The main concept of this duty is
that a trustee is to refrain from benefiting
personally through use of the trust
property.60 This rule is the strongest duty
held by the trustee, as its function is not
only altruistic but also prophylactic,61
giving complete priority to the beneficiary
in case of interest conflict between the
trustee and beneficiary. This duty strictly
prohibits the trustee to be personally
included in any transaction with trust
property62 although a trustee can do this
with the permission of the court in limited
circumstances.63
The strict character of the duty of
loyalty was reinforced by the introduction of
the sole interest rule64 in the 17th century.65
Today this rule is becoming outdated
due to the rise of corporate trustees, but
it holds that the trustee must serve only
the sole interest of the beneficiary; even
transactions which have other interests
not conflicting with but supporting the best
58
Restatement (Second) of Trusts 170, Restatement
(Second) of Agency, 387
59
Riegler v.Riegler 262 Ark.70; 553 S.W 2d 37; 1977 Ark.
LEXIS 1753
60
Supra note 32 at 1225
61
Robert H.Stikoff, An Agency Cost Theory of Trust Law, 89
Cornell.L.Lev., 621 (March, 2004)
62
Restatement (Second) of Trusts /1957/
63
Restatement (Second) of Trusts 170
64
John H.Langbein, Questioning the Trust Law Duty of Duty
of Loyalty:Sole Interest or best Interest?, 114 Yale L.J.929
(March, 2005)
65
Id.
50
2017 5(65)
interests of the beneficiary will be avoided
according to this rule.66 In practice, courts
are today referring to the best interest of
the beneficiary when judging whether a
transaction was for his sole interest.67
3.2. b. Duty of Prudence. This duty
arises from the manner of administration of
the trust property, and it is different from the
duty of loyalty in that it requires affirmative
action with the highest level of skill and
care. Its function is not protectionist like
the duty of loyalty, but enables the more
effective management of trusts. The level
of skill required is judged case by case,68.
while the duty of loyalty is equal for all
trustees without exception.
On the other hand the duty of
prudence requires the trustee to display
the skill and care that an ordinary capable
and careful man would use in his own
business.69 The level of the skill required
is highest for a professional trustee.70 The
requirement of skill at the level of a trustee
in his own business71 is doubtful, because
it is not guaranteed that all professionals
are doing well in their own business.72
The suggestion73 that corporate
trustees such as banks and trust
companies should show more skill
and diligence than a natural person
is reasonable, because they are
professional entities organized specially
for the purpose of the asset management,
who have more experience, information
and qualifications. This advanced level of
professionalism can be stipulated in the
special legislations or regulations related
66
Restatement (Second) of trusts, 170 (1975)
67
Supra note 119
68
Richard S.Jackson et al. v. Henry J Cohland et al., 178
Conn.52; 420a 2d 898;1979 Conn. LEXIS 809, June 19,
1979 (in this case trustees investment because of which
trust beard loss, is not considered as a breach of trusts
according to the Prudent investor rule)
69
Supra note 95 at 244
70
Tays v.Metler, 1999 U.S.App.LEXIS 4769; N.97-2311
71
Supra note 95 at 244
72
Supra note 32 at 1409
73
Supra note 95 at 145

to their activities74.
Section 3.3 Instruments to enforce
the fiduciary duties
As a trustee has extensive power
over the trust property, future value of the
trust property to the beneficiaries depends
greatly on the performance of the trustee.
The problem of how to make the trustee
fulfill his fiduciary duty for the beneficiary
is one of the main issues in adapting
trusts for use within the civil law. Removal
of the trustee, liability of the trustee for
damages, and appointment of co-trustees
or a trust protector can help to push
trustee to perform fiduciary duties.
3.3.a. Removal of the trustee.
Trustee removal could be based on either
of two grounds, giving preference either to
the settlor’s intention or to the beneficiary’s
interests. The right of the beneficiary to
remove their corporate trustee helps the
beneficiary to protect his interest,75 but
such a right in the beneficiary can break
the intention of the settlor. Thus according
to the basic concept of trust law a trustee
is not to be removed without cause.76
Unlimited power in the beneficiary to
remove the trustee could break the
ownership division between trustee and
beneficiary77. However the “cause” in
this concept is considered by the courts
as a reason related to the fitness of the
individual to perform duties78 or serious
reasons such as public policy, substantial
change of circumstances, or danger of
Maria O’Brein Hylton, “Socially Responsible” Investment:
74
Doing Good Versus Doing Well Investment in an Efficient
Market, 42 Am. U.L.Rev., 1 (1992)
75
Gayle B. Wilhelm, Changing Horses: Some Thoughts
About Removal of the Trustee, 18 Qeinn.Prob. Law. Journal.
273 (2005)
76
David M. English, The Uniform Trust Code: Significant and
Policy Issues, 67 Mo.L.Rev., 143 (2002)
77
Martin M. Shenkmen, The Complete Book of trusts73 (2nd
ed., 1997 )
78
Fleet National Banks Appeal from Probate, 267.Conn.299;
837 A. 2d, 785;2004, Conn. LEXIS I
51
Legal Thinking: Views and Reflections
loss to trust property79. English law tends
to give preference to the beneficiary’s
interest over the settlor’s intent.80 The
Restatement Third of Trusts accepted
both of these approaches, and based on
the case of Claflin v.Claflin,81 states that a
trustee can be removed by the unanimous
decision of the beneficiaries if it does not
contradict with the material purpose of the
trusts.
According to the UTC, trustees
may be removed by the court on a
request from the settlor, co-trustee or
beneficiary, or on his own initiative. The
criteria for making a decision for removal
of the trustee are serious breach of the
trust, absence of cooperation among
co-trustees, substantial change of the
circumstances, or a unanimous request
by all beneficiaries82.
In the case of revocable trusts, there
is no dispute as settlor is keeping control
over the trusts. But in the case of the
irrevocable trusts, where the settlor has
already lost any interest and rights83 it is
somehow odd that the settlor can influence
the trust by removal of the trustee. The
main fiduciary relations are between
beneficiary and trustee, so the person
who is entitled to the trustee’s removal
issue seems to be only the beneficiary, as
the main reason for removal of the trustee
is protecting interests of the beneficiary.84
79
See cases, Claflin v. Claflin, 149 Mass.19;20 N.E 454;1889
Mass. LEXIS 105, January 29, 1889 Argued, March 2, 1889;
L. Reed Phillips v. Herbert L. Moeller et.al, Trustees (Estate
of Confrand A.Moeller), 148 Conn.361; 170A.2d 897;1961
Conn. LEXIS 186. Argued May 2, 1961; Whilliam Frank
SheltonIII v. Trustees of the Whilliam Frank Shelton, 343
Mo.119;1199.S.W.2d 951;1938 Mo. LEXIS 523
80
R.Chester& S.R Ziomek, Removal of Corporate Trustees
Under the UTC and Other Current Law: Does Contractual
Lense Have Clarify the Right of the Beneficiary, 67 Mo. L.
Rev. 24 (2002)
81
In this case, courts have found that if there is no good
reason such as against public policy and etc., there is no
necessity to terminate trusts even whole beneficiaries, want
so. 149 Mass. 19, 20 N.E.454., 1899 Mass. Lexis 105
82
Section 605 of the UTC
83
Supra note 8 at 35-37.
84
Alan Newman, Elder Law: The Intention of the Settlor
Under the Uniform Trust Code: Whose property is it? Any
way?, 38 Akron L.Rev. 649 (2005)
LAW REVIEW
For balancing of the interests of the
beneficiary and the intention of the settlor,
the UTC has given settlors the right to
state rules related to the removal of the
trustee in the trust terms. The Code
does not include removal issues into its
mandatory provisions.85
3.3.b Liability of the trustee for
breach of the trusts The liability of the
trustee for breach of the trust serves two
purposes: property compensation and
preventing the trustee from benefiting
personally.86 The damages for breach of
trust consist of compensation for loss of
trust property, disgourging of benefits
gained by the trustee, and restoration
of lost profit to the trust property.87 This
compensation mechanism is reasonable
both from the standpoint of equity88
as well as tort law and, can also be
established through the beneficiary’s in
personam rights against the trustee89.
Therefore, there is no potential difficulty
with liability of the trustee even in the civil
law system. But the problem is the extent
of the trustee’s liability; whether the settlor
can limit the trustee’s liability by excusing
breach of trust within the trust terms (i.e.
by use of an exculpatory provision).90
Generally, the trustee is not an insurer
of the trust property91, and an exculpatory
provision is not prohibited generally
unless it covers willful breach.92 Since
exculpatory provisions relieve the trustee
from the liability for his wrongdoing,93
which affects the beneficiary’s interest,
it is important to clearly define what is
permissible in an exculpatory provision
UTC Sect.105
85
86
Supra note 131
87
UTC Sect.1002 (a)
88
Comments on Uniform Trust Code, sect.1011 (National
Conference of Commissioner on Uniform State Laws 2005)
89
Supra note 135
90
Supra note 95 at 245
91
Hardy v. Hardy, 217 Ark. 296; 230 S. W. 2d 6; 1950 Ark.
LEXIS 412
92
Supra note 95 at 245
93
Holland A. Sulliva, the Grissle Bear Lingering Exculpatory
Clause Problems… by the Texas commerce Bank, and N.A
v. Grizzle
52
2017 5(65)
by legislation.94 Exculpatory provisions
are acceptable if they do not excuse bad
faith or recklessness, indifference to the
purpose or interest of the beneficiaries,
or abuse of a confidential relationship
between settlor and trustee95. As this
limitation on exculpatory provision is one
of the mandatory rules96 of the UTC, the
settlor can not empower the trustee on
breach of trusts without limits.
3.3.c Other methods to enforce
fiduciary duties. There are other effective
and necessary instruments serving for
enforcing fiduciary duties, such as court
intervention, and the bonding of trustees.97
Section 3.4. Conclusion from the
chapter
Absence of fiduciary legislation is
one of the reasons for increased abuses
in Mongolia, so in this chapter tried to
give general idea about the fiduciary
duties and ways to enforce them, drawing
on the example of the USA and English
fiduciary norms. Mongolia has not yet
adopted such fiduciary norms because of
the view that these duties are impossible
to be determined by statute legislation for
enforcement by the courts. But this cannot
justify the absence legal regulation and or
protection of fiduciary relationships, where
such relationships already exist in society
and in fact used as a foundation for fraud
and overreaching. Since legal regulation
of fiduciary duties fulfills both altruistic
and prophylactic functions, standards
on fiduciary duties will be useful in not
only protecting unsophisticated citizens,
but also establishing order in informal
transactions. Historically the court plays
an important role in protection of fiduciary
relationships under trusts. Working from
this foundation, constructive trusts provide
an extension of the remedial system, for
94
Richard S Saxon et.al v., Henry J Conland et. al, 188
Conn. 52:420 A.2d 198:179 Conn LEXIS 809
95
UTC Sect.1008
96
UTC Sect. 105
97
UTC Sect. 702

working justice in both property law and
fiduciary relationships, to prevent unjust
enrichment in a wider context.
Chapter 4. Constructive trust as a
remedial instrument
Section 4.1 Need for a new
approach to remedies in Mongolia
Remedial issue is primarily
concerned with money compensation,
causation of damage and faulty action
(inaction) of the defendant within contract
and tort in Mongolia. The Civil Code of
Mongolia also provides mechanisms for
confirming rights of ownership, the validity
of transactions, and for challenging unjust
enrichment. Legal owners and possessors
are protected by these mechanisms, but
other parties such as equitable owners,
who have no legal title but nonetheless
legitimate interests in particular property
are not protected by law.98 The following
example cases illustrate familiar and
problematic issues needing an adequate
remedial mechanism.
Example 1. P (plaintiff) gave to his
friend 10,000 dollars (which was planned
for the purchase of a microbus for his
private business) to D (Defendant) who
promised him to return it after a week.
D invested this money for profit instead
of returning it to the P, and decided not
to return it until forced to do so by court
decision. P was asking to him to return the
money, trying not to go the court because
98
B.Batbayar v.Gerelmaa, No.116 dated 2005.01.12,
Sukhbaatar District Court, Appeal, No 425, dated
2005.05.14 Capital Court (As a result of the privatization
spouses in registered marriage owned the building for
business purposes and established their company for
running business. Wife has taken care all matters related
to the company registration and documents and both of
spouses worked together for 12 years. When they dissolved
their marriage and husband asked court to recognize
his ownership right on 3/1 of the company’s premises
(building) and court of first instance has provided his claim,
considering that the company was property of the family.
However appeal court has canceled the decision of the first
instance and returned the case to the court for re checking
fact, revealing that there is not name of the husband in the
company document, but the name of other man, which is
the similar to husband name. So the property issue should
not be decided with marriage case, but separately as a
company deals.)
53
Legal Thinking: Views and Reflections
he did not want to breach their friendship.
Finally, after 2 years, D sued and the Court
awarded him the amount of money which
he transferred to the D as his damages.
But P ‘s real loss is more than 10,000,
because if he had been able to buy a bus
2 years ago, he could have used it to earn
money. Also, a bus now costs not 10,000
dollars but 12,000 dollars. On the other
hand, D has gained 4,000 dollars from his
investment using P’s money during the 2
year period.
Example 2. P (plaintiff) has given
money to the Loan & Saving Cooperative
”D” (defendant). The director of D has
spent all this money in a Casino and is
now bankrupt. P can not recover from
D. He knows that the money went to the
casino, but he can not recover from the
casino under current law.
This issue could be resolved in the
common law system by a constructive
trust remedy, which is an instrument
for providing a right to reclaim back the
property from other’s illegal possession
and prevent unjust enrichment. In the
author’s opinion, the constructive trust
provides a more systematical approach
in providing remedy for unjust enrichment
and breach of confidential relationships,
which is mediated by the equitable
jurisdiction of the court.
This analysis will be done through a
comparative description of constructive
trusts with careful accounts of differences
in Mongolian legal system with respect to
ownership and sources of law.
Section 4.2. Constructive trust
concept in common law
4.2.a. Function of employment of
constructive trusts. Constructive trust is
understood as a fictional trust constructed
by the court for working justice.99 But
according to Scott, the constructive trust
is a remedy for “construing” a trust
99
Supra note 95 at 208
LAW REVIEW
relationship100, and he has mentioned
that the constructive trust has no similar
characteristics to the express trust,101 as a
management instrument. The constructive
trust is a remedial instrument but not a
regulatory mechanism. This remedial
instrument is called as “constructive
trusts” because of its origin in the law of
trusts, in which the court imposed “trusts”
as a remedy for breach of fiduciary
duty102 and now its use extends to unjust
enrichment103.
In common law courts, the main
purpose of constructive trusts is to
restore justice104in property relationships
reached by providing a plaintiff with a
tracing right105 and taking away gains of
the defendant, thus preventing unjust
enrichment106. Since the civil law of
Mongolia does not recognize these tools
of common law it is worth discussing them
to explore their potential advantages.
4.2.b Tracing right of the plaintiff.
Through a constructive trust the plaintiff
is able to follow specific property until it
is obtained by a bona fide purchaser for
value without notice of the rights of the
plaintiff.107 Plaintiff can also reach cash
or property received in exchange for the
property, from the defendant or from the
non bona fide subsequent transferees,108
using his tracing right (the plaintiff must
identify the property109 in both cases).
Although the original owner’s
property right is protected by the traditional
principles of property rights, that is ”no one
100
Supra note 32 at 3410
101
Id.
102
W.J.Mowbray, Lewin on Trusts 141 (16 th ed., 1964)
103
Emily L. Sherwin, Restitution and Unjust enrichment;
Restitution and Equity. Analysis of the Unjust Enrichment,
79Tex.L.Rev. 2083 (2001)
104
Supra note 95 at 3415 208, Supra note 32 at 3415
105
Supra note 32 at 3415
Anthony Duggan, Constructive Trusts from a Law and
106
Economic Perspective, 55 Univ. of Toronto L.J. 217 (2005)
107
Supra note 32 at 3422
108
Supra note 158
109
Supra note 95 at 223
54
2017 5(65)
can transfer greater title than he owns”,110
a bona fide purchaser is exempted from
this rule, where good faith of the bona fide
purchaser gives him a right against the
titled owner of the property. This exception
is justified by the commercial need for
security of transactions.111 According to
general trust principles, the identity of the
property can be established even if it is
money mixed with defendant’s money in
one bank account or fund,112 a remedy
unavailable in the civil law tradition.113
A tracing right provided through a
constructive trust gives the plaintiff the
following advantages:
• To have a right to trace actual
property against non-bona fide acquirers
• To have priority over other
creditors of the defendant114, as an
equitable owner115
• To reach all gains taken by the
defendant using plaintiff’s property,116
since the all gains using trust property are
considered trust property117.
4.2.c. Unjust enrichment . Not
only opinions of scholars but also judicial
practice118 is very diverse on the grounds
for the relief using constructive trusts.
For example, according to the Bogert
the ground for every constructive trust
is fraud,119 unconscionable or unethical
conduct120, while Scott considers not only
110
Linsay Ellis, Comment: Symposium: Lousiana Property
Law Revision: Transfer of Moveables by a Non Owner, 55
Tul.L.Rev. 145 (1980)
111
Id.
112
Donovan W. M Waters, Liability and Remedy: An
adjustable Relationship, 64 Emory L.J. 153 (1996)
113
Id.
Christopher T. Wonnel, Replacing the Unitary Principle of
114
Unjust Enrichment, 45 Emory L.J. 153 (1996)
115
see Chapter 2.c.1 of the thesis
116
Grace M. Long, Commentary: The Sunset of Equity:
Constructive trusts and The Law of Equity Dichotomy, 57
Ala.L.Rev. 875 (2006)
117
See section 2.1. of the thesis
118
Harris v. Sentry Title Co., Inc., 727 F.2d 1368, 1369 (5th
Cir. 1984) (constructive trust is refused because of absence
of fiduciary relationship(
119
Supra note 95 at 4
120
Supra note 95 at 22

fraud but also mistake to be a reason to
impose a constructive trust.121 Hayton
and Marshall noted that constructive
trusts are an equitable instrument used
to prevent statute law from being used
as an instrument of fraud.122 But all of
these authorities consider that the main
grounds for imposing constructive trusts
are unjust enrichment, which covers
all of above mentioned categories. So
it is considered as the most important
function of the constructive trusts123
because of two reasons: 1)plaintiff should
be compensated for losses caused by
the defendant;124 2) defendant should not
be permitted to profit from losses caused
by his own actions.125 These issues are
not handled well in general civil liability,
which focuses on harm to the plaintiff
and its connection to the fault of the
defendant.126 Munkhjargal notes that the
conditions for civil liability are 1) action
(inaction) of the tortfessor, 2) damage
to the plaintiff, 3) causation between
damage and action (inaction), 3) fault of
the tortfeasor127. From this description of
the conditions, it is clear that the focus
is on damage to the plaintiff and main
function of the civil liability is eliminating
harm, but not preventing wrongdoings, so
there is no liability without satisfaction of
these conditions.
Section 4.3. Property remedial
system in Mongolia
4.3.a. Historical background
and general principle. Historically, the
property law issue is one of the weak points
121
Supra note 32 at 3412, 3417
122
Supra note 50 at 330
123
Supra note 171
Ken Kooper Stephan, Section1: Reparations: Theoretical
124
Underpinnings for Reparation: A Constitutional Tort
Perspective, 22 Widsor Y.B. Access, June 3, 2003
125
Supra note 169
126
Id.
127
T.Munkhjargal, Mongol Ulsiin Irgenii erkh zui (erunkhii
angi) [Civil law of Mongolia, (General part)] 191 (2003),
see also B. Battumur, Mongol Ulsiin Irgenii erkh zuin zarim
asuudluud [Some problems of Civil Law of Mongolia] 155
(2005)
55
Legal Thinking: Views and Reflections
in Mongolia, since the understanding of
property was quite different from settled
society due to the nomadic life of the
population. Most property relationships
were regulated by customary norms,
although there were some legal norms
in property for certification of customs128.
For example in the 12th the century, “Ikh
yasa”129 contained provisions about rights
and duties of the possessor of stolen
and lost cattle, original owner, and bona
fide purchasers.130\ In the 17th century
“Khalkha Juram”131 also regulated the
relationship between the possessor of lost
cattle and the original owner.132
A more systematic approach to
protection of property rights appears
from the first Civil Code of 1926 and
in the Codes of 1952, 1964. 1994 and
2002, which have their own specific
characteristics, and attracted social
changes and implemented state policy
in the property sphere. For instance the
Civil Code 1994 protected the absolute
right of the original owner against a bona
fide possessor133, but the Civil Code
2002 recognizes rights of the bona fide
possessor against even the original
owner134. This shows that legislation is
changing in order to encourage market
transactions and guarantee fairness to
128
T.Munkhjargal, Mongol Ulsiin Irgenii erkh zui (Erunkhii
angi) [Civil Law of Mongolia (General Part)] 31 (2003)
129
43 Valentin A Riasanovsky, Fundamental Principles of
Mongol Law 25 (Uralic and Altaic Series, Curzon. 1965)
(Great Yasa” was a written document promulgated by
Chingiz Khan, which is the best known and most ancient
of Mongol Laws)
130
Id.,at 25 (Uralic and Altaic Series, Curzon. 1965) ( In “Ikh
yasa”, there was a provision stipulating that “ … The man in
whose possession as stolen horse is found must return it to
his owner and add 8 horses of the same kind”, “… the owner
of the stray cattle had the right to reclaim… it in presence
of the reliable witness …, but if the cattle were found in
the possession of one who hade come by the bona fide
purchase, original owner was entitled to only the for the
better part of the carcass, while the buyer was given the
rump the interior part”, which are evidencing the principle of
property reclamation)
131
Id., at 57 (Uralic and Altaic Series, Curzon. 1965)
(“Khalkha Juram” is … unpublished code of customary law
of Northern Mongols (1709))
132
Supra note 183 at 32
133
I.H Art. 154 (1994)
134
I.H Art. 90
LAW REVIEW
participants.
The general civil law principles,
such as sanctity of property, recovering
of a breached right, and court protection
are recognized by the Civil Code by the
following methods, which apply to those
who already have legal title to particular
property:
• Owner’s right to reclaim an asset
from other’s illegal possession;135
• To recognize a right (admitting
right);136
• To stop action that violates
rights137 and to restore to a previous
condition (halting acts violating the
rights and restoring the pre-violation
conditions);138
• Compensation of damage.
Currently, the right to recover specific
property from another’s possession is
regulated by two different institutions
in Mongolia according to the civil law
systematization:
• Vindicate claim, which is included
in property relations;
• Recovery of unjust enrichment,
which is based on obligation.
4.3.b. Vindicate claim of owners.
This right is considered as a property
claim,139 where the legal owner of
the property has a right to claim back
the property from another’s illegal
possession140 The precondition for the
claim is that the plaintiff is the owner of
the property, defendant is the possessor
of the property and that the possessor has
no legal title on the property.141
Whether a “fair” possessor has this
right is not clear from the new legislative
135
I.H 106.1.
136
I.H 9.4.1.
137
I.H 106.2.
138
I.H 9.4.2
139
Supra note 183 at 149
140
Yo.Kayut et.al., Mongol Ulsiin Irgenii khuuliin tailbar
[Commentary on Civil Code of Mongolia] 425 (GTZ. 2006)
141
Id. at 425
56
2017 5(65)
description.142 The legal owner is the
person who has legal title on that property,
but a “fair” possessor is a person who
lacks title, but obtained the property in a
legal way.143
The analysis of ownership and
possession claims under the Civil
Code can be complicated because of
its conflicted norms and mixture of the
different categories such as “legal” and
“fair” owner. For example Article 90.1 of
the Code stipulates that “A person, legally
possessing an asset or having definite
possession entitlement to the property,
shall be fair possessor”; Article 93.1 that
“A property shall not be demanded from its
legal possessor”; Article 94.1 that “A fair
possessor not entitled to such possession
or who loses rights in the property shall be
responsible to return the property to the
authorized person”. These provisions are
from one side clearly mixing the “legal”
and “fair” possessor, but from the other
side they are stipulating different rights
and duties to each type of possessors.
The differences between “legal” and “fair”
possessors are seen in many article of
the Code, the main difference related to
the property claim right is mentioned here.
So it is very important to have at least
theoretically and logically acceptable144
clear distinction between legal or titled
owner and fair or bona fide possessor.
4.3.c. Unjust enrichment. The
obligations arising from unjust enrichment
are divided into three types,145 each with
different consequences:
1. Obligation arising from the
groundless acquisition and possession of
another’s property;146
2. Obligation arising from the illegal
disposition of another’s property147 ;
142
I.H Art. 90.2., Art. 90.3
143
Supra note 195
144
Id., 149 “legal owner is always fair, fair possessors not
always have entitlement on the property”
145
I.H Art. 492, Art.495, Art.496
146
I.H Art. 492
147
I.H Art. 495
 Legal Thinking: Views and Reflections

3. Gains accruing to funds obtained this article to cover such a plaintiff’s right.
from another148. Scope of claimed property154 consists
The obligation from illegal disposition of:
of another’s property and the obligation to • Transferred property;
restore gains accruing to funds obtained
• Income and benefit from the
from another are new forms of unjust
property;
enrichment.
• If the property no longer exists,
1. Obligations from the possession
other things taken in exchange for the
and acquire other’s property groundlessly,
property;
may arise from any of the following three
grounds: • Costs of the property if the
property cannot be returned.
The plaintiff has transferred property
to a third party to perform an obligation Plaintiff can trace property to a third
to his own obligee, and it is subsequently party who received it free of charge.155
determined that no obligation exists.149 This is also one of the points which need
This provision seems too strict, since the interpretation of the Supreme court.
plaintiff needs to prove impossibility of 2. Illegal disposition without consent
his obligee to claim the property. On the of the legal owner or possessor may take
other hand this provision is breaching the following forms156:
the principle that “this thing is mine… • using another’s property;
therefore you must give it to me”150; • mixing property it with other
The plaintiff has transferred property assets;
with the desire that another act or refrains • consolidating;
from acting, but the desired result is not
reached or is inconsistent with his desire151. • reprocessing.
This provision addresses one of the Remedy: The plaintiff has only the
important issues in the current economic right to compensation for damage and
situation, where most transactions are loss of income from the disposition, but
carried in an informal way and in the no absolute right to the property itself
absence of sufficient regulation for the (vindicatio).157 A claim based on unjust
protection of fiduciary relationships;, but enrichment can be defeated if it is shown
courts are not using this article due to that the defendant is not at fault and has
their preference for documented or formal no knowledge of the plaintiff’s underlying
relationships;152 claim.,158Knowledge of plaintiff’s
The plaintiff has transferred property underlying claim will give a rise to a right
because of illegal deception or threats.153 in the plaintiff to demand profits over
The problem is whether the plaintiff who damages.
did not transfer the property can claim 3. The person who benefited from
back the property. For protecting such the plaintiff’s disbursement into his
person’s right it would be desirable to issue obligation or contribution to his property:
Supreme court interpretation recognizing • the defendant exempted from the
debt because the plaintiff has paid it;
148
I.H Art. 496
149
I.H Art.492.1
• the defendant is enriched
150
Lionel Smith, Restitution and Unjust Enrichment.
Restitution: Heart of Corrective Justice, 79 Tex.L.Rev. 2115
154
I.H Art. 493.1.
(2001) 155
I.H Art.493.
151
I.H Art. 492.3 156
I.H Art.496.1.
152
Supra note 153 157
I.H Art. 495.1, Art. 495.3.
153
I.H Art. 492.5. 158
I.H Art. 495.4

57
LAW REVIEW 2017 5(65)

because the plaintiff contributed to his
property.
The remedy is reimbursement of the
plaintiff’s expenses.
From the legislative description of
unjust enrichment, the consequences
are diverse as follows depending on the
forms of the enrichment and availability
of restitution:
• returning property;
• compensation of damage;
• reimbursement.
These unjust enrichment rules show
that the Code concerns plaintiff’s loss
rather than defendants gain obtained
through unjust enrichment, following the
strict definition of the unjust enrichment
rule.
The sphere of unjust enrichment
seems too narrow in this legislative
formulation, however in practice its
applicable scope is not limited by only
these three conditions. For example,
according to academic interpretation159
and judicial opinions,160 restitution
following an invalid transaction 161 is a
main ground for imposing an obligation
for unjust enrichment, but from the current
law provisions it is not included as a
ground for such obligations 162.
Section 4.4. Judicial power
in recovering justice in property
relationship
The main instrument to recover
fairness and justice in property
relationships is of course the court. Since
the court is the last and most powerful
means to protect property rights and
recover violated rights, it is necessary to
look at the judicial power in this respect. As
mentioned before,163 the constructive trust
159
Supra note 195 at 239
160
Unofficial interview with L.Saranchimeg, Chief Judge of
the Chingeltei district of Monoglia, (Nagoya, Nov.8 2006)
161
I.H Art.56.5.(… parties are obliged to return all the things
taken by the transactions and if impossible their costs)
162
Supra note 195 at 217
163
See at 4.2.a.
remedy is based on the equity jurisdiction
of a common law court. But how does
constructive trust principle apply in civil
law courts.
Positive laws and courts. In the
Mongolian system, courts have no power
of lawmaking, therefore it reaches justice
by its decision in individual cases, as the
guarantee of justice164. Courts are obliged
to be subordinated to only law,165, so
judges make their decisions strictly within
the framework of the legislation.166 But it
does not mean that courts can not make
any decision if there is no legislation on
matters, since courts are obliged to
solve disputes between citizens and
are not permitted to abandon cases on
account of an absence of legal norms and
principles167.
In Mongolian jurisprudence courts
can not refuse to use the laws which they
consider unjust or inconsistent with moral
norms.168 These rules show the hierarchy
of the court power and positive law
norms and clearly express the absence
of the legislative power of the court. But
it seems that applying laws which the
judge considers unjust is against the
principle that “the Court is the guarantee
of the justice”. However, if a judge
identifies inconsistency with the norms
of the Constitution, he may suspend the
procedure and make suggestions to the
Supreme Court. The Supreme Court may
transfer the request to the Constitutional
Court.169 However, there were no recorded
cases in which a judge has yet used this
right.170
164
Shuukhiiin tukhai khuuli [Law on Court] art.2 (Mong.)
165
Irgenii hergiig shuukheer hyanan shiidverlekh tukhai
khuuli [I.H.S.H.H] [Civil Procedure Code] Art.5.2 (Mong.)
166
Wayne R. Barne, Contemplating a Civil Law Paradigm for
Future Iinternational Commercial Code., 65 La.L.Rev. 677
(2005)
167
I.H.S.H.H Art. 10.6
168
I.H.S.H.H Art.494
169
I.H.S.H.H 10.3 of CPCM
170
L. Lundendorj, Shuukh zasaglaliin khyamral [Judicial
power crisis], http://gateway.mn (visited October 20 2006)

58

The court decision should be legally
and factually well grounded.171 In this
formulation, a decision which differs from
previous decisions on similar facts172
can be considered “well grounded”. The
application of general legal principles and
theory will tend to foreclose the possibility
of making different decisions on similar
facts, thus making court decisions more
logical and understandable to the public.
Courts therefore have an incentive to
apply general theory and principles;173
however our legislation is silent about this.
The Constitution grants the Supreme
Court interpretative power over laws
other than the Constitution, and the
courts of lower instance are to follow its
interpretation. Thus, Supreme Court
interpretation can be a good means of
for bringing about more just and realistic
decisions. The application of principle and
theory and using them in decisions help to
provide grounds for the court decisions174
in addressing new problems, where the
legal system is undergoing extensive
reform.
Since Mongolian civil procedure is
based on the adversarial principle, court
decisions should be more based on
practical need than formality175, because
giving preference to formality by the court
will encourage abuse of the law .
In judicial practice there is almost
no reference to international agreements
or Constitutional principles in civil law
171
I.H Art.116.
172
“K” Bank v. citizen “D” and “B” No 332, dated 2004.04.28
Sukhbaatar district Court , appeal No 515, dated 2004.05.25
Darkhan Uul aimag court, “KH” bank v. citizen “C” No 359,
dated 2004.05.19 Sukhbaatar district court Shuukhiin
shiidevriin emkhtgel [Bulletin of Court decison] No.1 (2006)
at 36 and 54 (in both of cases the third party, who actually
used the loan funds asked court to become a defendant in
spite of the borrower, court has approved this request in one
case and refused in another one).
173
Supra note 225
174
Id. (According to the Survey on question ”what do you
lack in your job” covereing 270 judges, 65.7% answered
“professional skill”, 75.0 % answered “theoretical knowledge”
and 46.6% answered “professional ethic”,)
175
Supra note 153 (The court of appealed instance
invalidated the first instance court decision because of
absence of name of the husband in the company document)
59
Legal Thinking: Views and Reflections
cases, which shows that either the laws
are excellent, or that courts are placing
disputes into the framework of the law
by force. Courts should be more willing to
rely on legal principles, especially when
the quality of legislation is questionable.
For according to the Civil procedure
law,176 the following elements beyond the
boundaries of the Civil and Civil procedure
Code are to be taken into account in
judicial decisions:
• Constitution and related to the
cases law (apply directly the provisions
of Civil Law);
• Provisions regulating similar
relationships;
• Principles of Civil Code (equal
rights and autonomy of the participants,
sanctity of property, contract freedom,
non-interference into personal affairs,
exercising civil rights and obligations
without limitation, recovering of breached
right, and court protection)177;
• Constitutional principles.
(content, general principle and concept of
the Constitution);
• International standards and
customs in relation where foreign element
is involved.
Section 4.5. Conclusion from the
chapter
In Mongolian law, civil liability
arises from contract and tort, and the
requirement for imposing liability is fault of
the defendant, damage to the plaintiff and
causation; if any of these elements fail,
liability becomes impossible178. But the
constructive trust offers a more flexible
remedy, since fault and causation are
not required, and the focus is on the loss
from the plaintiff and unjust enrichment
to the defendant. This principle should be
176
I.H.S.H.H Art.10
177
I.H Art.1.2.
178
Supra note 202 at 191-192., B. Battumur, Mongol Ulsiin
Irgenii erkh zuin zarim asuudluud [Some problems of Civil
Law of Mongolia] 78 (2005), B.Ulaanbaatar. Irgenii erkh zui
(erkh zuin toli bichig) [Civil Law (Legal Dictionary)] 67 (2005)
LAW REVIEW
taken into account in both judicial and
legislative decision making for protecting
property rights of bona fide participants
and preventing unjust enrichment. From
the comparison of constructive trusts and
the remedial system of Mongolia, the
following issues need more clarification for
development of Mongolian civil remedial
system, which can guarantee protection
of property right of the participants of
economical and civil relationships.
1. The scope of unjust enrichment
should be broadened to give courts the
capacity to restore justice in property
relationships, prevent unjust exploitation
of legal tools and breaches of fiduciary
duty.179 Both legal owners and equitable
ownership should be protected180 by the
courts. Those who have equitable rights
(who are equitable owners in common
law) cannot protect their rights under
current provisions on the confirmation of
rights and unjust enrichment.
2. The status of bona-fide purchasers.
New code provisions which strengthen
the position of purchasers on credit are
consistent with international standards,
but additional factors should be taken into
the account in the relationship between
179
B.Batbold v. N.Enkhmaa no.179, dated 2006.07.19 the
Chingeltei district court, (Spouses in de facto marriage
established Company A, where wife’s father, wife and
husband have equal share and also Company B where wife
and husband has equal share. After 7 years cohabitation
spouses are separated. But in separation they agreed on
followings orally:
 wife promised to help him obtain visa and go to
USA and give husband 26000 USA dollars.
 Husband signed on the company documents
to transfer his share of Company A to wife’s
brother and of Company B to wife, where his
main purpose was to go to USA with help of
wife.
After giving agreed sum wife has canceled all
connection with husband. Husband claimed to the court to
recognize his right in the Company A and B on the basis
for the transfer of the shares where the promise of the
wife which is not fulfilled. Both of courts of first instance and
appeal refused his claim, basing on the that husband has
given his consent on transfer of the Companies’ shares,
since he has duly signed the necessary documents. In this
case if the court had alternatives to solve the issue, where
the results are different. If the court considered that the
husband’s property right is really breached, it could use the
article about the unjust enrichment or articles about invalid
transactions)
180
Id.
60
2017 5(65)
plaintiff’s and bona fide purchaser’s
property rights, such as place and costs
of the purchase, and the position of the
seller. Obtaining property on credit cannot
be the only requirement for determining
good faith.
3. Courts should ignore unjust
legislation. For resolving these problems
it is necessary to make a more detailed
study on balance or comparison between
the principles of legality and of equity
or justice when they are in conflict.
Mongolian laws relating to property need
to be carefully reviewed to determine
whether they conform to the justice
principle.
4. Rules related to the vindicate
rights of an owner should be more clear,
especially the provisions related to “legal”
and “fair” owners and possessor should
more logical and there must be good legal
interpretation on this issue.
6. It is impossible to determine all
details of the civil relationships, since
they are changing constantly, so the code
should give only a set of standards and
principles for making just decisions in
court.181 Positive law rules should be more
general for actualizing the law in life and
filling gaps of the law by court decisions.182
For example, the unjust enrichment
provisions of the new Civil Code show
the opposite position compared with
provisions of former law.183
RECOMMENDATION
With adoption of the new Constitution
of 1992 granting private ownership rights,
legal reform in the sphere of commercial
and economic activity has begun. Although
the government is making efforts to build
the necessary institutional and legal
structure for the development of a market
economy and providing human rights with
181
Supra note 221
182
I.H Art.129.8. (courts will decide the part and size of the
property)
183
I.H Art.396. (1994), Art.495.

the assistance of international donors and
organizations, people are still suffering
many problems with current legislation,
such as lack of harmonization, and failed
or flawed implementation of legislation.
One of the most vital and important issues
seeking proper regulation and protection is
the property management and fraud issue,
which is connected to many aspects of
civil, commercial and civil procedure law.
For this reason this thesis has focused on
“trust” concepts which are184 one of the
possible ways to help people effectively
manage and benefit from their assets and
develop the financial sector in Mongolia.
Since conclusions and recommendations
on improvement of the property legislation
are given in each chapter of the thesis,
the following conclusions are connected
to the most general issues.
From this research it is recognized
that the trust institution is closely
connected to institutional and legal
structure of the particular country and is
being developed in each on a specific
path depending on local economic and
commercial conditions. Therefore direct
transplant of common law trust institutions
for property management and commerce
in Mongolia is problematic due to its young
and undeveloped economy, lack of legal
and institutional infrastructure, especially
law on the property management and
financial activities as well as incoherence
in bankruptcy, civil procedure, and contract
enforcement.
But the fundamental principles of
trusts related to the holding of another’s
property and protecting fiduciary
relationships can help to address issues
which are not regulated or protected
by the strict civil law rules of Mongolian
legislation in the following ways.
Standards on holding and
administering trust property, such as
184
For example Asian Development Bank included “drafting
and submission of trust law” as one of the obligations of the
Mongolian Government in performance of the Agreements
on “Financial Sector Development Program II” www.adb.
org/Documents/TACRs/MON/tacr-mon-3459.pdf
61
Legal Thinking: Views and Reflections
recordkeeping, accounting, separation of
the property from the trustee’s patrimony,
prohibition of set off will be useful and
practical to control and benefit from the
property under another’s management
and enhance the possibility to identify the
scope of the property of the beneficiaries
in civil relationships having similar
characteristics to the trusts. The rules on
identifying the scope of trust property will
make proof of ownership rights and of
interests in the particular property easier,
and help to control behavior of the trustee.
Rules related to the trustee’s
fiduciary duties can be a guideline to the
parties who enter into relationships based
on mutual confidence. Such rules also
serve a prophylactic function, helping to
discourage malfeasance.
Finally the courts, as a last recourse
of those seeking to pursue their rights,
should have these tools made available
to them. These must be based on proper
legislation, and principles of justice and
equity. Although court activity is based on
the adversary proceeding, and the court
is recognized by the law as a provider of
justice, Mongolian courts are criticized for
being stiff in pursuing justice and equity,
because of the excessive formalism of
both foreign and Mongolian experts.
Application of constructive trust principles
related to tracing rights of constructive
beneficiaries and a more robust approach
to unjust enrichment in the property
remedial system of Mongolia possibly can
change the formalistic approach of the
courts, adapting to the informal habits of
Mongolians. Although formalism makes
relationship more clear, it should not
frustrate people’s rights in property.
The legal owner’s right is relatively
well protected under the current civil law
mechanism on tort and contract liability,
property claims and unjust enrichment; but
other parties, such as beneficial owners
and spouses in a factual relationship are
not protected by the legislation. The above
noted trust principles, especially the
LAW REVIEW
constructive trust remedies focusing on
loss of plaintiff and benefit of defendant,
offer more possibility for these parties to
obtain relief.
For deepening of the research on
the possible application of trust principles
in Mongolia, it is worth to explore the
following issues related to the property
protection:
• Merit and demerits of the remedial
forms: restitution; vindication of property
claims; and loss of income.
---o0o---
62
2017 5(65)
• The general impact that trust
principles have on civil and economic
relations, the legal mentality of the
population, and judges and lawyers;
• The relation between legal
principles and legal norms, including the
impact of theoretical general interpretation
on court decisions and legislation;
• Creditor’s property rights,
trustee’s duties and role of the court in
bankruptcy proceedings, as a practical
instance of application of the trust
principles Mongolia.

SPECIAL FEATURES OF THE LEGAL ACT OF MONGOLIA
DURING A PERIOD OF MANCHU CHIN
Jargalsaikhan B. Lecturer of
“Ikh Zasag” International University, Mongolia
KEY WORDS
Small nation, Government House,
Custom
ABSTRACT
The Nations issue of Mongolia
was solved by Manchu Chin state’s
government with approving national
legislation respecting Mongolian national
customs and regulating relationship
between Manchu Chin government House
and Mongolians in order to strengthen
Manchu Chin’s rule and implement the
law among the small nation.
In the article: Some legislations
of Nation which were implemented
by Manchu Chin government among
Mongolia were introduced and also it was
expressed easily about historical value
of united country that was established by
many nations together.
INTRODUCTION
The Nation’s issue was solved
by Manchu Chin’s government with
implementing national state policy, using
completely legal methods and regulating
63
Legal Thinking: Views and Reflections
relationship between Manchu Chin’s
government House and Mongolians in
order to strengthen Manchu Chin’s rule
and enforce the law among the small
Nation. There were two features of
Nation’s law implementation adopted by
Manchu Chin in Mongolia.
First, Sources Law of Mongolia.
This law which was involving the primary
content of Source Law of Mongolia was
implemented.
Second, State policy to restrict
the Nation was implemented during the
enactment.
Main section
First
The primary content of Sources
Law of Mongolia was remained and
implemented.
One. Rights of Mongolian nobility
were protected. Due to Manchu Chin
ruled Mongolia through Mongolian nobility
their privilege and feudal status were
protected. The privilege and feudal status
of Mongolian nobility were legalized and if
someone attacked their reputation he or
she could be punished. Such articles were
shown up more often in criminal laws.
Nobilities who killed someone intentional
or accidental should be sentenced to pay a
fine of livestock without legal proceedings.
Servants who killed their lords should be
hanged. Commons who defamed nobles
should be sentenced to pay a fine of
livestock. Commons who dug nobles’
grave should be hanged and their family
should be beaten with a stick 100 times,
sentenced to pay a fine with animals and
sent to work.
LAW REVIEW
Two. There were heavy penalties
of theft for protecting livestock and
properties. There were two features of
criminal law in Mongolia during Manchu’s
rule.
1. Penalties of criminal offences
were heavy comparing with an inner
country (China).
2. There were many articles about
livestock theft in criminal law and its
content was accurate.
Law of State Ministry of Outer
Mongolia (about theft) had upper and
lower chapters. Major parts of this law
were about the punishments of livestock
theft and sentences depended on types
and number of livestock and vehicle.
“Fines were four types of livestock such
as cows, horses, camels and goats. Four
goats were equal to one cow or one
horse, or one camel. If the punishment
for livestock theft is light (stolen only one
or two animals), a head of the criminal
offence shall be beaten with a stick one
hundred times and kept in chains for one
month according to the Article 1129 of
Law of State Ministry of Outer Mongolia. If
the criminal stole the livestock alone and
the others used it after the theft, partners
in crime should be beaten with stick 90
times.” According to the Article 1133 of
Law of State Ministry of Outer Mongolia,
a person convicted of committing the
offence of theft of more than 20 animals
should be sentenced for death penalty in
the end of autumn and until the autumn
the criminal should be imprisoned.
When it became autumn if the previous
punishment could be believed light, the
criminal might be banished to Hokhuwan
and Fujen which had bad and unpleasant
weather. According to the Article 1138 of
Law of State Ministry of Outer Mongolia,
a person convicted of committing the
offence of theft of dog, pig and chicken
should be sentenced to pay a fine.
3. The types of punishments of
criminal law of Mongolia including death
penalty (to execute by cutting, stretching,
64
2017 5(65)
and hanging ), banishing, imprisonment,
beat with stick and paying a fine were
same as punishments of inner country.
These punishments had the following
features:
A. A sentence to pay possessions
was inherited and kept in the criminal law.
Mongolia had nomadic lifestyle and 5 types
of livestock were their main possessions.
Because of that a livestock theft was one
of the criminal offences and the penalty for
that was payment of animals. Mongolians
worshiped the number 9. There were fines
with 9 animals because of Mongolian
worship the number 9.
9 animals included 1 horse, 2 cows,
3 milk cows, 2 goats, 2 calves in its second
year. And there were fines with one 9, two
9, three 9, four 9, five 9, six 9 and so on until
nine 9. Mongolian administration nobles
were paid by Manchu Chin Government
House1. It was legalized that nobles who
commit a crime should be sentenced to
pay a fine with animals and gotten a wage
cut.
Mongolia was given the right to
amend the law of Central State by Manchu
Chin government House. Punishments of
inner state included banishing, going into
the army, appointment to the border2. For
example there were appointments to the
north east of Mongolia and Shinjan of
China. But the appointment to the border
in Mongolia was very different and more
difficult than the appointment to the border
in China. According to the Law of State
Ministry of Outer Mongolia, a convicted
person with heavy punishment should
be banished to the Eanung, Khuijwu,
Guandun and Guanshi which had the bad
and unpleasant weather and a convicted
person with light punishment should be
banished to the Khokhuwan, Fuze, Fujen,
Jensh, Jejen and Jenen.
1
刘广安, 中国古代民族自治研究(М)北京. 中央民族大学出版
桂, 2009, (103-107)
2
刘广安, 中国古代民族自治研究(М)北京. 中央民族大学出版
桂, 2009, (103-107)

For instance, according to the
Article 1115 of Law of State Ministry of
Outer Mongolia a leader of robbers (no
more than three people) who robbed and
stole possessions should be banished to
Yenung, Khuijou, Guandun, Guwanshin
which had the bad and unpleasant
weather and other accomplices should
be banished to Khokhuwan, Fuze, Fujen,
Jensh, Jejen and Jenen.
According to the Article 1116 of Law
of State Ministry of Outer Mongolia noble
who killed someone while robbing and
stealing things or noble who was joined
with other people robbed possessions
without killing someone should be beaten
with a stick one hundred times, kept in
chains for two months and should be
demoted.
Two. A State policy to restrict the
Nation was implemented during the
enactment.
Manchu Chin government exploited
and prevented Mongol nation while was
ruling Mongolia. Manchu had enacted
laws that restricted administration rights of
Mongolia, relationship between Mongolia
and foreign countries, and relationship
between Mongolia and China nation. A
person who travelled abroad could be
sentenced to a death penalty. According
to the Chapter 34 of Law of State Ministry
of Outer Mongolia if someone wanted to
go abroad, he or she had to inform his or
her province administration. If that person
went abroad without informing, a ruler
of this province should be sentenced.
A person who escaped abroad should
be sentenced to a heavy punishment.
There was an order about the escaped
people. It was enacted in this order that
if the escaping people protested with
weapon, all escapees had to be executed.
If escapees protested without weapon,
a leader of these escapees should be
executed by stretching. An escapee who
injured someone should be executed and
an escapee who didn’t injure someone
65
Legal Thinking: Views and Reflections
should be sentenced to pay a fine. An
escapee who didn’t injure someone and
came back yourself should be beaten with
a stick 100 times and sent to his or her
lord. The relationship between Mongols
and people of Inner country (China) was
restricted. If Mongols came into Inner
state (China), they had to pursue rules of
Inner State. If Mongols wanted to travel to
Inner State, they had to get a permission
document in Military Ministry and the
number of guides was stated. Mongols
traveled without a permission document
could be punished.
It was enacted that Mongols shouldn’t
go abroad and get in touch with each other
in order to restrict the relationship between
Mongols, protect to consolidate force and
reduce disputes between groups.
Although the state policy to restrict
the nations’ rights was implemented, the
relationship between people of Mongolia
and China broadened and people of two
countries got married much due to their
necessities of life.
According to the Chapter “men
marry Mongolian women” of Law of State
Ministry of Outer Mongolia citizen of Inner
state (China) should not marry Mongolian
woman. If Mongolian woman married a
citizen of China, she should be divorced
and sent to her homeland. And Mongolian
man who married citizen of Inner state
should be kept in chains for 3 months,
beaten with a stick 100 times and sent
to his homeland. However these cases
might be decided according to the law
about administration nobles.
If a citizen of Outer Mongolia cheated
a woman of Inner state, brought her in his
home and married her, a leader of this
case should be executed by stretching
in the end of autumn and accomplices
should be beaten with stick 100 times and
sentenced to pay a fine with three times 9
animals.
Manchu Chin government House
restricted the relationship between
LAW REVIEW
Mongolian and Chinese people, and
protected to bloom Chinese culture in
Mongolia, to become Buddhist monk, and
to speak Chinese in Mongolia.
Three. Historic events of Nation’s
legislations which were implemented
by Manchu Chin government among
Mongolia
1. In order to strengthen their rule
among Mongolia Manchu Chin State
government took following measures:
According to reality of Nation, different
types of legislations were implemented.
Mongolia was given the right to
administer Nation and to implement their
laws by Manchu Chin government House.
Special rights and status of Mongolian
nobles were protected by laws. Mongolian
nobles were given the right to decide
themselves. Manchu Chin government
restricted Mongols to strengthen their
authority, the relationship between
Mongolian and Chinese people and the
relationship between Mongols and people
of foreign countries. A Relationship
between Mongolian groups was enacted
by Manchu Chin government.
2 According to reality of Nation,
different types of legislations were
implemented. Manchu Chin’s government
implemented state policy of Nation,
decided Nation’s problems according
to law and regulated relationships
between Manchu Chin government and
Mongols legitimately in order to improve
state control and law enforcement. The
National legislation that was enacted by
Manchu Chin’s government suited well
to features of Mongolian life. Because of
that a Manchu Chin’s feudalists had the
opportunity to develop their rule among
Mongolia and showed their opinions to
become one united country.
National legislation respecting
national custom was enacted and the unit
of the state legislation was ensured. This
national legislation regulated relations
66
2017 5(65)
between central laws of Manchu and laws
of Mongol nation due to the meaningful
legislation of Manchu Chin. Manchu
Chin had legalized that if a citizen of few
nation (Mongolia) committed a crime, he
or she should be sentenced according
to the laws of Manchu Chin. If a citizen
of Mongolia who belonged to the State
Ministry committed a crime, he or she
could be sentenced for other categories
of laws. Some categories of Manchu
Chin state laws were directly enacted.
For example, (in the article about killing
someone during holidays) if a person
killed someone accidentally during the
holidays, he or she should be punished.
In the article about killing someone during
the quarrelling, if someone died within
50 days after quarrelling and battery, a
person who beat should be imprisoned
and executed by stretching.
CONCLUSION
The above mentioned categories
of laws had demonstrated the unity of
Manchu Chin and Mongols. The self-
governing rights and rights to enact
laws solely were given by Manchu Chin
government to Mongols. Manchu Chin took
into consideration differences between
two nations. Therefor special laws only for
few nations were enacted. For example,
there were “Mongolian Code”, and “Law of
State Ministry of Outer Mongolia”.
These laws reflected Mongolian
customs and demonstrated historic
tradition and reality of Mongolia. Laws
including a content of Mongolian tradition
were implemented by Manchu Chin.
The amount of a fine could be
depended on conditions of cases
according to the article about “Sentencing
Mongols in Da Chin Hun Diyan”. The
main features of laws of Mongolia were
penalties to pay a fine with animals or
other possessions. It was the reflection of
Mongolian customs.

Manchu Chin government proved the
power of laws of small nation, broadened
and strengthened enforcement of these
laws.
Manchu Chin government enacted
laws of Mongolia which was reflecting
national tradition, using Mongolian
morality and experiences of law enactment
and laws that could separate and restrict
Mongols from other countries.
---o0o---
67
Legal Thinking: Views and Reflections
However it had helped to develop
a society of small nation and protect
the collectivity between a small nation
and other countries. And Manchu Chin
government had strengthened its law
enforcement among small nation.
Nowadays these are more important
historic and academic actions for us.
Historical values for establishment of
united country were collected.
LAW REVIEW
REALIZATION OF PUBLIC INTEREST BY LAW
Amarbat Batzul, assistant lawyer
“ELC” LLP Advocates
KEY WORDS
Public interest, administrative
law, administrative court, state interest,
concepts of public interest
ABSTRACT
Whereas the term “public interest”
considered as an indefinite legal term
in studies, there are basic theories and
studies to identify public interest and
realize its concept. This paper includes
some basic theories. Firstly, the liberal
theory researched that the public interest
is sourced from private interest from the
people, otherwise, each one of people’s
individual private interest comprises public
interest. Secondly, the State-centered
theory states that the public interest is
state and government’s main interest
and only state shall protect public interest
and shall enact laws and regulations in a
purpose of public interest. As I considered,
this theory is related to the Jean-Jacques
Rousseau’s “Social contract theory” and
they saw the Constitution as an agreement
among the states of which gave them
the ability to self-governance. Third,
68
2017 5(65)
Democratic liberal theory researched
that civil society organizations and other
non-governmental organizations can
protect public interest beyond state and
government. I will support this theory
by complying Mongolian newly-adopted
administrative procedural law in this
paper.
INTRODUCTION
Since 1992, the Mongolian law
system has been undergoing reforms in
all areas: particularly constitutional law,
civil law, criminal law and administrative
law. The term “public interest” has been
considered as indefinite and officially
undefined legal term reflected in 16 laws
and 8 Constitutional court decisions of
Mongolia. Article 18 of newly-adopted
Mongolian administrative procedure
law states that the non-governmental
organizations and other social
organizations may file a claim on behalf
of the public interest to the administrative
court. Realizing the term “public interest”
by law is essential to identify the scope
of public interest and realize what “public
interest” really is. As I mentioned, there
is necessity to define “public interest”
by law. But the question is whether the
true nature of public interest can be
captured by the text of a law ?. Whereas
the term “public interest” is considered
as an undefined legal term in studies,
there are basic theories and studies that
identify public interest and realize its
concept. Black’s Law Dictionary explains
public interest is the welfare of the public
as compared to the welfare of a private
individual or company. All of society has a
stake in this interest and the government
recognizes the promotion and protection

of the general public. This term is vague
but the government will only let the public
know what is in the public’s best interest. It
won’t release information that could cause
riots and upheaval in the nation.
I.THE NECESSITY OF DEFINING
PUBLIC INTEREST
Defining public interest has been a
major point of law studies. In western law
studies, public interest is identified by effect
of political ideology and diversification
of state theories1. However, the term
“public interest” has been reflected in
many branches of law and court decisions
by concept and text; in other words, it is
a useful term with respect to the whole
legal system. According to the Mongolian
newly-adopted administrative procedure
law, non-governmental organizations can
file a lawsuit on behalf of public interest
in the frame of four social issues - public
health, public property, environment, and
children’s rights, against state departments
who have violated public interest by
their unlawful decisions. Therefore, as
stipulated in the above-mentioned law
of Mongolia, administrative courts and
civil society organization protect the
public interest. But the question is, in
administrative law theory, administrative
courst only protects subjective rights of
legal person. Hence, if the term “public
interest” is not defined precisely in law
practice, the concept of protecting public
interest by administrative court cannot
come into force in reality.
The purpose of government is
therefore, within many traditional accounts,
to give expression to the public interest.
As John Locke puts it, “the peace, safety,
and the public good of the people” are the
ends of political society, and “the well-
being of the people shall be the supreme
law”. Jean-Jacques Rousseau took
the idea of the “common good” (le bien
commun) to be the object of the general
1
T.Munkh-Erdene, “Protecting public interest at the admin-
istrative court” conference, Defining public interest, 2016
69
Legal Thinking: Views and Reflections
will and purpose of government2.
In law theory, the term “public
interest” is considered as an undefined
term (Unbestimmte rechtsbegriff).
Therefore, this term shall not be written
in laws as a law text. This uncertainty of
meaning of public interest leads judges
and legislative bodies to interpret based
on the basic principles and theories of law.
Hence, there is a necessity to define the
term public interest correctly in order to
protect public interest that is the absolute
interest and purpose of State’s activity.
Public interest is a term with a long
history in traditional political philosophy.
The idea of transforming the interests
of many people into some notion of a
common good is, of course for many
people, the central task of the whole
political process3. From an analytical
viewpoint, the concept of the public
interest may be best understood when
viewed within a specific context or
continuum. There is ample opportunity
for research into decisions of regulatory
bodies and judgments by the courts
where the concept is interpreted in the
light of specific issues. In Mongolia, some
practices arising in administrative court
with respect to protecting public interest
in accordance with the administrative
procedure law of Mongolia. In order
to define public interest, we have to
differentiate collective interest and public
interest. Not every collective interest can
be viewed as a general interest of the
society, only an interest that can qualify
as an interest of general benefit who can
be understood as such. In many cases,
the satisfaction of collective interests of
certain groups may be in harsh conflict
2
“Public Interest, Political Philosophy and the Study of Pub-
lic Administration”, available at http://publicinterest.info/?q=-
public-interest-political-philosophy-and-study-public-admin-
istration (last visited Apr.18.2017)
3 ld.
LAW REVIEW 2017 5(65)

with the general interests of the society4. interest to reflect in laws. But the term
“public interest” can be reflected in laws
by concept. In the famous German law
A. Who defines public interest?
dictionary “Creifelds Rechtswoerterbuch”
As mentioned above, the term states that the term “public interest”
“public interest” cannot be defined directly commonly used in law language (especially
by law due to its indefinite character in public law) and the understanding of
(Unbestimmte rechtsbegriff). However, in public interest are considered of higher
modern law studies, public interest can be status than private interest. It is an
protected by the courts and constitutional undefined legal term, so the only way
courts. If public interest law does not refer to define this term is for court to define
to a body of law, the question of how it can it by accepting claim and examining the
be protected by courts or other judiciary prerequisites of the matter. 8
branches of power arises. The interest
Legislation uses the term “public
that is considered as public has two
interest” within its provisions, for instance
major concepts: numeral and conceptual.
by requiring a specific decision-maker
Whereas the term “public” includes
to take decisions in light of “the public
numeral (sum of people), it shall not be
interest”. There are many pieces of
identified by the sum of people, in other
legislation that could be used to illustrate
words numeral5 in any case. For example,
the point, but the best example is perhaps
if the mining company pollutes air, water
the Freedom of Information Act 2000.
and environment by their activities on the
Under this Act, requests for certain types
land where no one lives, even in case
of information are subject to a “public
the majority of Mongolian citizens don’t
interest” test; that is, the public authority
live in the polluted territory, the public
that holds the information must decide
interest is violated there. In other words,
whether or not the “public interest”
although people whose rights are not
favors disclosure of the information to
directly violated don’t live there, it can be
an individual who is requesting it. In the
adversary to fundamental environment
event that the authority concludes that
condition and other people who may use
the information should not be disclosed,
the polluted water6. As mentioned, public
the individual can challenge that decision
interest cannot be defined by numeral
through the office of the Information
(sum of people).
Commissioner and, thereafter, through the
In several countries’ court decisions, Information Tribunal and the High Court.
the water, power, trash, culture, education, In that instance the High Court may have
public hospital service, funeral and public to determine whether, as a matter of law,
pool matters are absolutely related to the “public interest” requires disclosure9.
public interest7. Judges invoke the term themselves when
As mentioned above, the legislative justifying particular developments in the
body can’t define public interest by law law.
because of the impossibility of public
4
Prof.Jiri Zemanek, Public interest in the Case law of the
Constitutional Court of the Czech Republic, available at
http://www.constcourt.md/public/files/file/conferinta_20ani/
programul_conferintei/Jiri_Zemanek.pdf (last visited
Apr.18.2017)
5
T.Munkh-Erdene, “Protecting public interest at the admin-
istrative court” conference, Defining public interest, 2016 8
C.H.Beck, Creifelds Rechtswoerterbuch, 19.Auflage, Mu-
6
Mongolian bar association, “Protecting public interest by enchen, 839 (2006)
administrative court”, research report, 2016 9
How the term arises in court, available at http://publicinter-
7
Andreas Fisahn, Der Begriff des oeffentlichen interesses est.info/?q=what-public-interest/how-term-arises-court (last
im fachplanungs-und Naturschutzrecht, Uni Bielefeld, 12 visited Apr.15.2017)

70

II. CONCEPTS OF PUBLIC
INTEREST
There are three main concepts of
defining public interest in western law
study. The following concepts are related
to the political view and the state theories.
A. The liberal concept of public
interest
The liberal concept of public interest
is based on the doctrine of Adam Smith’s
fundamental liberal understanding. The
public interest created by the “invisible
hand” and the individual’s private interests
which aim to get benefit composes public
interest. Freihher von Stein, the professor
who developed this concept into state
theory research states that an individual’s
private activities can be used for the public
benefit and public interest10. Therefore, a
private property owner may be obliged to
transfer his property to the state for the
purpose of public benefit11.
In this concept, the term “public
interest” is composed by each one of
individual’s private interests. Hence,
protecting public interest means
protecting each one of legal individual
person’s interest in compliance with the
liberal concept of public interest. General
interest cannot be solely in the interest
of the state or its institutions, but also in
the need of the society to define the rights
of public owners in case of their mutual
conflict. According to the case law of the
General Federal Constitutional Court, the
condition of general interest within the
meaning of Article 14 (3) of constitution
is satisfied when presumes heightened,
substantively objective public interests.
According to the European Court of Human
Rights, measures pursuant to Article
1 (1) of the Protocol to the ECHR must
follow legitimate political purposes. These
definitions have a common denominator:
their generality, which is due to the broad
10
Stein, Nassuaer Denkschrift, in: Briefe und amtl.Schriften,
Freihher von Stein, Bd, 500
11
Schwab, Die Selbstverwaltungsidee, 132
71
Legal Thinking: Views and Reflections
spectrum of situations in which such
condition needs to be examined12.
B. The state-centered concept of
public interest
The other side of the above-
mentioned liberal concept of public
interest, there is a state-centered concept
of public interest. The main purpose of
this concept is to consider public interest
against the private interest. The founder
of this concept is Hegel and he once
considered that the there are many private
interests which conflict each other in civil
society13. Furthermore, he stated that
the meaning of “public” is a State in any
cases14. State demonstrates only public
interest and the public interest and private
interests must be differentiated. All activity
of state aims to protect public interest and
public benefit and state is the only body to
define and represent public interest15.
One of the developers of the state
centered concept Forsthoff stated that
state shall fulfill the demand of the
majority of people. It is the main purpose
of the state16. In accordance with the
above mentioned Forsthoff’s conclusion,
we can see that public interest and public
benefit related to the state and it is a
basic prerequisite of existence of state.
Indeed the very existence of the state as
a collectivity would seem to prompt the
formulation of basic common purposes.
C. The democratic concept of public
interest
The third essential concept that
defined public interest is the democratic-
12
Prof.Jiri Zemanek, Public interest in the Case law of the
Constitutional Court of the Czech Republic, available at
http://www.constcourt.md/public/files/file/conferinta_20ani/
programul_conferintei/Jiri_Zemanek.pdf (last visited
Apr.18.2017)
13
Hegel, Grundlinien der Philosophie des Rechts, 189
14
Hegel, Enzyklopaedie der Philosophischen Wissenschaf-
ten, 564
15
Andreas Fisahn, Der Begriff des oeffentlichen interesses
im fachplanungs-und Naturschutzrecht, Uni Bielefeld, 15
16
Forsthoff, Gemeinwohl, S, 41
LAW REVIEW
pluralist concept17. One of the classic
example which arises due to this concept
is Prussian property confiscation law. This
law became the fundamental source of
the modern planning of administrative law.
In accordance with this law, property shall
only be confiscated for the public interest18.
This idea was extremely protested by the
counterparts of the government and they
stated that giving power to confiscate
for the government on the basis of the
undefined term “public interest” is not
right19. However, the counterpart of the
government didn’t successfully protect
their position.
The question is that, can state
protect public interest at any time? The
answer is no. In case of conflict between
one public interest and another public
interest, public administrative body can’t
protect and differentiate them. If so, in this
case, the democratic concept allows non-
governmental organizations and other
civil society organizations to protect public
interest by filing a lawsuit to court.
The above-mentioned three
concepts which define public interest are:
1. Public interest is a completion of
each of the individuals’ private interest,
and public interest is protected by
protecting each one of private interest due
to the liberal concept of public interest.
This concept is not used commonly these
days in law theory, so the liberal concept
that defines public interest is not a concept
that the world accepted.
2. State-centered concept that
considers the state’s main aim is to fulfill
public demand; and the body who has
a right to define and represent public
interest is only the state.
3. The democratic conception of
public interest states that state may protect
17
Andreas Fisahn, Der Begriff des oeffentlichen interesses
im fachplanungs-und Naturschutzrecht, Uni Bielefeld, 12
18
Verhandlungen des Hauses der Abgeordneten, 1873/74,
S, 128
19
Andreas Fisahn, Der Begriff des oeffentlichen interesses
im fachplanungs-und Naturschutzrecht, Uni Bielefeld, 18
72
2017 5(65)
public interest by adopting a law and other
regulations; however, state cannot protect
public interest and define it, so that non-
governmental organizations and other civil
society organizations can protect public
interest. Hence, the third conception which
allows non-governmental organizations
and other civil society organizations
can protect public interest is a well
realized concept that reflected in laws
in practice. Hartmut Maurer, the well-
known in administrative law of Germany,
once stated that “administrative activity
must based on the public interest, and
the meaning of the term “public interest”
may be changed in particular cases. It is a
controversial term”20.
III. MONGOLIAN LAW
REGULATIONS
Since 1992, the Mongolian
Parliament has been adopting modernized
laws and regulations which protect
public interest in certain ways. One of
the main source of the Mongolian law is
a democratic Constitution. Mongolian
Constitutional law considers public interest
to be more effective than the private
interest for certain issues. Considering the
comprehension on democracy and human
rights issues and the mentality of the era
toward democracy in the world and Asia, in
particular, and carefully reviewing foreign
influence and pressures, the Constitution
was a daring attempt that stepped ahead
of the time
A. Realization of public interest by
constitutional law
In Mongolian democratic
Constitution, although the term “public
interest” wasn’t reflected directly, the term
“interest” was reflected in Article 6.
20
Hartmut Maurer, Allgemeines Verwaltungsrecht, 16 Aufla-
ge, Verlag C.H.Beck, Muenchen, 5, (2006)

Article 6.4 “The State shall have the right to hold
landowners responsible for the land, to exchange
or take it over with compensation on the grounds
of special public need, or confiscate the land if
it is used in a manner adverse to the health of
the population, the interests of environmental
protection or national security.”
Article 16.10 “the right to form a party or other mass
organization and freedom of association to these
organizations on the basis of social and personal
interests and opinion. All political parties and other
mass organizations shall uphold public order and
state security, and abide by law. Discrimination
and persecution of a person for joining a political
party or other mass organization or for being their
member shall be prohibited. Party membership
of some categories of state employees may be
suspended.”
Article 16.11 “men and women shall enjoy equal
rights in political, economic, social, cultural fields
and in family relationship. Marriage shall be based
on the equality and mutual consent of the spouses
who have reached the age determined by law.
The State shall protect the interests of the family,
motherhood and the child.”
Article 17.2 “It is a sacred duty for every citizen to
work, protect his/her health, bring up and educate
his/her children and to protect nature and the
environment”
Article 23.1 “. A member of the State Ikh Khural
shall be an envoy of the people and shall represent
and uphold the interests of all the citizens and the
State.”
Article 46.2 “Genuine civil servants shall be
Mongolian citizens. They shall strictly abide by
the Constitution and other laws and work for the
benefit of the people and in the interests of the
State.”
In the above-mentioned articles,
the concept “public interest” is defined
by public health interest, environmental
interest, national security interest, social
interest, personal interest, family interest,
children interest, citizen interest, state
interest. Particularly, according to the
article 6.4 of Constitution of Mongolia
states that “The State shall have the
right to hold landowners responsible
for the land, to exchange or take it over
with compensation on the grounds of
special public need, or confiscate the
land if it is used in a manner adverse
to the health of the population, the
interests of environmental protection
or national security” and the “interests
of environmental protection or national
security” is similar to the public interest.
Mongolian Constitutional law realized that
73
Legal Thinking: Views and Reflections
public interest is more effective than the
private interest by stipulating that state
can confiscate private owned land to
the purpose of public benefit and public
interest.
(1) Constitutional complaints as a
protection of public interest
According to the Constitution of
Mongolia, constitutional court (Tsets)
is the constitutional body to protect
constitution and it has a specific feature.
As stipulated in article 66.2 of constitution
of Mongolia “The Constitutional court
shall examine and settle constitutional
disputes on its own initiative on the basis
of petitions and information received from
citizens or at the request of the State
Ikh Khural, the President, the Prime
Minister, the Supreme Court and the
Prosecutor General.”21 Person has a right
to give information that about violations
of constitution to the constitutional
court in order to protect objective right.
Particularly, in Mongolia, person has
a right to give information which is not
related to their own rights about violation
of constitution to the Constitutional court
in order to protect public interest.
The Constitutional court, in
accordance with Paragraph 1 of this
above mentioned article, shall make and
submit conclusions to the State Ikh Khural
on:
1) the conformity of laws, decrees
and other decisions of the State Ikh
Khural and the President, as well as
Government decisions and international
treaties to which Mongolia is a party with
the Constitution;
2) the conformity of national
referenda and decisions of the Central
election authority on the elections of the
State Ikh Khural and its members as
well as on Presidential elections with the
Constitution;
21
Constitution of Mongolia, 1992, State news, ¹1, (1992)
LAW REVIEW
3) whether the President, Chairman
and members of the State Ikh Khural,
the Prime Minister, members of the
Government, the Chief Justice of the
Supreme court and the Prosecutor
General have breached the law;
4) whether the grounds for the
removal of the President, Chairman of the
State Ikh Khural and the Prime Minister
and for the recall of members of the State
Ikh Khural existed.
5). If a conclusion submitted in
accordance with sub-paragraph 1 and 2 of
Paragraph 2 of this Article is not accepted
by the State Ikh Khural, the Constitutional
court shall reexamine it and make a final
judgment.
Hence, constitutional court
determines legal effectiveness of above
mentioned decisions such as law,
regulations, parliament’s decisions which
regulates public interest. So that, any
person has a right to give information in
order to void above mentioned regulations
by constitutional court. It is called actio
popularis22.
A. Effects of administrative court
In 2016, the Mongolian Parliament
adopted a new version of Administrative
Procedure code. According to Article
18 of this code, non-governmental
organizations and other civil society
organizations can file a lawsuit behalf of
public interest against the administrative
body at the administrative court. This
is a new regulation which had never
been established before. According
to the Administrative Procedure
code of Mongolia, non-governmental
organizations can protect public interest
only within the framework of public
health, environment, public property and
children’s rights. As mentioned above,
we can conclude that this regulation is
22
O.Munkhsaikhan , Possibility to identify constitutional
court (Tsets)’s authority in relation to citizen’s petition and
information, Mongolian law science: present and past, 65
(2015)
74
2017 5(65)
a sign of democratic concept of public
interest which allows non-governmental
organizations and other civil society
organizations to protect public interest. In
the past, only the State protected public
interest by law and other decisions which
were related to public interest, in other
words, the state-centered conception
was in process before adopting the new
administrative procedure code. After the
adoption of new administrative procedure
code, democratic concept of defining
public interest came into force. Public
interest can be violated by only the
State, particularly by the administrative
body’s unlawful decisions. Therefore, the
administrative court can protect public
interest by accepting the claim which
submitted by the non-governmental
organizations.
(1) Case review 1 – Here are
two examples which compare past
regulations and present regulations of
administrative procedure code in relation
to protecting public interest. First off, in
2015, “Owners of Khuvsgul lake23” NGO
(non-governmental organization) filed
a claim to the administrative court. The
claim was “Mining exploration around in
Khuvsgul lake is harsh to the environment
and we, the residents of that territory,
cannot use the water and other source of
nature anymore due to the license which
gave to the mining company”. Their claim
was to void mining exploration license and
reimburse for damage. The Administrative
court has concluded that claimant “Owners
of Khuvsgul lake” NGO have not authority
to represent the affected people, and their
subjective rights weren’t violated, so the
administrative court cannot satisfy their
clain because the administrative court is
only established to protect only subjective
rights of legal person24.
23
Khuvsgul lake is located in north side of Mongolia, and
one of the longest lakes of Mongolia.
24
“Owners of Khuvsgul lake” NGO vs. Mining department,
available at www.shuukh.mn (last visited Apr.14.2017)

In the above-mentioned case,
public interest wasn’t protected by
administrative court. In this case, if the
claimant wants to file a lawsuit against
administrative department, they shall get
a representation from the people whose
rights were violated. This is the result of
the state-centered concept. In the past,
public interest wasn’t defined by courts
due to the lack of law that enabled courts
to define it precisely. All instance of courts
have concluded that claimants subjective
right weren’t violated; therefore the
claimant “Owners of Huvsgul lake” NGO
cannot be the claimant and have no right
to represent public interest.
(2) Case review 2— This case is
pending and still in progress in court
session. Claimants are “National union of
children protection” NGO, and “National
union against intolerable labor of children”
NGO. In March, 2017, the Mongolian
Government issued a resolution which
regulates winter and spring horse race
schedule. In Mongolia, the children who
are older than 7 years, ride horses in
traditional horse races. The claimants
filed a lawsuit against the Government in
order to void the Government resolution
that scheduled winter and spring horse
race in order to protect children’s rights.
Dozens of children are injured during
horse races every winter and spring. In
March, administrative court has received
the claimants’ claim in accordance with
the new regulation which allows non-
governmental organizations to protect
public interest in administrative court
without any representation. This is
brand-new practice in administrative
court of Mongolia. The above mentioned
democratic concept of defining public
interest used in Mongolian administrative
court by receiving claimants claim.
75
Legal Thinking: Views and Reflections
C .Preliminary conclusion
In Mongolia, according to the
second case review mentioned above,
the administrative court has defined
public interest by receiving a claim which
protects children’s rights. Court insisted
that the right of children to ride horses
is a public interest. The Mongolian law
regulation allowed democratic concept
of defining public interest. In 2016,
although the Mongolian Parliament has
adopted “General Administrative law”
and “Administrative Procedure code”,
the legislative body didn’t define public
interest in above mentioned laws directly.
Public interest is a term which is undefined
legal term (Unbestimmte rechtsbegriff).
IV.COMPARISON
In this research paper, we can
see the comparison of the regulation
of two countries which are related to
the realization of public interest and its
definition.
A. Germany
Article of 14 of Basic law is
important for purposes of comparative
analyses. Article 14.3 of the Basic law
provides that: “Expropriation shall only be
permissible in the public interest. It may
only be ordered by or pursuant to a law
which determines the nature and extent
of compensation. Compensation shall
reflect a fair balance between the public
interest and the interest of those affected.
In case of dispute regarding the amount of
compensation, recourse may be heard to
the ordinary courts.”25 The public purpose
requirement has been interpreted by
the German courts as meaning that
expropriation must be the only way in
which public needs can be reached or
satisfied. In terms of the proportionality
principle, expropriation has to be strictly
necessary to that need by a public or a
25
Basic Law for the Federal Republic of Germany (1949)
LAW REVIEW
specific community26. The approach by
the German courts in interpreting the
public purpose requirement has been
seen as strict rather than narrow, as it
permits a strict but somewhat lenient
interpretation of this requirement27.
There is a distinction between a
narrower and a wider reference to public
purpose and public interest in Article
14.3.1, Article 14.2.2 and Article 14.3.3
respectively. The narrow reference in
Article 14.3.1 protects the individual interest
and it limits the scope of expropriations
by requiring that expropriation should be
for a public purpose. The wider reference
to the public interest in Article 14.3.3
protects the public interest by providing
that compensation for expropriation
should reflect a fair balance between the
public interest and the interest of those
affected by the expropriation28. It must be
noted that German law takes the public
purpose requirement very seriously and
applies it fairly strictly, but there is always
room for expropriations serving a public
purpose that also happen to benefit
private parties29.
At the present, the Federal Nature
Protection Act (BNatSchG)30 and fourteen
of the sixteen regional nature conversation
statutes of the federal states contain a
legal basis for public interest proceedings
in environmental matters. In federal nature
conservation law, the legal basis for public
interest proceedings is Section 61 of the
BNatSchG. Section 61 of this law reads:
Proceedings Initiated by Associations
(1) An association recognized
in accordance with Section 59 or on
the basis of respective provisions of
the federal states adopted within the
26
BVerfG, 1 BvR 1367/88 of 18.2.99;see Van der Walt AJ
Constitutional property law, 259, (2005)
27
Van der Walt AJ, Constitutional property law, 253, (2005)
28
Van der Walt AJ, Constitutional property clauses: A com-
parative analysis , 148, (1999)
29
Ld.
30
Nature Protection Act (Bundesnaturschutzgesetz) of 25
March 2002, Federal Law Gazette (BGBI.) Part I, 1193,
(2002)
76
2017 5(65)
framework of Section 60, can without a
violation of its rights, initiate proceedings
pursuant to the Administrative Courts
Code against
1. exemptions from prohibitions
and orders for the protection of nature
reserves, national parks, and other
areas of conservation referred to in
Section 33 paragraph 29 ; and against
2. plan establishment decisions
on projects involving an interference
with nature and landscape as well as
plan approval decisions to the extent to
which their adoption requires public
participation. The first sentence shall not
apply where an administrative act referred
to therein was issued on the basis of
administrative judicial proceedings.
B. Australia
The Commonwealth Constitution of
1900 provides: “51. The parliament shall,
subject to this Constitution, have power to
make laws for the peace, order and good
government of the Commonwealth with
respect to: The acquisition of property
on just terms from any State or person
for any Purpose in respect of which
in Parliament has the power to make
laws”.31 What looks like a public purpose
requirement in the Australian context
therefore actually refers to those purposes
for which the federal government has the
power to create or make laws. There are
a few Australian cases that do concern
the interpretation of the public purpose
requirement in expropriation legislation,
and these decisions are indeed relevant
for our purposes. In Campbell vs Municipal
Council of Sydney32 the Municipal Council
of Sydney attempted to take land for other
reasons. The court held that a body such
as the Municipal Council of Sydney, which
is authorized to take land compulsory for
specified purposes, will not be permitted to
exercise its powers for different purposes
31
Commonwealth of Australia Constitution Act of 1900 (UK)
32
Campbell v Municipal Council of Sydney, AC 338, 343,
(1925)

and, if it attempts to do so, the courts will
intervene.
Section 51 of the Australian
Commonwealth Constitution does not
focus on individual rights but on the
divisions of powers between the states
and the Commonwealth; this makes
the reference to public purpose in the
section different from other jurisdictions
like Germany, USA., where the power of
expropriation is restricted by the public
purpose requirement in the respective
constitutional property clauses.
In Australia, “public interest” should
not be defined, but a list of public interest
matters could be set out in new Act. The
list would not be exhaustive, but may
provide the parties and the court with
useful guidance, making the cause of
action more certain and predictable in
scope33.
33
Should public interest be defined? Available at https://
www.alrc.gov.au/publications/8-balancing-privacy-other-in-
terests/meaning-public-interest (last visited Apr.16.2017)
---o0o---
77
Legal Thinking: Views and Reflections
V.CONCLUSION
In this research paper, I have
concluded that the term “public interest”
cannot be defined in laws as a direct law
text in accordance with the undefined
legal term (Unbestimmte rechtsbegriff).
There are 3 main concepts that tried to
define public interest. Democratic concept
of public interest is used in common in the
world such as Mongolia and Germany.
In Constitutional law, public interest is
more effective than the private interest
in compliance with the regulations on
confiscation and expropriation.
Although the term “public interest”
cannot be defined in laws directly,
the court can define public interest by
receiving a claim which related to protect
public interest. Whereas the term “public
interest” cannot be defined by laws,
the judge and the court can define and
interpret it by judge right (richterrecht).
Hence, the judge can define public
interest by receiving a claim on certain
occasions.
LAW REVIEW
CHALLENGES AND ISSUES CONCERNING
PRE-TRIAL SETTLEMENT OF DISPUTE IN
ADMINISTRATIVE PROCEEDINGS
Erdenetsogt.A, Professor of Public Law
Department of the School of Law of
National University of Mongolia
KEY WORDS
Administrative cases, a preliminary
resolution, features of a preliminary
resolution, functions of preliminary
resolution proceedings, implementation of
a preliminary resolution
ABSTRACT
Here will be considered the
theoretical and practical issues of a
preliminary resolution of administrative
cases.
INTRODUCTION
Formation of a concept on procedure
for administrative cases in Mongolia
brought into existence a new concept on
a preliminary resolution of administrative
cases. This article includes a brief
concept about the essence and functions
of preliminary resolution of administrative
cases, information about the results of
the research where some regulations for
administrative resolution in Mongolia and
78
2017 5(65)
their implementation are analyzed, and
in the end, certain ideas are suggested
to optimize them. Since 2004, when the
law on procedure for administrative cases
came into force, the question of whether
procedure for preliminary resolution of
administrative cases is being implemented
properly or not, has always been the focus
of attention. To study how this affects
activities of the Administrative Court is
today’s priority task.
1. The essence of procedure
for preliminary resolution of
Administrative case
Procedure for a preliminary
administrative case resolution is the
process that an administrative dispute was
resolved by a higher level administrative
organ or a competent official before
the case was transferred to court. A
preliminary administrative case resolution
has following features1:
1.Procedure for a preliminary
resolution is procedure that has dual
character. On the one hand, it has a
procedural character. In this context,
procedure for preliminary resolution and
procedure for administrative court have
functional conjunctions. In particular,
these two have same procedures
as subordination, significance of a
complaint or a claim, the administrative
act mentioned in them is legally justified
or not etc. On the other hand, procedure
for a preliminary resolution refers to an
administrative organ`s activity itself, i.e.
in frame of its executive function. Thus,
there is no influence or participation from
1
A.Erdenetsogt, “Administrative procedural law of
Mongolia”. Ulaanbaatar 2006, p 93-95

the side of judiciary. Such execution of
these two procedures makes us to talk
about the double nature of the preliminary
resolution of administrative disputes.
2. Procedure for a preliminary
resolution is specific because it is an
independent administrative action. Its
procedural independence confirmed
by the fact that a higher-level authority
cancels the administrative act against
which the citizen filed the claim, in case it
was found that the act was unlawful. The
dispute will be considered as resolved
if the claimant accept the authority`s
decision.
3. An administration complaint can
be considered only once in frame of
procedure for a preliminary resolution.
There is no concept that a complaint must
be considered by every level of authority.
This regulation is designed to protect
citizen from administrative bureaucracy2
4. A conclusion made by a higher-
level authority after procedure for a
preliminary resolution is not final for
that case. In case the claimant does not
accept the conclusion they can bring the
complaint to court.
2. Pre-trial settlement of dispute
in administrative proceeding and its
functions
Pre-trial settlement of dispute in
administrative proceeding in Mongolia is a
procedure of dispute resolution by higher
level authority on complaints submitted
by citizen and legal entities against the
administrative acts issued by public
administration body.
This procedure has three specific
functions of (a) legal protection; (b)
internal monitoring; and (c) reduction of
court caseload3.
2
Ts.Sarantuya, Administrative court: Reforms in Mongolia
and world standard. Multi-author book. Ulaanbaatar 2004,
p 79
3
A.Erdenetsogt, “Administrative Procedural Law of
Mongolia,” National handbook, Ulaanbaatar 2006, p 95-96
79
Implementation of Efficiency and Law
A. Function of legal protection
A higher level authority can
receive complaints from individuals
against administrative acts issued by
an administrative entity of a lower level,
and is subsequently empowered to either
suspend the act in question; repeal the
act, in case it was found that the act
was unlawful; order the issuing authority
to pass another act; or to declare the
act unenforceable. This demonstrates
the function of this procedure aimed to
restore violated rights and legal interests
of individuals in an expeditiously and
efficient manner.
B. Function of internal monitoring
Main purpose of this function is to
allow an option for a public administration
to acknowledge any mistakes and amend
its acts without having to bring the issue
to court. However, this mechanism cannot
be repeated, i.e., an administrative
complaint can be taken into consideration
by a higher-level authority once, and if
the claimant doesn’t accept the resolution
made by that authority, they can bring the
complaint directly to court.
C. Function of reducing the court’s
caseload
If a higher-level authority receives
a complaint against an administrative
act issued by a lower-level authority and
settles it to the satisfaction of the claimant,
the issue no longer needs to be brought
to court, which results direct reduction in
court workload.
3. The condition for the right to
issue a complaint
The prerequisite for the right to issue
a complaint is the requirements that are
presented to a citizen to exercise his right
to complain as a preliminary regulation.
The jurisdiction of the complaint must
be correct. The jurisdiction is classified
by administrative case or direct
subordination. Citizen or legal entity must
meet the following requirements to file a
complaint:
LAW REVIEW
The prerequisite for the right to
initiate a complaint is the requirements
that are presented to a citizen to exercise
his right to complain.
1. Jurisdiction
Jurisdiction over a case of complaint
that is in preliminary regulation level
belongs to the Administrative Court. In
other words, on disputes that are under
jurisdiction of the Administrative court
it is necessary to conduct preliminary
proceedings. If the dispute does not
belong to the jurisdiction of Administrative
Court, there is no need to conduct pre-trial
proceedings. Therefore, the complaint is
related to the public legal disputes defined
in Article 13.1 of the Law on Administrative
Procedure or, more precisely, with the
administrative act referred to Article
92.1 of the General Administrative Law.
Administrative body or official competent to
review complaints is the direct jurisdiction.
In article 93, paragraph 1 of the General
Administrative Law the direct jurisdiction
of complaint is provided as follows “...
the higher administrative authority or the
administrative body having jurisdiction
over complaint proceedings”.
2. Submission a complaint
As cited in Article 92.2 of the
General Administrative Law the complaint
submission must meet the following
requirements:
- A complaint in written or electronic
form. Citizen or legal entity can file a
complaint in written or electronic form.
Or it can be filed in personal, verbally. In
this case, the complainer will personally
come and orally present the complaint,
and the employee in charge of receiving
complaints must take a note and
signature of complainer. If the complainer
cannot sign, this should be noted. Also a
complaint can be filed through electron
network.
- The complainer`s name and
surname. The complainer must state his
name and surname in the complaint. The
80
2017 5(65)
same requirement has to be presented to
complaint that was submitted orally.
- Residential and postal address. The
complainer must include his/her residential
or postal address in the complaint.
Residential address can be permanent
or temporary address of citizen. In case if
the complaint is made from the temporary
address the complainer must be registered
on that address. If the complaint is made
on the name of a legal entity, address of
location or an official name of the street,
square and administrative unit where
permanently located the governing body
of the legal entity is, must be included.
- Signature. A complainer must sign
under his/her complaint. If he cannot sign
for valid reasons, then the others can
leave a signature representing her/him.
If complaint is filed by citizens collectively
in written form then all the people or their
representative must sign it and attach the
document proving representation right. It
is prohibited to require anything other than
these in the course of filing a complaint.
- Essential content. The complainer
should not be required to deepen the
content of the complaint. But there is
an essential content that must be in a
complaint. It is supposed to enough to
have the following: the title of the relevant
administrative act, the date of issue and
the number of the administrative act, and
the name of the administrative body or
official.
3. Statute of limitations
Statutory limitation period provided
for by law to file a complaint should not
be exceeded. According to the 94.1 of
General Administrative law, “the complaint
should be submitted to the competent
administrative body within 30 days from
the date of the administrative act notified
in accordance with the rule provided by
this law”. The time for filing a complaint
must be counted from the time when
the administrative act was received or
known by citizen. If the administrative act

is not handed over or was not known to
the citizen or legal entity, the statute of
limitations is not counted. If the limitation
period set out in Article 94.1 of the
General Administrative Law was found
to be overdue due to unavoidable valid
reasons, within three months after the
overdue of this period the administrative
body or official can restore it, and a request
for restoration should be submitted to
an administrative body authorized to
review and resolve complaints. To the
inevitable valid reasons, it is possible to
include any other similar reasons that
are beyond the control of the complainer,
because of which it was impossible to
file a complaint, whether due to illness
or because of absence or a business
trip or because of force majeure, etc.
The status of the “received” or “notified”
about the administrative act is determined
by the circumstances under which the
relevant administrative act is “handed” or
“notified” to the citizen or legal entity. If a
dispute arises on this issue, not citizen
or legal entity obliged to prove that the
administrative act was handed or notified,
but the administration. The delivery and
notification of administrative acts belong
to the functions of administrative bodies
and officials.
4. Violation of subjective rights
A complaint can be filed by citizen
or legal entity on subject of violation of
his/her/its rights or legal interest. And to
complain on behalf of own name in order to
protect the rights and legitimate interests
of others is not permitted in principle. (the
General Administrative Law §92.1)
5. To be legally capable
A legally capable citizen is able to
file a complaint. Legally not fully capable
peoples` rights may be protected by their
parents, guardians representing them. As
for legal entities, the same requirement to
be legally qualified is presented.
81
Implementation of Efficiency and Law
6. Absence of a valid court decision
The absence of a valid judicial
decision on the issues referred to the
complaint may be one of the requirements
for a citizen or legal entity. The concept
of valid court decisions may include
an Administrative Court decisions and
decisions of other courts. If there is a valid
court decision on the issue, the complaint
may not be reviewed.
7. The subject of the complaint to be
not reviewed and resolved before. Not to
submit complaints on the issue specified
in the complaint before, may become one
of the requirements for a citizen or legal
entity. If a complaint is filed on a previously
considered issue and there are no grounds
to reconsider, the complaint may not be
considered. These 7 requirements are all
called a menu of complaints or a catalog.
A special regulation. Considering
some norms of the current legislation,
it is impossible to file a complaint for
preliminary regulation, if it is specially
stipulated in law not to accept complaints.
For example, in Article 54.1 of the Law on
the Procurement of Goods and Services
from State and Local Funds, stated that
the parties referred to in Article 54.2 of
this Law are not entitled to any additional
complaint on the matter if they were not
involved in the process. Therefore, it is
necessary to carefully consider possible
consequences as the parties not only do
not have the right to file a complaint on
preliminary proceedings, also may lose
the right to apply to the courts temporarily.
In some cases, the law has a special
regulation not to accept complaints, if
a certain stage of the adoption of the
administrative act is completed. The
evidence of this can be seen in Article
54 of the same law, which states that
“An appeal received after the deadline
for concluding a contract is passed, is
not accepted” and in this case a citizen
and a legal entity have the right to apply
LAW REVIEW
to court4. “Alternative” rule, which allows
the complainant to choose independently,
to go to court or higher authorities can
be attributed to special regulations. For
example, if a citizen, an enterprise or
organization does not agree with a dispute
arising from a decision of an organization
or an official specified in article 60.1.2
of the Land Law, the dispute is referred
to their superior officials, institutions or
courts, in some cases citizens or legal
entities may be allowed to choose from
alternative sanctions.
Receiving, rejecting and transmitting
of complaints
After filing a complaint to an
authorized official, he decides whether to
accept or not to accept it after a detailed
examination of the complaint regarding
its compliance with the complaints menu.
If the complaint complies with all legal
requirements, the right of a citizen or
legal entity to file a complaint is opened.
If the complaint of a citizen does not
meet one of the requirements, the right
to file a complaint will not be available.
The complainant must be informed of the
receipt of his / her complaint. Thus, “statute
of limitation” period of the preliminary
regulation begins. And if complaint does
not satisfy the requirements, it should be
refused and be returned to the citizen
or in accordance with the jurisdiction. If
the complaint does not comply with the
requirements set forth in Article 10 of the
Law on a resolution of citizens’ complaints
against state organizations and officials,
and because of this it is impossible to
resolve the complaint, to notify the plaintiff
about it, and the complaint to be returned
to the plaintiff within 3 days5.
If the complaint does not fall under
the jurisdiction of an official, the complaint
is forwarded within 3 days to the body in
4
A. Erdenetsogt. Administrative Procedural Law of
Mongolia. Ulaanbaatar. 2014. p119
5
The Law on a resolution of citizens’ complaints against
state organizations and officials , Article 14.2. ”State
Information” bulletin. 1995.¹7, p797.
82
2017 5(65)
charge6. At the same time, if a complaint
on a preliminary regulation, it should be
sent to a higher authority or an official.
Other complaints must be transmitted
in accordance with their jurisdiction. For
example, the case should be referred to
the prosecutor in accordance with article
10.12.4 of the Law on State Supervision
states that “the senior state inspector in
the process of investigating the complaint
... in the event of a serious incident that
has resulted in damage to the life or
health of people and the violation has
signs criminal act, must pass the relevant
documents to the competent authorities”.
If the complaint does not satisfy the other
requirements, the complaint is returned to
the claimant, since the right to complain is
not open. If the content of the complaint
does not meet the requirements and is
not submitted by its representative, the
complainant may re-apply, having satisfied
the due requirements. If the complaint was
not accepted because limitation period
is exceeded, the complaint should be
submitted to the administrative authority
for procedural act7.
The administrative authorities and
officials responsible for conducting pre-
trial proceedings need to be aware that the
dispute is then reviewed by Administrative
Court.
4. Regulations of pre-
trial settlement of dispute and
implementation in practice
In Mongolia, caseload of
Administrative court is relatively lower
than the other courts. On one hand,
Administrative court system was
established in 2004 and it takes time for
general public to learn about the court,
and on other hand, one can claim that
regulations in the country are designed
to reduce the caseload of administrative
courts. Pre-trial settlement of dispute in
6
The same law. Article 13.2
7
General Administrative Law, Article 94.2. “State
Information” bulletin. 2015. ¹28

administrative proceedings was legalized
for the first time in 2002 in Mongolia.
Article 6.1 of the Law states: “Unless
otherwise specified in law” all complaints
against the administrative acts shall be
made to the supervising higher-level
authority8; which meant that today more
than 90 percent of all such complaints are
made to a higher-level authority instead of
going to the court9. This shows that role of
pre-trial settlement of dispute is significant
in Mongolian Justice System.
However, Law makers didn’t pay
much attention and make clear distinction
on which cases need to be handled
by a higher-level authority and what
kind of cases need to go directly to the
Administrative court. Looking back now
over the past 11 years of administrative
court history in Mongolia, pre-trial
settlement of dispute in administrative
proceedings have not only drastically
reduced the caseload of administrative
courts, but might have acted in certain
cases as an unnecessary middle-
step blocking access to trial-by-court
proceedings for citizens. This observation
is further confirmed by a survey conducted
to evaluate implementation of these
proceedings.
Results from a survey with
participation from the administrative
officials, administrative court judges and
the public shows that 72.5 percent of the
respondents believe that the participation
level of individuals in pre-trial settlement
of dispute is fairly low, while 68.4
percent said that pre-trial settlement of
dispute proceedings are not conducted
in accordance with the law10. As for its
function of internal monitoring, it was
8
Law of Mongolia on procedure for Administrative case,
§6.1
9
A.Erdenetsogt, “Challenges and issues in formation
of Administrative Procedural Law in Mongolia”, Doctoral
Dissertation (Ph.D.), Ulaanbaatar 2009, Library of the
University of Science and Technology, p 107
10
A. Erdenetsogt, “Challenges and issues in formation
of Administrative Procedural Law in Mongolia” Doctoral
Dissertation (Ph.D.), Ulaanbaatar 2009, Library of the
University of Science and Technology, p 124-125
83
Implementation of Efficiency and Law
evident that some of the higher-level
officials participated in the survey still don’t
have a clear understanding of relevant
laws and regulations, which may indicate
that the internal monitoring function of
this measure is being underutilized. For
instance, the main regulation concerning
pre-trial settlement of dispute in
administrative proceedings is the “Law on
procedure for Administrative Cases” which
describes specific instances that require
regulatory framework provided by the Law
on settlement of complaints and claims.
But only 59 percent of the participating
officials said that the Law on settlement
of complaints and claims is relevant to
pre-trial settlement11, which implies that
implementation of this measure is not
uniform across the board.
Nevertheless, with regards to the
function of court caseload reduction,
differentiating the objective and
subjective factors from each other is
crucial. Objective factors include the fact
that according to aforementioned legal
provision, most administrative complaints
go directly to higher-level authorities
instead of going to the court which directly
translate to lighter caseload at courts;
while subjective factors include negative
factors that can contribute to increasing
the caseload at the courts, such as
higher-level officials failing to conduct pre-
trial settlement of dispute proceedings
according to regulations, or ignoring
their legal duty to ensure legality of acts
issued by their subservient authorities.
64.2 percent of survey respondents said
that the higher-level authority in question
failed to satisfy their complaint, while 48.4
percent said that there were clear legal
basis to resolve the issue and yet the
authorities have failed to follow through12.
As for settlements that were passed with
no grounds, most respondents mentioned
the land dispute, license or special permit
dispute, and employment dispute as types
11
Ibid., p 126-127
12
Ibid., p 130
LAW REVIEW
of complaints that are likely to receive
such treatment13.
CONCLUSION
Practice of pre-trial settlement of
dispute in administrative proceedings
in Mongolia shows that the regulation
is designed to mechanically reduce the
caseload at administrative courts while
increasing number of pre-trial dispute
settlement proceedings and it proves the
policy of law makers is not necessarily an
optimal one. Therefore, it is necessary to
address this objective factor and eradicate
the irregularity of the Law. The first step to
deal with this problem could be identifying
certain complaint types that can be brought
directly to the court bypassing the need for
pre-trial settlement of dispute proceedings
and incorporating it into the law. For
instance, complaints regarding declaratory
judgment (Die Feststellungsklagen),
13
Ibid., p 131
---o0o---
84
2017 5(65)
administrative procedural judgment
(Die abstrakte verwaltungsgerichtliche
Normenkontrolle), and order to pay
damages (Schadensersatzklage) are
currently required to go through pre-trial
proceedings, which is not ideal, as such
complaints could not only be possible to
be brought directly to court, but indeed
should be required to do so. This can also
balance the caseload of administrative
courts, whereas right now their caseload
can be considered too light. On other
hand addressing the subjective factors
affecting current unsatisfactory quality
of dispute settlement b higher-level
authorities is important and it would
be effective to reduce the workload of
Administrative court. In particularly,
ensuring the claimant’s right to participate
in the settlement proceedings and their
right to be heard; utilizing legal regulations
correctly, and upholding the rule of law
must be necessary steps.

JUDGE’S RULING DURING ADMINISTRATIVE
PROCEEDINGS AND THE RIGHT TO MAKE AN APPEAL
Munkhdavaa.E, LL.M., Lecturer of Public Law
Department, School of Law, National
University of Mongolia
KEY WORDS
Judge’s decree, court order, court
ruling, the right to appeal, and right to fair
trial.
ABSTRACT
In the event that an involved party
of a court hearing considers a judge’s
decree and court order does not meet
the requirements of the law in the court
proceedings of the first instance court
and court of appeals, in which they
utilize their right to appeal on the judge’s
decree and court order then under the
current provisions, the judge’s decree
and court order is required to be reviewed
under the jurisdiction of the same
instance court which is a violation of the
guarantee provided by the provisions of
the Constitution that provides the basis
that an individual has the constitutional
right to appeal the decision of the court
to a higher instance court and it violates
the constitutional principle that the special
court shall not be outside the authority of
the Supreme Court.
85
Implementation of Efficiency and Law
INTRODUCTION
Under Article 16 Section 14 of the
Mongolian Constitution, “...the right to
appeal to the court to protect their rights if
they consider that the rights or freedoms
as spelt out by the Mongolian law or an
international treaty have been violated,
.... examine the evidence, .... the right to
appeal the decision1 of the court...”, this
article explicitly states that every citizen
of Mongolia has the right to appeal2 any
decision of the first instance court and the
court of appeals to the highest respective
court without being restricted by the
first instance court and court of appeals
judgment and ruling.
In view of the above provisions of the
Constitution, any individual whose rights
are viewed to be violated by a claim made
to the court and the judgement of the court
has adversely affected the interests and
rights of that person then the opportunity to
make an appeal is open. Thus, during the
proceedings in the court, the court ruling
can be made in dozens of forms such as
decrees, sentencing, judgment and ruling
therefore the right to appeal these types
of court rulings are guaranteed by the
Constitution.
The main fundamental ground to
appeal an administrative court’s decision
and a judge’s ruling is a resulting violation
of a subjective right of a citizen that arises
from the decision of the court. For instance,
the first administrative instance court has
to make a decision in various forms for
postponing court date, restoring claims to
the court, examination of evidence, release
from depositing stamp fee, summon
1
Academic S. Narangerel, Court decrees, rulings of judicial
acts, judge’s ruling, and orders implementation in Mongo-
lia’s legal dictionary. Page 625
2
Mongolia as a member of the International Covenant on
Civil and Political Rights Article 14 Section 4
LAW REVIEW
third-parties, cross-examining witnesses,
appoint forensic experts and translators,
and other various procedural stages that
has positive and negative effects to the
parties on both sides therefore the right
to appeal these varied decisions must
remain an open right.3 The purpose of
an appeal directly related to ensuring the
civil rights, adversarial principles, and the
right to a fair trial are upheld. However,
there are provisions in the Administrative
Judicial Proceedings Law that limit and
restrict the ability to appeal certain types
of court decisions.4
In addition, Administrative Judicial
Proceedings Law Article 122.3. “..Article
112.1 of this law, an appeal or complaint
in regards to the judge’s decree and court
order made during the court proceedings
shall be decided within that instance
court...”, this article limits and restricts
the citizens rights to make an appeal to
respective higher instance courts.
Therefore, the topic of this paper will
be on the judge’s decree made during the
court procedures, and the adverse effects
of that a judge’s decree has in the current
legal regulations and restrictions placed
on that parties’ ability to appeal based on
that decree.
The right to appeal and its
consequences:
The parties involved in an
administrative court hearing are able to
appeal the judge’s decree or court order
based on the lawfulness. If he order didn’t
3
An appeal and the court of appeals principle duty to review
whether the orders, ruling, sentencing, and judicial acts are
lawful and have legal grounds and on the other hand, to
ensure the citizens’ rights to submit to the court are satisfied.
The right to appeal to the courts includes the appeal of the
first instance court decision, as well as the decision of the
court of appeals to the supreme court.
4
Administrative Judicial Proceedings Law Article 122.1. “A
written judge’s decree, court order on the refusal of partic-
ipation of third parties has been made then parties of the
case, their respective representatives, and advocates under
Article 14.6, 32.6, 54.2, 61.1, 65.1, 111.3, 119.6, 123.7 has
seven days since the date of judge and court ruling to make
an appeal to higher courts…”, this article does not give the
right to appeal the decree and order of the judge and court
stated above that have adverse consequences.
86
2017 5(65)
satisfy sufficient grounds for legality then
they have the right to make “…an appeal
or complaint in regards to the judge’s
decree and court order made during
the court proceedings shall be decided
within that instance court...” in which it
contradicts the right to appeal to a higher
court by regulating in a way that the first
instance court must review the complaint
and appeal.
A citizen has the integral right to
appeal a judge’s decree or order and
have it reviewed by a third party or higher
instance court on the legal basis and
lawfulness in the event that their rights
were violated by the court.
An appeal is utilized as an
argumentative tool in two ways, it is an
act of delaying the matter and the effect
of transferring the matter.5 The first is the
act by the involved parties, respective
representatives, and advocates to appeal
a judge’s decree and court order then it
has the effect of delaying the enforcement
of the decision made by the first instance
court when reviewed. In certain events,
the judge’s decree explicitly states that the
parties are restricted from utilizing their
right to appeal which evidently shows that
restrictions on the argumentative tool and
prevention of further delays are possible.
Secondly, in the event that there is
an administrative court hearing on the
matter of presidential or parliamentary
elections and a judge’s decree or court
order is made then it is limited to be
reviewed by the court that initially handled
the case instead of being transferred to
the jurisdiction of higher instance courts
such as the Supreme Court. Even then, it
can be argued that a case being reviewed
by the same court that made the initial
order on the matter is a complete conflict
of interest.6 The legal instruments of the
courts are mutually exclusive, and in terms
5
A. Erdenetsogt, “Mongolian Administrative Procedure
Law” Ulaanbaatar 2014, Page 336
6
https://drive.google.com/file/d/0B3tnIplS_PfZ1d-
2Q09MYU0wU1U/view

of authority and oversight as first instance
court decisions are under the jurisdictional
review of the court of appeals and the court
of appeals are under the jurisdictional
review of the supreme court, the duration
of the review of these different instances
are unique in the fact that the higher it
goes the review time frame decreases.
In other words, the authority of the
court of appeals shall not be exercised by
the first instance court and the authority of
the supreme court shall not be exercised
by the court of appeals is the upheld
general principle.
The right of a citizen and legal entity
to exercise their right to protect their
interests by using the services provided
by the court of law and to make an appeal
of judge’s decree or court order to make
a correction in the faulty ruling of the first
instance court is the entire purpose of the
ability to appeal to a higher court.7
The choice to use this right makes
no difference on the fact that, it is a
fundamental right of the involved parties.
The act of restricting it in any form by
the legislators is an act that violates the
Constitution that guarantees a right to fair
trial by the court.
The court of appeals existence
is based on the authority to review the
lawfulness of the decisions, order, decree,
and judicial acts of the first instance court,
and to fully satisfy the request of a citizen
to review the matter. Although there is
the authority to review and decide on the
decisions and rulings of lower courts in
cases of court of appeals and supreme
courts, this can only be achieved in the
context of the general principle stated
above. Through this method, judicial
actions will be balanced “domestically”,
and the results is the elevation of the
principle of equality and justice.
7
The Supreme Court’s Recommendation, November 30th,
2009, ¹01/
87
Implementation of Efficiency and Law
The operation of a specialized
court shall not be outside the authority
of the Supreme Court:
In the Administrative Judicial
Proceedings Law Article 112.1, it specifies
the jurisdiction of disputes concerning
administrative norms to be applied
within the jurisdiction of a national, local
or territorial unit, between provinces,
or between provincial and capital city
disputes, and unless otherwise stated by
the law, disputes over the parliamentary
and presidential elections of Mongolia
and other disputes specified in the law will
be decided by the administrative court of
appeals.
A judge’s decree or court order in the
specialized jurisdiction made during the
process of an administrative case stated
above can be appealed by the involved
parties and the appeal to review shall be
conducted by the same court of appeals
in which the decision shall be final in that
respective instance court.
This regulation is a complete violation
of the Constitution in which Article 50
Section 1 of the Constitution states “The
Supreme Court shall the highest judicial
organ…” and Section 2 of the Constitution
which states “to examine decisions of
lower-instance courts through appeal and
supervision”.
In the event of a parliamentary
election and a presidential election, a
decision has been made with significant
legal consequences by a court of law.
This can include a suspension of a case
or to resolve the request of the involved
parties with respect to evidence and an
appeal of such a decision being reviewed
and resolved in the same instance court
instead of a Supreme Court review. This
process is a distortion of the principle
of the constitution and a violation of the
article that states the Supreme Court
shall examine decisions of lower-instance
courts through appeal and supervision.
LAW REVIEW
In other words, the restriction of an
appeal by involved parties of all forms
of judge’s and court decisions except a
court ruling in a parliamentary election
and a presidential election dispute is a
direct restriction of the oversight of the
supreme court therefore it is not possible
to have those type of decisions reviewed
by the supreme court. This lack of review
is a violation of the principle of appealing
to a higher instance court. This has led
to a dispute over the principle of unity
and conformity of the Supreme Court’s
jurisdiction over our country’s specialized
court system. When considering the
principle of conformity of the judicial
system, this appeals practice conflict with
the entire principle.8
In addition, when an administrative
court of appeals rejects a claim with
respect to a code of conduct involving
disputes between provinces and the
capital city in which it restricts the review
by the supreme court of the claim is a
regulation that deteriorates the rights and
interests of the claimant party.
Before the implementation of the
Administrative Judicial Proceedings Law,
a decree or an order made by the court
with respective jurisdiction during the court
proceedings of other similar cases could
be appealed and the right to appeal was
guaranteed by law however the current
law has limited and restricted this right.
Under the revised administrative process
law, the provisions which eliminates the
first instance court of having jurisdiction
over special cases and limiting it to court
of appeals and Supreme Court in which
limits the court system to a two-court
system should be carefully reviewed.
It is clear that a legal dispute
regarding an election must be decided
urgently however the main issue lies
within the legal consequences and result
8
Mongolian Constitutional Court’s Resolution 03 on March
12th, 2014 on whether violations of the relevant provisions
of the Constitution are present in Lawyers Legal Status Law
Article 65 Section 7, Judges Legal Status Law Article 35
Section 2
88
2017 5(65)
of the decree and order of a judge that
restricts the appeal of the involved parties
when resolving the matter. What are the
basis that presidential and parliamentary
elections being under the jurisdiction of
court of appeals while similar elections
in province, capital, sub-provinces,
and districts are appointed under the
jurisdiction of the first instance court
instead of the same court of appeals?
Though it may be undisputable for lawyers
when considering the administrative law
principles however these principles are
disputable in the fact that lower instance
courts are outside the authority of the
highest instance courts and from the
aspect that the fundamental right to
appeal is degraded.
The right to appeal a judge’s decree,
court order, and decision during the
administrative proceedings of a dispute is
a right of the involved parties and these
decrees, orders, and decisions have
their full authority executed before the
entirety of the dispute is settled in a court
ruling therefore some lawyers consider
that appealing these previously stated
decrees, orders, and decisions are not the
same as appealing the court ruling.
First, the right to appeal is the
request to have their dispute reviewed
by another independent court, secondly,
the judge’s decree and court order have
significant effect on the court ruling of
the dispute court proceedings9 therefore
without considering the only the court
ruling itself and it is important to review
the preliminary court proceedings that
were made before the court ruling was
made. In addition, Article 50 Section 2
of the Constitution have provisions that
are made to give the authority to higher
instance courts to review the mistakes
in a court ruling, misuse of the law, and
wrongful examination of evidences at each
level instance courts to make correction to
legal mistakes.
9
Consequences of the Administrative Court Ruling. Series
5
, Page 22

In the event that a higher instance
court aren’t able to conduct a review then
the involved parties could petition for
an appeal for other decisions than court
rulings in which it would state that the
court has refused to perform the required
procedures and involved parties were not
allowed to exercise mandatory rights in
the complaint that results in a procedural
mistake10 which can be used as a tool
request for multiple reviews that which
could led to further adverse effects. Even
though some lawyers and researchers
may oppose the proposal to review every
judge’s decree and court decision as the
court would not be able to overcome such
immense number of reviews however the
fundamental right to appeal should not be
limited by excessive review amount of the
courts. The overview principle that will be
encouraged is that first instance courts or
court of appeals would minimize mistakes
during court proceedings when deciding
an administrative dispute. The provisions
that the mistakes of first instances court
and the judge will not be reviewed and
corrected in the same court is the main
duty of the court of appeals and higher
courts under the authority of the Supreme
Court.11
Therefore, the operation of a
specialized court shall not be outside the
authority of the Supreme Court12 must be
understood as a general definition that
includes the right to appeal to a decision
made in the court by a judge that directly
influences the outcome of a court ruling
to protect the right to appeal to a higher
court instead of limiting the judicial review
authority of the higher courts to final court
ruling.
10
Administrative Court: Reforms in Mongolia, World Class
Standards, Hanns Seidel Foundation. Ulaanbaatar 2004,
Page 124
11
Mongolian Constitutional Court’s Resolution 09 on Sep-
tember 26th, 2007 on whether violations of the relevant pro-
visions of the Constitution are present in Civil Court Pro-
ceedings Law.
12
Article 48 Section 1 of the Mongolian Constitution
---o0o---
89
Implementation of Efficiency and Law
CONCLUSION
When an individual’s personal
interests and protected rights are violated
then the individual makes a complaint to
the court and the power to disagree with
the decision of the court is a fundamental
right that must be guaranteed by the state
to protect the civil rights, liberty, and these
guarantees are an express of justice before
the court. Therefore, the Constitution of
Mongolia designates that the Court has
the right to appeal the court decision,
as well as the supervision of specialized
courts and the final ruling is done by the
Supreme Court is within the provisions of
the law. The judicial system is responsible
for resolving the matter for anyone whose
rights have been violated. Therefore, a
court procedure must be conducted in a
proper and correct conduct through the
different layers of first instance, court of
appeals, and Supreme Court, and it is
common practice in law systems for the
Supreme Court to make the final decision
when reviewing a disputed appeal.
However, the basic right to appeal the
decision of the court to a higher instance
court is currently limited to the final decision
that is made to resolve the dispute by the
court instead of the various judicial acts
and orders that were made during the
court proceedings which is limited to the
jurisdiction of the same instance court
that made the initial unlawful action which
directly impedes on the authority of the
supreme court to review the decisions
of the lower courts, make the final and
ultimate decisions of a court dispute, right
to appeal to higher courts of citizens, and
violates the constitutional provision that
no special court shall be outside of the
authority of the supreme court.
For that reason, any forms of
decision or conduct made by the court
during the court proceedings has a legal
consequence to an involved party or other
interested parties as a result therefore any
complaint appeal to these decisions must
surely be reviewed by a higher court or
supreme court as provided by the right to
appeal in the provisions of the constitution.
LAW REVIEW
АКТУАЛЬНЫЕ ПРОБЛЕМЫ
БОРЬБЫ С ПРЕСТУПНОСТЬЮ В СФЕРЕ
ИНФОРМАЦИОННЫХ ТЕХНОЛОГИЙ В МОНГОЛИИ
Даваажав Сумъяацэрэн – Научный
сотрудник Центра исследования
полиции Института научного
исследования и развития Университета
правоохранительной службы Монголии,
капитан полиции.
Êлþчåвыå слова
кибåрпрåст уплåниå,кибåрпрå
ступность, прåступность в сôåрå
инôормационных тåхнологий.
Àннотациÿ
Ñтатьÿ посвÿùåна состоÿниþ
кибåрпрåступности в Монголии
и проблåмå их раскрытий. Àвтор
дал краткуþ характåристику
кибåрпрåступлåниÿ, на основå
анализа статистичåских данных
за послåдниå 10 лåт, исслåдовал
способы совåршåниÿ данного вида
прåступлåний, на основании чåго
выдвинул конкрåтныå прåдложåниÿ
по борьбå с кибåрпрåступлåниåм в
странå.Âвåдåниå
Ïо данным пåрвого полугодиÿ
2016 года в Монголии зарåгистрировано
около 2 512 000 пользоватåлåй
èíòåðíåò ñåòè, èç íèõ 86,7% æèâóò
â ñòîëèöå – Óëàí-Áàòîðå, 10,3% â
àéìà÷íûõ öåíòðàõ, 2,9% â ñîìîíàõ,
90
2017 5(65)
Лосол Цогтбаяр – Преподаватель
Кафедры расследования
Института полиции Университета
правоохранительной службы Монголии.
а такжå 59 организаций, имåþùих
спåциальныå разрåшåниÿ заниматьсÿ
дåÿтåльностьþ по прåдоставлåниþ
интåрнåт услуг и обслуживаниÿ.1
Ïомимо рåзкого возрастаниÿ
использованиÿ интåрнåта нå только
компьþтåрами, но и с помоùьþ разных
“умных” устройств, имåþùих прÿмой
доступ к сåти, рåализации множåства
åжåднåвных задач чåрåз “умныå”
устройства, начали развиватьсÿ виды,
способы и тåхнологии использованиÿ
этих достижåний в прåступной
дåÿтåльности.
Многиå страны мира вåдут
борьбу с этим видом прåступлåний
слåдуþùими путÿми и способами:
• Óòäâåðæäàòü íàöèîíàëüíóþ
ïîëèòèêó è ñòðàòåãèþ áîðüáû;
• Ïîäãîòàâêà êîìïåòåíòíûõ
÷åëîâå÷åñêèõ ðåñóðñîâ;
• Îáðàçîâûâàíèå èíôðàñòðóêòóðû
îõðàíû;
1
Êомиссиÿ по рåгулированиþ коммуникаций Монголии.
Ñтатистика потрåбитåлåй интåрнåта. 2016 г.
 Implementation of Efficiency and Law

• Óòäâåðæäàòü è ïðèäåðæèâàòüñÿ ôайлов аудита, нåсôормированы

собствåнной политики и порÿдка длÿ систåма, кадровыå рåсурсы,
êàæäîé îðãàíèçàöèè; инôраструктура длÿ обнаружåниÿ и
• Ðåàëèçîâàòü ðåøåíèÿ îõðàíû, ôиксации доказатåльств от “умных”
основанныå на самооцåнкå риска и устройств, из-за чåго раскрытиå
àóäèòà; кибåрпрåступлåний находитсÿ на особо
низком уровнå. Íåдостаточноå развитиå
• Îáðàçîâûâàòü ñèñòåìó áîðüáû ñ
мåждународного сотрудничåства
êèáåðïðåñòóïëåíèÿìè;
сам собой отрицаåт возможности
• Îáðàçîâûâàòü ïðàâîâóþ çàùèòó раскрытиÿ транснациональных
è îõðàíó; кибåрпрåступлåний.
• Ïîâûøàòü îáùåñòâåííîå
знаниå, сознаниå о понÿтиå указанных
Îñíîâíàÿ часть
прåступных дåÿний.2
 практикå распространåны
Ñåгоднÿ ни длÿ кого нå
мошåнничåства, совåршåнныå
сåкрåт, что знаниå сотрудников
чåрåз элåктроннуþ почту, клåвåта,
правоохранитåльных органов по борьбå
вымогатåльство, нарушåниå тайны
с кибåрпрåступлåниÿми особåнно
пåрåписки, почтовых отправлåний
слабо, опыт работы нå большой,
граждан, нåправомåрный доступ к
нå сôормировались тåхничåскоå
компьþтåрным сåтÿм и систåмам,
снабжåниå и умåниå исслåдованиÿ,
модиôикациÿ инôормации и тому
правовоå урåгулированиå отсталоå,
подобноå.
различныå организации, в том числå
сами правоохранитåльныå органы
становÿтсÿ жåртвами кибåратак и
кибåрпрåступлåний, выполнåниÿ
пåрåработанной “Êонцåпции
Íациональной бåзопасности” и
принÿтой “Íациональной программы
инôормационной бåзопасности”
нåдостаточны, хотÿ были принÿты
давно. График №1. Глава 25 Уголовного кодекса3.
Киберпреступление против
 настоÿùåå врåмÿ правовоå информационной безопасности и
урåгулированиå по борьбå с использования компьютеров
кибåрпрåступлåниåм нåдостаточно. /2006 – 2016/4
Íå хватаåт тåхничåски срåдств,
квалиôицированных спåциалистов, Ñудÿ по данным послåднåго
способных получить данныå из дåсÿтилåтиÿ зарåгистрированных
вычислитåльных устройств, и прåступлåний по ст.ст.226-2295
пåрåвратить их в доказатåльства.
3
Уголовный кодåкс Монголии. 2002 г.
Ðàññëåäîâàíèå áîëüøèíñòâà 4
“Ñòàòèñòèêà ïðåñòóïëåíèé” /2006-2016 ãã/,
кибåрпрåступлåний уходит в тупик в Íациональноå полицåйскоå агåнтство.
свÿзи с тåм, что элåктронныå ôайлы, 5
Ñтатьÿ 226. Íàðóøåíèå, уíè÷òîæåíèå и ïîâðåæäåíèå
и содåржаùиåсÿ в них данныå нå êîìïüþòåðíîé èíôîðìàöèè èëè êîìïüþòåðíîé
ïðîãðàììû
считаþтсÿ доказатåльством. Ñтатьÿ 227. Íåправомåрноå завладåниå компьþтåрной
инôормациåй
Ðåãèñòðàöèÿ âû÷èñëèòåëüíûõ Ñтатьÿ 228. Èзготовлåниå либо сбыт спåциальных
устройств, выÿвлåниå и экспåртиза срåдств длÿ получåниÿ нåправомåрного доступа к
компьþтåрной сåти
2
Ë.Цогтбаÿр. “Theoretical and methodical basics of inves- Ñòàòüÿ 229. Ðàçðàáîòêà, èñïîëüçîâàíèå ëèáî
tigation of crimes in cyber environment”. УÁ., 2015, стр.150 распространåниå врåдоносных программ.

91
LAW REVIEW 2017 5(65)

особåнной части УÊ Монголии, их число когда счåтныå инôормации измåнÿþтсÿ

óâåëè÷èâàëîñü 3-4 ðàçà çà ïîñëåäíèå 5 обÿзатåльно уточнÿть по тåлåôону.
лåт. Îñóùåñòâëåíèå äåíåæíûõ ïåðåâîäîâ
Êаждый дåнь рåгистрируþтсÿ сотни проводить с крайнåй осторожностьþ,
кибåр атак из других государств. Ïо чтобы нå стать жåртвой прåступлåниÿ.
данным отдåлåниÿ кибåрбåзопасности Â Монголии 20 октÿбрÿ 2016
Ãлавного развåдыватåльного года был организован сåминар
управлåниÿ, видно что в апрåлå 2016 ïðåäñòàâèòåëåé Ôåéñáóê êîìïàíèè
ãîäà èç ÊÍÐ â íàøó ñòðàíó íàïðàâëåíî Àзиатских и Тихоокåанских стран.
22613 сообùåний о кибåратаках. Áыло Íа этом сåминарå выÿснилсÿ тот
çàðåãèñòðèðîâàíî èç ÑØÀ 4034 àòàê, ôакт, что в Монголии с одного до 1,6
çà ÑØÀ ñëåäóþò Þæíàÿ Êîðåÿ, ÐÔ миллион чåловåк зарåгистрировано
è Ôðàíöèÿ.6 Èз чåго видно, что наша в социальной сåти ôåйсбук, каждый
страна находитсÿ в зонå повышåнного дåнь примåрно 950 000 пользоватåлåй
риска. активно пользуþтсÿ услугами
 практикå Монголии ôåйсбук.8 Ïри провåдåнии анализа
распространåны такиå прåступлåниå и исслåдованиÿ в данной катåгории,
в сôåрå инôормационных тåхнологий: óñòàíîâëåíî, ÷òî 5-10% ïîëüçîâàòåëåé,
как мошåнничåство, вымогатåльство òî åñòü îêîëî 140 ìèëëèîíîâ ëþäåé
осуùåствлåнноå чåрåз элåктроннуþ используþт ôиктивныå адрåса.
почту и скимминг. Â послåднåå врåмÿ участились
За послåдниå три года в Монголии прåступлåниÿ, совåршåнныå
зарåгистрировано 51 мошåнничåство, лицами, имåþùими гражданства
совåршåнноå с использованиåм ñòðàí Àçèè, òàêèõ êàê Ôèëèïïèíû,
ýëåêòðîííîé ïî÷òû. Îò äàííûõ Ñèíãàïóð è Ìàëàéçèè. Ôàëüøèâûå
прåступлåний ïðè÷èíåí óùåðá аккаунты устанавливаþт свÿзь с
гражданам на 860,572,311 тугриков, нашими гражданами, путåм обмåна
хозÿйствåнным организациÿм на инôормациÿми и видåочата, собираþт
1,733,475,014 òóãðèêîâ, à âñåãî íà личныå интимныå и сåкрåтныå данныå
2,597,047,325 тугриков.7 граждан, а потом используþт их в
нåзаконных сдåлках. Ïрåступники
Ñовåршåниå мошåнничåства
добываþт нåзаконным путåм и копируþт
в кибåрпространствå происходит
видåозаписи, загружаþт их в вåбсайты,
чåрåз интåрнåт покупки, отправки
затåм путåм угроз и шантажа трåбуþт
смс, письмами, направлåнными чåрåз
крупныå суммы дåнåг у родствåнников,
элåктроннуþ почту о выйгрышå крупной
друзåй, близких лиц потåрпåвших.
суммы дåнåг, о получåнии наслåдства,
с письмами о помоùи. ×тобы нå Ñкимминг считаåтсÿ длÿ нас
стать жåртвами мошåнничåства с новым видам кибåрпрåступлåний.
использованиåм элåктронной почты, нå Можно опрåдåлить, что скимминг –
рåкомåндуåтсÿ использованиåм своåй это вид мошåнничåства, при котором
личной почты на обùåм компьþтåрå, злоумышлåнники считываþт всå
привÿзывать элåктронныå адрåса к нåобходимыå данныå с магнитной
номåрам мобильных тåлåôонов, всåгда полосы карты и изготавливаþт åå
провåрÿть адрåса элåктронной почты поддåльный аналог.9 Ïин-код они
свÿзываþùих организаций, в случаÿх, узнаþт с помоùьþ мини-камåры

6
Îòäåë êèáåðáåçîïàñíîñòè. http://ncsc.gov.mn/index. 8
Îò÷¸ò Îòäåëà ïî áîðüáå ñ êèáåðïðåñòóïíîñòüþ
php?id=135 Íационального Ïолицåйского агåнтства.
7
Îò÷¸ò Îòäåëà ïî áîðüáå ñ êèáåðïðåñòóïíîñòüþ 9
Êомсомольскаÿ правда. http://www.kp.ru/
Íационального Ïолицåйского агåнтства. daily/26555/3027133/

92
 Implementation of Efficiency and Law

или накладок на клавиатуру, изготавливаþт ôальшивыå банковскиå

установлåннуþ на банкоматå, а затåм, крåдитныå карты нå только Монголии,
используÿ сдåланный дубликат карты, но и других стран. Íапримåр, эти
снимаþт всå дåньги в прåдåлах лимита личности хакåрским прåступным
выдачи.10 Äанный вид прåступлåний способом крадут инôормации с чåрных
распространåны в развитых странах, лåнт банковских крåдитных карт таких
и в Монголии зарåгистрировано два банков, как “×åйз”, “Àй Ти Ýс” и т.д.
случаÿ. Åсли отмåтить нåдавний ÑØÀ и устанавливаþт на готовыå
ïðèìåð, ïðèáûâøèå 4 ãðàæäàíèíà èç матрицы, изготовлåнныå в Малайзии.
ÊÍÐ â íàøó ñòðàíó, íà áàíêîìàòû íàøèõ Таким образом, всÿ инôормациÿ
коммåрчåских банков установили хозÿина крåдитной карты попадаåт в
скимминг устройства на срок троå руки прåступников. Âообùå, мировыå
суток, скопировали нåзаконным путåм срåдства массовой инôормации врåмÿ
инôормациþ с крåдитных картов и от врåмåни сообùаþт о прåступных
пåрåдали в своþ страну, тåм самым группировках, спåциализируþùихсÿ
нанåсÿ уùåрб в размåрå 126,0 в прåступных дåÿниÿх, которыå
миллионов тугриков. упоминались вышå. Ïоэтому
Íачинаÿ с 2012 года на мåждународныå банки постоÿнно
тåрритории нашåй страны выÿвлåн улучшаþт и совåршåнствуþт систåму
рÿд прåступлåнии: похиùåниÿ крупных контролÿ, тåм самым прåсåкаþт
сумм дåнåг со использованиåм возможность мошåнничåства. Тот ôакт,
ôальшивых крåдитных карт из что в послåднåå врåмÿ эти прåступныå
банкоматов коммåрчåских банков элåмåнты стали в большом количåствå
гражданами Украины и Малайзии. Áыло внåдрÿтьсÿ в нашу страну, возможно
выÿвлåно прåступлåниå: гражданå свÿзано с нåсовåршåнной контрольно
Малайзии, использовав ôальшивыå – охранной систåмой коммåрчåских
крåдитныå карты коммåрчåских банков банков Монголии. Ýто свидåтåльствуåт
Монголии выкупили большуþ партиþ о нåобходимости корåнного улучшåниÿ
товаров в супåрмаркåтах и крупных охранной и контрольной систåмы
торговых цåнтрах. Установлåн ôакт, что банков.
они выкупив товары с отмåткой “брэнд” Âыводы и прåдложåниÿ
и пåрåвåзÿ их чåрåз государствåннуþ Õотÿ, назвать кибåрпрåступлåниÿ
границу рåализовали по болåå можно дåйствиåм с использованиåм
высоким цåнам. Ïри этом прåступники вычислитåльных устройств и
хакåрским способом внåдрÿлись в мåтодичåских мåтодов сåтåй
чужиå банковскиå счåта и ôальшивыми длÿ совåршåниÿ прåступной
платåжными картами расплачивались дåÿтåльности, трåбуþтсÿ точноå
за покупки.11 опрåдåлåниå данного понÿтиÿ,
Установлåно, что прåступники поскольку возникаåт много спорных
похитили дåнåжныå срåдства в вопросов. Äлÿ совåршåниÿ данных
ðàçìåðå ïðèáëèçèòåëüíî 45 ìèëëèîíîâ прåступлåний трåбуåтсÿ тåхничåскоå
тугриков. Установлåно, что они и программноå обåспåчåниå. Â главå
25, и в статьÿх 226-229 УÊ Монголии
10
Ë.Цогтбаÿр. “Theoretical and methodical basics of inves-
tigation of crimes in cyber environment”. ÓÁ., 2015, ñòð.294.
óêàçûâàþòñÿ 4 âèäà ïðåñòóïíûõ
11
Îáðàçîâàòåëüíîå ó÷ðåæäåíèå ïðîôñîþçîâ âûñøåãî
дåÿний против инôормационных
образованиÿ “Àкадåмиÿ труда и социальных отношåний” бåзопасностåй, которыå никак нå могут
Áурÿтский ôилиал. “Ñборник научных статåй по дать полного опрåдåлåниÿ понÿтиÿ
матåриалам мåждународной научно-практичåской
конôåрåнции, посвÿùåнной 20-лåтиþ образованиÿ кибåрпрåступности.
Áурÿтского ôилиала акадåмии труда и социальных
îòíîøåíèé”. ã. Óëàí-Óäý., 2015 ã. ñòð. 468.

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LAW REVIEW 2017 5(65)

Ñåгоднÿ в Монголии подготовку спåциалистов в области

совåршåнствованиå правовой срåды инôормационной бåзопасности, а
идåт нåдостаточным образом, закончившиå выпускники обладаþт
имååтсÿ мало квалиôицированных обùим знаниåм и отстаþт от
спåциалистов в сôåрå инôормационной соврåмåнных трåбований.
бåзопасности. Ñлабоå знаниå Âажной проблåмой борьбы
гражданами инôормационной с кибåрпрåступностьþ ÿвлÿåтсÿ в
бåзопасности, отсутствиå внутрåннåй пåрвуþ очåрåдь ôîðìèðîâàíèå
сåти государствåнной инôормации, áëàãîïðèÿòíîé ïðàâîâîé ñðåäû ,
бåсконтрольноå установлåниå подготовка высококвалиôицированных
различных свÿзåй в интåрнåтå, êàäðîâ /ñïåöèàëèñòîâ/, à òàêæå
нåдостаточноå использованиå обåспåчåниå надлåжаùих тåхничåских
программного обåспåчåниÿ. срåдств и оборудованиÿ.
Íашå государство в Êонцåпции
Íåобходимо в сотрудничåствå
о Íациональной бåзопасности,
с мåждународным государством
инôормационнуþ бåзопасность
осуùåствлÿть программу по
спåциально охарактåризовало как
исслåдованиþ проблåмы борьбы с
собствåнный вид бåзопасности, но до
кибåрпрåступностьþ, либо кибåр –
сих пор åùå нå принÿло основной закон
слåдоватåлåй, создать лабораториþ по
об инôормационной бåзопасности.
исслåдованиþ и анализу данного вида
 высших учåбных завåдåниÿх прåступлåний.
нåдостаточно вниманиÿ обраùаþт на

---o0o---

94

PROTECTING WITNESSES, VICTIMS AND OTHER
COOPERATING PERSONS
Galbaatar.L, Lawyer and
Legal Researcher
KEY WORDS
witnesses, victims, special protection
measures.
ABSTRACT
The revised Code of Criminal
procedure came into force on July 1,
2017. According to the Code of Criminal
procedure regulation on the protection
of witnesses and victims was newly
confirmed. Elements of the Victim and
Witness Protection Act of 2013 relating
to the Code of Criminal procedure.
Therefore, this article examines the
protective measures for witnesses and
victims of Mongolia.
INTRODUCTION
Researchers noted that at least one
in every four witnesses internationally
resigns from his/her own testimony
during the proceedings. Therefore, there
is a problem in the court proceeding
and the negative effect on the actual
results.1 The Mongolian Marshals service
was established by Resolution 7 of the
1
G.Battulga. A system for the protection of witnesses and
victims and emerging trends. Ulaanbaatar, Mongolia. June
10, 2016. p.5
95
Implementation of Efficiency and Law
Government of Mongolia in 2014, under
the direct supervision of the Ministry of
Justice, to support and protect victims
and witnesses from intimidation and re-
victimization. The Mongolian Marshals
service aided 34 witnesses in 2014 and
85 witnesses in 2015, ensuring the safety
of the witnesses and victims by actively
protecting them.
According to the researchers, there
were the following difficulties in the
protection of witnesses and victims from
the Mongolian Marshals service. These
include:
- The workload of investigators is
high and their knowledge of enforcement
of protection measures witnesses and
victims is not sufficient;
- There is no special security unit
for protection of witnesses and victims;
- No questionnaire or methodology
on how the judge or prosecutor is
assessing the level of risk and the
witnesses and victim’s risk;
- No technical equipment and
special budget for protection measures.2
The lawmaker underlined that revised
Criminal Procedure Code will resolve the
above problems and improved regulation
on protecting the rights of victims and
witnesses.3 Therefore, we need to
analyze the regulation on the protection
of witnesses and to propose how to apply
the regulation to the participants of the
criminal justice system.
2
I. Davaajamiyan. Current status of protecting witnesses
and victims and its legal regulation. June 10, 2016. p.39
3
A brief introduction to draft Code of Criminal procedure.
p.4 http://forum.parliament.mn/medias/30f9dbb9-ccaa-
4037-a016-eed5b87ad7f1.docx
LAW REVIEW
I. Whether the Mongolian
regulation on protection of witnesses
and victims is consistent with
international standards
There are several international
standards for protecting witnesses and
victims. We need to determine whether
the protection of witnesses and victims
in accordance with Articles 13.1-13.7
of Criminal procedure code /revised/
is consistent with those international
standards. It is important to use them
effectively.
1.1. Regulation of Mongolian
multilateral treaties4
1. Convention against Torture and
Other Cruel, Inhuman or Degrading
Treatment or Punishment5
The text of the Convention was
adopted by the United Nations General
Assembly on 10 December 1984 and,
following ratification by the 20th state
party, it came into force on 26 June
1987. Article 13 of the Convention state
that “Each State Party shall ensure that
any individual who alleges he has been
subjected to torture in any territory under
its jurisdiction has the right to complain
to, and to have his case promptly and
impartially examined by, its competent
authorities. Steps shall be taken to ensure
that the complainant and witnesses
are protected against all ill-treatment
or intimidation as a consequence of his
complaint or any evidence given.”
2. Declaration of Basic Principles of
Justice for Victims of Crime and Abuse of
Power6
This declaration was adopted by the
UN General Assembly on 29 November
1985. Article 6 of this declaration stated
4
List of multilateral treaties to which Mongolia is part
http://www.mfa.gov.mn/?page_id=29040#1485132523196-
a01c7d09-78b5
5
Convention against Torture and Other Cruel, Inhuman or
Degrading Treatment or Punishment http://www.ohchr.org/
EN/ProfessionalInterest/Pages/CAT.aspx
6
Declaration of Basic Principles of Justice for Victims of
Crime and Abuse of Power
http://www.un.org/documents/ga/res/40/a40r034.htm
96
2017 5(65)
about proper assistance to victims
throughout the legal process; measures
to minimize inconvenience to victims,
protect their privacy, when necessary, and
ensure their safety, as well as that of their
families and witnesses on their behalf,
from intimidation and retaliation.
3. Rome Statute of the International
Criminal Court7
The Rome Statute of the International
Criminal Court is the treaty that established
the International Criminal Court. It was
adopted at a diplomatic conference in
Rome on 17 July 1998 and it entered into
force on 1 July 2002. Article 68 of this
Statute is about protection of the victims
and witnesses and their participation in
the proceedings. Specifically, paragraphs
1-6 of article 68 stipulates that courts and
prosecutors protect the rights of victims
and witnesses. These include:
1. The Court shall take appropriate
measures to protect the safety, physical
and psychological well-being, dignity and
privacy of victims and witnesses. In so
doing, the Court shall have regard to all
relevant factors, including age, gender
as defined in article 7, paragraph 3, and
health, and the nature of the crime, in
particular, but not limited to, where the
crime involves sexual or gender violence or
violence against children. The Prosecutor
shall take such measures particularly
during the investigation and prosecution
of such crimes. These measures shall
not be prejudicial to or inconsistent with
the rights of the accused and a fair and
impartial trial.
2. As an exception to the principle of
public hearings provided for in article 67,
the Chambers of the Court may, to protect
victims and witnesses or an accused,
conduct any part of the proceedings
in camera or allow the presentation of
evidence by electronic or other special
means. In particular, such measures shall
be implemented in the case of a victim of
7
Rome Statute of the International Criminal Court http://le-
gal.un.org/icc/statute/99_corr/cstatute.htm

sexual violence or a child who is a victim
or a witness, unless otherwise ordered
by the Court, having regard to all the
circumstances, particularly the views of
the victim or witness.
3. Where the personal interests of
the victims are affected, the Court shall
permit their views and concerns to be
presented and considered at stages of the
proceedings determined to be appropriate
by the Court and in a manner which is not
prejudicial to or inconsistent with the rights
of the accused and a fair and impartial
trial. Such views and concerns may be
presented by the legal representatives of
the victims where the Court considers it
appropriate, in accordance with the Rules
of Procedure and Evidence.
4. The Victims and Witnesses Unit
may advise the Prosecutor and the Court
on appropriate protective measures,
security arrangements, counselling and
assistance as referred to in article 43,
paragraph 6.
5. Where the disclosure of evidence
or information pursuant to this Statute
may lead to the grave endangerment
of the security of a witness or his or
her family, the Prosecutor may, for the
purposes of any proceedings conducted
prior to the commencement of the trial,
withhold such evidence or information and
instead submit a summary thereof. Such
measures shall be exercised in a manner
which is not prejudicial to or inconsistent
with the rights of the accused and a fair
and impartial trial.
6. A State may make an application
for necessary measures to be taken in
respect of the protection of its servants or
agents and the protection of confidential
or sensitive information.
4. Optional Protocols to the
Convention on the Rights of the Child
on the involvement of children in armed
conflict and on the sale of children, child
97
Implementation of Efficiency and Law
prostitution and child pornography8
The United Nations General
Assembly adopted the treaty
as a supplementary protocol to
the Convention on the Rights of the
Child by resolution 54/263 on 25 May
2000. The protocol came into force on 12
February 2002. Article 8 of annex II to the
optional protocols stated about protecting
witnesses and victims. These include:
1. States Parties shall adopt
appropriate measures to protect the
rights and interests of child victims of the
practices prohibited under the present
Protocol at all stages of the criminal justice
process, in particular by:
a.Recognizing the vulnerability of
child victims and adapting procedures to
recognize their special needs, including
their special needs as witnesses;
b.Informing child victims of their
rights, their role and the scope, timing and
progress of the proceedings and of the
disposition of their cases;
c.Allowing the views, needs and
concerns of child victims to be presented
and considered in proceedings where
their personal interests are affected, in
a manner consistent with the procedural
rules of national law;
d.Providing appropriate support
services to child victims throughout the
legal process;
e.Protecting, as appropriate, the
privacy and identity of child victims and
taking measures in accordance with
national law to avoid the inappropriate
dissemination of information that could
lead to the identification of child victims;
f.Providing, in appropriate cases, for
the safety of child victims, as well as that
of their families and witnesses on their
behalf, from intimidation and retaliation;
8
Optional protocols to the Convention on the Rights of the
Child on the involvement of children in armed conflict and on
the sale of children, child prostitution and child pornography
http://www.un-documents.net/a54r263.htm
LAW REVIEW 2017 5(65)

g.Avoiding unnecessary delay in the Table 1.2. Adapting domestic law to

disposition of cases and the execution of international regulation on the protection of
witnesses and victims1011
orders or decrees granting compensation
Regulation
to child victims. of Criminal
Requirements set by
5. United Nations Convention against No procedure
international standards
code /
Transnational Organized Crime9 Revised/
The United Nations Convention Steps shall be taken to ensure
that the complainant and
against Transnational Organized Crime, witnesses are protected against
adopted by General Assembly resolution 1
all ill-treatment or intimidation as
55/25 of 15 November 2000, is the a consequence of his complaint
or any evidence given
main international instrument in the fight Taking measures to minimize
against transnational organized crime. inconvenience to victims, protect
It opened for signature by the Member their privacy, when necessary,
2 and ensure their safety, as well
States at a High-level Political Conference as that of their families and
convened for that purpose in Palermo, witnesses on their behalf, from
Italy, on 12-15 December 2000 and intimidation and retaliation
The Court shall take appropriate
entered into force on 29 September 2003. measures to protect the safety,
Article 25 of this convention stated that physical and psychological
“Each State Party shall take appropriate well-being, dignity and privacy
of victims and witnesses. The
measures within its means to provide Prosecutor shall take such
Article 13.1
(1, 2, 3):
assistance and protection to victims of 3 measures particularly during the
Protective
offenses covered by this Convention, in investigation and prosecution of
measures for
such crimes. These measures
particular in cases of threat of retaliation shall not be prejudicial to or
witnesses
and victims10
or intimidation. Each State Party shall inconsistent with the rights of
establish appropriate procedures to the accused and a fair and
impartial trial.
provide access to compensation and The Court may, to protect
restitution for victims of offenses covered victims and witnesses or an
by this Convention. Each State Party shall, accused, conduct any part of the
proceedings in camera or allow
subject to its domestic law, enable views the presentation of evidence
and concerns of victims to be presented by electronic or other special
and considered at appropriate stages of means. In particular, such
4 measures shall be implemented
criminal proceedings against offenders in in the case of a victim of sexual
a manner not prejudicial to the rights of violence or a child who is a victim
the defense.” or a witness, unless otherwise
ordered by the Court, having
1.2. Adaptation of the revised Code regard to all the circumstances,
of Criminal procedure to International particularly the views of the
victim or witness.
Treaties and Conventions Providing, in appropriate cases,
The international treaties and for the safety of victims, as well
Article 13.1
5 as that of their families and
documents ratified by Mongolia establish witnesses on their behalf, from
(3)
basic requirements for protecting intimidation and retaliation
witnesses and victims. The following
table shows how this requirement was
regulated in Article 13.1-13.7 of the
Criminal Procedure Code /revised/.

10
Code of Criminal procedure /Revised/. “State informa-
9
United Nations Convention against Transnational Orga- tion”. 2017, №23
nized Crime https://www.unodc.org/pdf/crime/a_res_55/ Law on Protection of Witnesses and Victims. “State infor-
11

res5525e.pdf mation”. 2013, №30

98
 Implementation of Efficiency and Law

Providing appropriate support prosecutors, and investigators. This is

6 services to child victims shown in table 2.1.b.
Article 13.1
throughout the legal process
(2-2.2).
Protecting, as appropriate, the
Article 17 Table 2.1.b. Protective measures for
privacy and identity of child
and article witnesses and victims13
victims and taking measures
18 of Law on
in accordance with national The person
7 Protection of The person
law to avoid the inappropriate who
Witnesses No Protective measures making the
dissemination of information that performs an
and Victims.11 decision
could lead to the identification of action
child victims An
organization
This table shows that the seven Prosecutor/ or an official
1 To restrict specific actions
basic requirements for the protection of judge to carry
out an
witnesses and victims in international investigation
agreements and documents are provided An
organization
in the Criminal Procedure Code (Articles Prosecutor/ or an official
13.1-13.7). It is therefore important that 2 To take on a guardian
judge to carry
effective and creative use of the protection out an
investigation
of witnesses is essential. An
organization
II. Cooperating with a judge, to provide for the
Prosecutor/ or an official
3 confidentiality and
prosecutor, investigator, and attorney anonymity
judge to carry
to protect witnesses and victims out an
investigation
The Criminal Procedure Code An
organization
(Section 13) regulates the involvement To provide special
Prosecutor/ or an official
4 equipment and
of judges, prosecutors, investigators communication equipment
judge to carry
out an
and lawyers in protecting witnesses and investigation
victims. Specifically, the Code provides To confidentiality, alteration
An
for measures to protect witnesses and organization
or removal of facts and
Prosecutor/ or an official
victims at the pre-trial and trial stages. 5 information such as name,
judge to carry
address, work place,
This is shown in table 2.1.a occupation and so on
out an
investigation
An
Table 2.1.а. Participants taking measures to To prohibit search and
organization
protect witnesses and victims 12 6 disclose information about
Prosecutor/ or an official
judge to carry
the victim's hidden identity
out an
Pre-trial/ investigation
Trial stage
investigation stage An
Participant Make a Make a To prohibit disclosure of organization
To To
proposal/ proposal/ 7
information during the Prosecutor/ or an official
resolve resolve period specified by the judge to carry
request request
Witness, court out an
investigation
victim, or
Yes Yes An
advocate organization
requesting Fraudulent names until the
Prosecutor/ or an official
Inspector Pro- 8 witness and victim’s name
Judge judge to carry
is opened
makes a Yes secutor No out an
proposal investigation
Prosecutor Testimony by using
makes a No Yes technical means for
9 - Judge
transferring image and
proposal
sound
Furthermore, section 13 of the To be presentable without
the presence of witnesses
Criminal Procedure Code provides for 10 witness, victim's testimony - Judge
all 11 protective measures to protect notes, audio, video, and
witnesses and victims from judges, audio recordings

12
Article 13.1 of Criminal procedure /Revised/. “State infor- 13
Article 13.1, 13.2 of Code of Criminal procedure /Re-
mation”. 2017, ¹23 vised/. “State information”. 2017, ¹23

99
LAW REVIEW
When witnesses and vic-
tims refuse to give testimo-
ny when the defendant is
in the courtroom or when
11 there is a situation where - Judge
witnesses and victims may
not be notified of the truth,
the courtroom temporarily
leaves the defendant
To attach to file case iden-
tity documents than a list of
name of witnesses and vic-
12
tims, and their parents not
Inspector
included in the investigation
notes
The important thing is that decisions
about the protection of witnesses and
victims are feasible and/or clear. It is
stated in paragraph 1 of Article 13.2 of
Criminal Procedure (revised version). In
particular, the decision to take protection
measures set out in the Law on the
Protection of Witnesses and Victims
includes the following:
- Type of protective measures for
witnesses and victims;
- Duration of protective measures
for witnesses and victims;
- Organization to implement
protective measures for witnesses and
victims;
- The law enforcement applied by
the authorities and officials during the
implementation of protective measures.
In addition, the knowledge and skills
of judges, prosecutors, investigators,
and attorneys are the main conditions
for decision-making and protection of
witnesses and victims. It is important to
organize joint training at international
and national levels and to share a mutual
experience. It should be noted that judges,
prosecutors, investigators, and lawyers
should have a clear understanding of the
conditions, requirements, and grounds for
2017 5(65)
protecting witnesses and victims. In this
context, it is necessary to adopt a new
approach to establish a risk level, which
is the basis for implementing security
measures to protect witnesses and
victims, It is also important to use a single
methodology and standard for authorized
officials and to create a unified database
Inspector of protection and protection of witnesses
and victims.14
CONCLUSIONS
Since the adoption of the Law on
the Protection of Witnesses and Victims,
there has been a need to effectively and
effectively protect witnesses and victims
and resolve some of the problems. The
settlement of this problem is reflected
in the new Criminal Procedure Code.
The new Criminal Procedure Code is in
compliance with several requirements for
the protection of witnesses and victims in
an international treaty to which Mongolia
is a party.
In the course of criminal proceedings,
proper protection of witnesses and victims
will depend on the specific and possible
implementation of measures to protect
witnesses and victims. In addition, judges,
prosecutors, investigators and lawyers
who have the duty to take measures
to protect witnesses and victims and
to implement them constantly improve
their knowledge and skills; To follow one
methodology and standards for setting
risk level risk; It is recommended that the
database is created and used further.
14
I. Davaajamiyan. Current status of protecting witnesses
and victims and its legal regulation. June 10, 2016. p.37, 40
---o0o---
100

DIE HISTORISCHE ENTWICKLUNG DES
SANKTIONENSYSTEMS IN DER MONGOLEI
(The Historical Development of the Criminal Sanctions System of Mongolia)
Dr.jur. Kh.Erdem-Undrakh
KEYWORDS
Transformation, Tradition, Criminal
sanction, Sanctions system,
EINLEITUNG/INTRODUCTION
Die historische Entwicklung des
mongolischen Strafrechts wurde in
diesem Artikel in mehrere Perioden
unterteilt. Sie beginnt mit den ersten
Kodifikationen aus dem frühen 13.
Jahrhundert als die ersten Rechts- und
Gedankenquellen bis zur Unabhдngigkeit
der Mongolei 1921. Danach folgen
das neuzeitliche Strafgesetzbuch von
1926 sowie die Gesetzesregelungen
wдhrend der sozialistischen Zeit bis zur
gesellschaftlichen Transformation zu
Anfang der 1990er Jahre (1926–1989).
In diesem Artikel wird die Entwicklung
des mongolischen Strafrechts bis zu den
1920er Jahren chronologisch aufbauend
behandelt. Wegen des Mangels an einer
kontinuierlichen Quellenьberlieferung
und wegen der Unvollstдndigkeit der
Gesetzeswerke zwischen dem 13. und
19. Jahrhundert war es hier nicht mцglich,
eine systematische und fortlaufende
101
Legal Researches, Summary, Results
Entwicklung aufzuzeigen. Aus diesem
Grund zeigt hier bis zum Anfang des 20.
Jahrhunderts eine ausschnitthafte, auf
die vorliegenden Quellen beschrдnkte
Darstellung. Zu jedem der o. g. Zeitpunkte
werden die normativen Kriminalsanktionen
samt deren Alternativen, ferner die
Umsetzung in die Gerichtspraxis – soweit
entsprechende Daten vorhanden sind –
sowie die jeweiligen Reformbestrebungen
und deren Hintergrьnde gezeigt.
1. Die erste Kodifizierung
des Strafrechts: Das „Ikh Zasag“1
von Dschingis Khaan aus dem 13.
Jahrhundert
1.1 Die Entstehung der ersten
geschriebenen Strafrechtsnormen
Wenn man die Stichworte „Mongolei“
und „Strafe“ in Zusammenhang hцrt,
denken viele wohl zunдchst an den
mongolischen Herrscher Dschingis Khaan
(1162–1227). Er war nicht nur im frьhen
13. Jahrhundert der Grьnder des ersten
Mongolenreiches und damit zugleich des
grцßten Reiches der Weltgeschichte,
sondern auch der Begrьnder des
mongolischen Rechtswesens2. Zu
den nachhaltigen Neuerungen von
Dschingis Khaan gehцrt die Einfьhrung
einer Schrift in die bis dahin praktisch
schriftlose Nomadengesellschaft, indem
er die Buchstabenschrift der Uiguren
ьbernehmen ließ. Damit schuf er die
Grundlagen, dass eine Kodifizierung
1
Das erste geschriebene Gesetzeswerk der Mongolen im
13. Jhd. hieß „Ikh Zasag“. In der westlichen Literatur ist es
meist bekannt als „Große Yassa“. „Zasag/Yassa“ bedeutet
„Vorschrift“, „Gesetz“ und „Verbot“; die Beschreibung „Gro-
ße“ hдngt damit zusammen, dass dieses Gesetz fьr alle
mongolischen Stдmme gleichermaßen gьltig war.
2
Nдheres dazu Selenge, 2004; Nyam-Osor, 1999; Nelle
2003, S. 51–52; Dashnyam, 1997.
LAW REVIEW
des damaligen Rechts ьberhaupt
mцglich war. Das frьheste uns bekannte
geschriebene Gesetz der Mongolen ist
das „Ikh Zasag“ von 1206, welches fьr die
Rechtsentwicklung der Mongolei als die
erste Rechts- und Gedankenquelle zдhlt.
Das „Ikh Zasag“ bestand hauptsдchlich
aus Gewohnheitsrecht. Dennoch es war
ein systematisiertes Recht, das sich auf alle
Lebensbereiche erstreckte und damit den
Grundbedьrfnissen des Nomadenvolkes
genьgte3. Einigen Quellen zufolge ьbertrug
Dschingis Khan seinem Adoptivbruder,
dem Tataren Shikhi-Khutug das Amt eines
obersten Richters (Rechtsprechung) und
die Aufgabe „gerichtliche Entscheidungen
und Urteile sowie die Abfassung
seiner Bestimmungen in die, Blauen
Hefte‘einzutragen“4. Daraus soll das „Ikh
Zasag“ entstanden sein. Anderen Quellen
zufolge wurde das „Ikh Zasag“ vermutlich
im Jahre 1206 aus der „Ikh Khurildai“5
verabschiedet und folglich 1210, 1218
und 1225 ergдnzt bzw. erweitert6.
Das „Ikh Zasag“ beinhaltete
neben zahlreichen strafrechtlichen
Normen auch die Vorschriften und
Edikte von Dschingis Khaan ьber
die Staats- und Militдrorganisation,
Außenbeziehungen und -handel,
Steuer und Eigentumsverhдltnisse,
Erb- und Familienangelegenheiten
sowie Umweltschutz, die teilweise
sehr alte Traditionen und Gebrдuche
festschrieben. Das „Ikh Zasag“ ist nicht
im Original erhalten geblieben. Sein
Inhalt ist nur mittelbar durch historische
3
Sovd, 1998, S. 27 ff.
4
Dashnyam, 2005, S. 273, 325.
5
Die offizielle Versammlung aller Personen königlicher Ab-
stammung, sowie von Staatsministern und Stammesfьrsten.
6
Siehe dazu die zahlreichen historischen Belege in unter-
schiedlichen Quellen Riasanovsky, 1965, S. 25 ff.; Dash-
nyam, 2005, S. 380; Dalai, Tsch.,1994.
102
2017 5(65)
Überlieferungen bekannt geworden7.
Eine Unterscheidung im heutigen Sinne,
welche Taten als Straftaten oder als
Ordnungswidrigkeiten galten, gab es
damals noch nicht. Es sind nur Gebote
und Verbote, zum Teil mit bestimmten
Strafandrohungen, aufgelistet. Hinsichtlich
der Reihenfolge der Straftaten kann von
einer nachvollziehbaren Systematik kaum
die Rede sein.
Aus dem Grund der Reinhaltung der
Familie war auch die Verletzung bestimmter
Moralvorstellungen mit Strafe bedroht,
wie etwa Ehebruch, außerehelicher
Sexualverkehr8. Fьr bestimmtes
Verhalten bzw. Zuwiderhandlungen sah
das Gesetz die jeweiligen Sanktionen
vor. Was die Tatbestдnde betrifft, lassen
sich aus den historischen Quellen
folgende Schwerpunkte der gesetzlichen
Regelungen herauslesen9:
Eine Gruppe sind Delikte gegen die
Interessen des Staats und der Verwaltung.
Dazu gehцren u. a. Straftaten wie die
Nichteinhaltung der Gesetze und von
Befehlen des Khaans, Hochverrat, der
Versuch unrechtmдßig Khaan zu werden,
und das Vortдuschen einer Botschafter-
Funktion. Als Delikte gegen das
Vermцgen zдhlt das „Ikh Zasag“ außer
Diebstahl und Raub die Unterschlagung
(die Veruntreuung und das Behalten
eines gefundenen Gegenstandes),
Sachbeschдdigung und dreimaligen
Bankrott als strafbares Handeln. Zu
den Delikten gegen das Leben und
7
Europдische Gesandtenberichte, wie die des Johann
von Plano Carpini, Wilhelm von Rubruk und Marco Polo
beschreiben teils auf persцnlichen Erfahrungen basie-
rend und teils auf zuverlдssige Quellen gestьtzt viele De-
tails ьber Dschingis Khan und die Geschehnisse aus der
damaligen Zeit und sind in deutscher oder auch in mon-
golischer Sprache zu finden. Nдheres dazu in: von Plano
Carpini, übers., 1997; von Rubruk, übers., 1934; Alinge
1935, S. 199 ff.); Vernadsky, 1992; http://www.mongo-
len-dschingis-khan.de/seite-7.html (15.08.2012); Wolfrum
2006, S. 5–17.
8
Einige „Ikh Zasag“-Forscher versuchten die strafrechtli-
chen Regelungen dieses Gesetzes nach den Tatbestдnde
zu systematisieren, siehe ausfьhrlicher Dashnyam, 2005, S.
355 ff.
9
Nicht wenige „Ikh Zasag“-Forscher versuchten mit Hilfe
der vorhandenen Quellen zu systematisieren, dazu Jantsan,
S., 2007, S. 14 ff.

die Gesundheit von Personen werden
etwa die Tцtung, Kцrperverletzung
und Vergiftung genannt. Manche
dieser enthaltenen Delikte richten sich
gegen den Umweltschutz (Anzьnden
des Weidelandes, Verunreinigung
der Gewдsser und Sodomie. Manche
Sittenverstцße waren gesetzlich
verboten, wie etwa das Urinieren in Asche
oder Wasser, Schreiten ьber Feuer oder
Essen, Respektlosigkeit der Kinder gegen
ihre Eltern usw.
1.2 Zweck und Arten der
Sanktionen
Was verstand man unter Strafe
und welchen Zweck hatten die
Strafen in damaliger Zeit? Stand der
Vergeltungsgedanke im Vordergrund
oder nicht? Welche Sanktionsformen und
traditionelle Konfliktschlichtungsmethoden
gab es zu dieser Zeit? Anhand dieser
Fragen werden in diesem Abschnitt
der Zweck der Sanktionen und die
Sanktionspolitik (wenn man es ьberhaupt
so nennen darf) im frьhen Mittelalter der
Mongolei nдher behandelt.
Die Aufgabe dieses Kodex war in
erster Linie, das Zusammenleben der
unterschiedlichen Steppenvцlker im neu
gegrьndeten Reich zu regeln. Die Kernidee
der Sanktionspolitik der damaligen
Gesetzgebung war es, die Einigkeit der
mongolischen Stдmme zu befestigen, die
Unabhдngigkeit und den Staatsaufbau zu
sichern, die Sicherheit des Khaans, von
Beamten und des Volkes, sowie deren
Leben, Gesundheit, Eigentum, Sitten und
103
Legal Researches, Summary, Results
Gebrдuche vor Verbrechen zu schьtzen10.
Von den meisten Wissenschaftlern wird
angenommen, dass der Kodex zugleich
der erste Versuch einer Verstaatlichung
und Zentralisierung des Strafens war11.
Dieser Kodex diente dazu, Ruhe und
Ordnung im gesamten Volk zu sichern
sowie sozial schдdliches Verhalten wie
Diebstahl, Raub, Mord, Unruhestiftung,
Trunkenheit, Lьge, Betrug, Staatsverrat
und Ehebruch zu verhindern (der Gedanke
der Generalprдvention). Neben dem
Gedanke der Sicherung der Allgemeinheit
und der Befestigung des Staatsaufbaus
im Mittelpunkt war auch der vergeltende
Zweck der Strafe von entscheidender
Bedeutung.
Aufgrund des Mangels an
erhaltenen Gesetzeswerken sind die
Formen der Strafe nur durch Schriften
und Berichte aus unterschiedlichen
Quellen nachweisbar. Das „Ikh Zasag“
wurde – wie oben erwдhnt – nicht nach
bestimmten Ordnungsprinzipien gestaltet,
eine Unterteilung der Rechtsgebiete
nach moderner Systematik fehlt12. Daher
kann man schwer erkennen, welche
Sanktionen fьr Verbrechen und welche
fьr Sittenwidrigkeiten vorgesehen wurde.
Nach den unterschiedlichen historischen
Quellen sollen zu dieser Zeit folgende
10
Dies sind im grцßten Teil die Schutzgьter des heutigen
Strafgesetzbuches der Mongolei. Dashnyam 1997, S. 170;
Boldbaatar/Lundeeshanzen, 1997, S. 76. Eine Legende,
die aus dem 13. Jahrhundert stammt, berichtet folgendes:
„Eine Jungfrau mit einem Topf Gold auf dem Kopf kann den
Weg von einem Ende des Reiches bis zum anderen Ende
zurьcklegen, ohne dass ihr und dem Gold etwas geschieht“.
Auf dem Land ist dieser mongolische Frieden auch heute zu
erleben. Ein Beispiel dieser nomadischen Tradition existiert
heute noch: Man kann auf dem Land zu Jurten kommen, die
offen stehen und deren Besitzer weit und breit nirgendwo zu
sehen sind. Die Tьr der Jurte bleibt absichtlich offen. Das
hat nichts mit einer mangelnden Furcht vor Dieben zu tun,
der Grund ist ein anderer: Es kцnnte ja sein, dass jemand
des Weges kommt und z. B. wegen eines Unwetters oder
wenn er sich verlaufen hat, Schutz oder Nothilfe braucht. In
solchen Fдllen darf er eintreten und im Schutz der Jurte das
Unwetter abwarten, oder warten bis die Nomadenfamilie
von der Weide zurьckkommt.
11
Selenge, 1995, S. 15 ff.; Sovd, 1973, S. 28; Narangerel,
1999, S. 39 ff.
12
Einige Wissenschaftler haben versucht die Systematik
diesen Kodex wieder herzustellen, vergleiche dazu Bold-
baatar/Lundeeshanzen, 1997, S. 76.
LAW REVIEW
Arten von Strafe verwendet worden sein13:
a) Todesstrafe (tsaazlan alah) –
tsaazlah bedeutet sowohl „Verbot“ als
auch „Todesstrafe“ in der mongolischen
Sprache. Daher war es häufig der Fall, dass
manche Wissenschaftler und Historiker
die Bedeutung des Wortes verwechselten,
was zu vцlligen Verfдlschungen fьhrte14.
Zum Beispiel wurde der Text von
Fragment 4 des Ikh Zasag15 fehlerhaft
ьbersetzt: „Wer in Asche oder Wasser
harnt, wird mit dem Tode bestraft“ Nach
der wohl richtigen Leseart heißt es
jedoch nur: „Es ist verboten in Asche
oder Wasser zu harnen“ Auch Fragment
32 wurde so missverstanden „… Ebenso
soll man den tцten, der mit dem Fuß auf
die Schwelle des Zeltes des Heerfьhrers
tritt“16. All diese Regelungen sagen bloß
aus, dass solche Verhaltensweisen
verboten sind. Auf der Grundlage
solcher falschen Übersetzungen bzw.
Missverstдndnisse wurde dieser Kodex
oftmals als ein ьberhartes Gesetz mit
maßlosen Strafen beurteilt17. Tatsдchlich
wurden solche „Sittenverstöße“ häufig mit
Auspeitschen bestraft (siehe unten), aber
nicht mit der Todesstrafe. Im Gegensatz
zur verbreiteten Vorstellungen war dieses
Gesetz keineswegs von Grausamkeit und
ьbertriebener Hдrte geprдgt, sondern im
Gegenteil weniger streng als etwa das
Recht anderer orientalischer Lдnder18.
Schon fьr die Erhaltung der Wehrkraft
wдre es bei der zahlenmдßig schwachen
Bevцlkerung nicht sinnvoll gewesen,
bereits bei vergleichsweise geringfьgigen
13
Es gibt unterschiedliche Aufzдhlungen der Strafen, dazu
Vernadsky, 1992, S. 29; Dashnyam, 2005, S. 361; Jantsan,
S., 2007, S. 17.; Narangerel, 1999, S. 38.
14
Zu dieser Ansicht siehe Dashnyam, 2005, S. 361 ff, 381.
15
Diese Nummerierung steht nur fьr die Aufzдhlungen der
Fragmente aus verschiedenen Quellen, die Alinge (1935) in
seinem Buch fьr den gesammelten Gesetzestext verwendet
hat.
16
Dazu Alinge 1935, S. 119 ff.
17
13 (14) von 36 verbotene Verhaltensweisen in diesem
Gesetz seien durch die Todesstrafe angedroht, so in Sovd
1973, S. 28; Selenge, 1995, S. 50; Riasanovsky, 1965, S.
35.
18
Siehe dazu die Anmerkungen in Fußnoten Nelle 2003, S.
52; Riasanovsky, 1965, S. 40.
104
2017 5(65)
Sittenverstцßen, insbesondere wie oben
geschildert, die Todesstrafe anzuwenden
– ein solches Strafrecht hдtte die
Bevцlkerung vermutlich bald dezimiert.
Die Todesstrafe sah das „Ikh Zasag“
hauptsдchlich fьr Mord, verabredete
Lьge, Ehebruch, Sodomie, Zauberei,
Unterschlagung und wiederholten
Bankrott vor. Der zivile und militдrische
Ungehorsam wurde den allgemeinen
Rechtsverletzungen gleichgestellt. Fьr
„schwere“ Diebstдhle wurde allgemein
die Todesstrafe angedroht. Dem Opfer
mussten dazu noch die Ehefrau und das
Vermцgen des Diebes gegeben werden,
wдhrend fьr kleinere Diebstдhle die
Prьgelstrafe vorgeschrieben war.
Die Todesstrafe wurde auf
verschiedene Arten vollstreckt, durch
Zerteilen mit dem Schwert, durch Brechen
des Rьckgrats, durch Ersticken mit
Filzstьcken oder Erschlagen mit einem
Stock. Aus Respekt vor ihrer Herkunft
wurden bei Adligen solche Arten benutzt,
bei der kein Blut vergossen wird, wie
zum Beispiel das Rьckgrat brechen oder
das Ersticken mit Filzstьcken, wдhrend
normale Bьrger mit dem Schwert getцtet
oder totgeschlagen wurden19. Zum
Tode konnte nur verurteilt werden, wer
entweder auf frischer Tat ergriffen worden
war oder die Tat gestanden hatte. Dieser
Grundsatz, dass eine Verurteilung nur bei
(eventuell durch Folter zu erzwingendem)
Gestдndnis erfolgen kann, galt vor
mongolischen Gerichten noch bis etwa
1921. Im geltenden Recht gilt das
Tatgestдndnis im Gegenteil zu dieser als
strafmildernder Umstand.
Das Pferd stellte den Mittelpunkt der
mongolischen Gesellschaft dar. Daher
galten beim Pferdediebstahl spezielle
Vorschriften wie in Fragment 2920: „Der, bei
dem ein gestohlenes Pferd gefunden wird,
ist verpflichtet, es seinem Herrn mit neun
gleichwertigen Pferden zurьckzugeben.
Ist er hierzu nicht imstande, so soll man
19 Dashnyam 2005, S. 381.
20 Alinge 1935, S. 120; Dashnyam, 2005, S. 359 ff.

ihm statt der Pferde seine Kinder nehmen,
und den, der keine Kinder hat, soll man
abschlachten wie einen Hammel“. Aus
heutiger Sicht erscheint diese Regelung
sehr hart, aber man muss bedenken,
welche existenzielle Bedeutung das
Vieh, insbesondere die Pferde, fьr das
Nomadenleben hatten. Das Vieh war
die absolute Existenzgrundlage der
Nomaden, ohne die ein Überleben in
der extremen mongolischen Natur nicht
mцglich war. Ohne Vieh kann das Leben
der Nomaden nicht existieren. Daher
wurde diese Straftradition, Viehdiebe
strenger zu bestrafen als einfache Diebe,
von Generation zu Generation bis zur
Gegenwart bewahrt.
b) Prьgelstrafen bzw. das
Auspeitschen als Leibstrafe (tashuurdah
oder shiidemdeh), galten je nach der
Schwere der begangenen Taten als
Schuldausgleich. In den historischen
Quellen findet man Bemerkungen,
dass diese Sanktion sehr häufig
angewandt worden sind. Zum Beispiel
3, 7 oder 37-mal Auspeitschen im
Falle der Gesetzesьberschreitungen21,
insbesondere bei Sittenwidrigkeiten,
wie etwa Harnen in Asche oder Wasser,
Schreiten ьber Feuer oder Essen. Dies
diente nicht nur (unbedingt) als eine
strafrechtliche Sanktion (Kurt Alinge,
S. 120, Fragment [27]), sondern auch als
Sanktion gegen Ordnungswidrigkeiten
wie im heutigen Sinne.
c) Eine Viehstrafe/Vermögensstrafe
(torgoh) wurde in der Regel fьr
weniger schwere Delikte wie z. B. bei
Unterschlagung als alternative Strafe
angewandt.
d) Blutgeld (zoliosloh) wurde
anscheinend bei Tцtungsdelikten, die
von Auslдndern verьbt wurden, als Strafe
praktiziert. In historischen Quellen ist
z. B. in Fragment 28 folgendes zu finden
22
: „Von der Bestrafung wegen Tцtung
21
Dashnyam, 2005, S. 358.
22
Alinge 1935, S. 120; Riasanovsky, 1965, S. 37; Avirmed/
Dashtseden/Sovd, 1997, S. 24.
105
Legal Researches, Summary, Results
kann man sich mit einer Buße loskaufen.
Bei einem Mohammedaner mit vierzig
Goldstьcken, bei einem Chinesen mit
einem Esel“.
e) Anlegen eines Halsblocks
(dunguluh) diente damals sowohl als
Sicherungsmaßnahme fьr Straftдter als
auch als eine Bestrafung.
f) Das Einsperren im Nukhen ger
(großes Erdloch, worauf eine Jurte
aufgebaut war) diente hauptsдchlich als
Sicherungsmaßnahme fьr Straftдter.
Aufgrund der Nomadenkultur war
es wahrscheinlich keine praktikable
Lцsung Gesetzesbrecher fьr lдngere
Zeit einzusperren. Da Nomaden nicht
sesshaft sind und je nach der Jahreszeit
naturbedingt mehrmals umziehen
mьssen, daher gab es damals schon
aus logistischen Grьnden keine
Gefдngnisstrafe im eigentlichen Sinne.
Außerdem kannte das „Ikh Zasag“
die Strafbefreiung bzw. den Gedanken
der Begnadigung fьr bestimmte Gruppen.
Nicht nur fьr die Tausendschafts- und
Zehntausendschaftsfьrsten sowie die
ihm treu ergebenen Gefolgsleute wie der
große Richter Shikhi-Khutug, sicherte
der Dschingis Khaan bei neunmaligen
Vergehen bzw. Verbrechen eine
Straffreiheit zu. Selbst manche seiner
Feinde, die ihm die Ehrenhaftigkeit
ihrer Taten beweisen konnten, durften
Straffreiheit erlangen23. Das ist ein
Beleg dafьr, dass der Gedanke einer
Strafbefreiung in der Mongolei auf eine
sehr alte Tradition zurьckzufьhren ist.
Abschnitt 2. Die Weiterentwicklung
des Strafrechts bis zum 20. Jahrhundert
Das „Ikh Zasag“ blieb bei den
Nachfolgern von Dschingis Khaan
bis zum Ende des 13. Jahrhunderts
in Geltung. Sein Einfluss ist jedoch
in den nachfolgenden mongolischen
Gesetzesschriften wie dem Kodex der
Yuan-Dynastie („Ikh Yuan gurny tsaajin
23
Amar, A. 1989, S. 125.
LAW REVIEW
bichig“) von 1320, dem Altan-Khan-Kodex
(„Altan Khany tsaajin bichig“) aus dem
16. Jahrhundert, Mongol-Oirat-Kodex
(„Mongol-Oiradyn tsaajin bichig“) von
1640 und die Khalkha-Ordnung („Khalkh-
Djuram“) von 1709 teilweise zu finden24.
Da diese Gesetze fьr diese Arbeit keine
große Rolle spielen, sollen sie hier nur
kurz erwдhnt werden25.
2.1 Der Kodex der Yuan-Dynastie
von 1320
Dschingis Khaans Enkelsohn
Khubilai eroberte China und begrьndete
dort die Yuan-Dynastie, die in Beijing von
1279–1368 China mitsamt der Mongolei
regierte. In diesem Zeitraum galt der
„Kodex der Yuan-Dynastie“ von 1320,
die spдter fьr die Zeit von weiteren acht
Nachfolgern des Khaans seine Geltung
hatte. Der Kodex der Yuan-Dynastie
bestand aus 10 Teilen, 60 Abschnitten
und 2391 Paragraphen26. Es regelte
wie das „Ikh Zasag“ unterschiedlichste
Rechtsgebiete. Der fьnfte Titel enthielt
die strafrechtlichen Vorschriften gegen
Diebstahl, Raub (bulaalt, deerem), Betrug
(zalilan mehleh, huurah), Tдuschung und
Tцtungsdelikte27.
Durch dieses Gesetz wurden
hauptsдchlich Kцrperstrafen angewandt.
In dem Kodex sind tuivandakh (Schlagen
mit einem kurzen Holzbrett bis zu 57-
mal), chavchragadakh (Schlagen mit
einem lдngeren Holzbrett 67–107-
mal), dungulukh (Fußblock tragen),
uiltguuleh (schwere kцrperliche Arbeit
leisten, eine Art Zwangsarbeit), tsulukh
(Verbannung in weitentfernte Gebiete
oder Gebiete mit schlechten Lebens-
bzw. Wetterbedingungen) und alakh
(Todesstrafe) als Sanktionsformen
24
Riasanovsky, 1965, S. 33; ausführlicher Nyam-Osor, N.,
1999.
25
Nдheres zu diesen Gesetzsammlungen s. auch Dendev,
1936; Jalan-Aajav, 1958; Sodovsuren, 1989; Heuschert, D.
1998.
26
Dalai, Tsch. 1973; Dalai Tsch. 1992, S. 719.
27
Sovd, G. 1973, S. 29.
106
2017 5(65)
vorgesehen28. Dieses Gesetz behandelte
die Mongolen als Eroberer und die
Chinesen als Untertanen unterschiedlich29.
Chinesische Straftдter mussten z. B. im
Gefдngnis ihr Essen selbst bezahlen, die
mongolische Straftдter dagegen nicht,
der Staat sollte die Kosten fьrs Essen
ьbernehmen. Brandmarkung, deren
Wurzel jedoch eher auf chinesische
Rechtstradition zurьckzufьhren ist, hatte
eine Funktion der Stigmatisierung der
Verbrecher. Beispielsweise wurden die
Chinesen wegen Diebstahl beim ersten
Mal auf der linken, beim zweiten Mal auf
der rechten Schulter, beim dritten Mal
auf dem Nacken mit einer Tдtowierung
versehen, aber es war verboten die
mongolischen Diebe so zu behandeln30.
Wenn mildernde Umstдnde vorlagen,
konnte die Strafe durch Lцsegeld ersetzt
(Ersatzgeldstrafe) oder die Tдter ganz
von der Strafe befreit werden. Personen,
die ьber 70 und unter 15 Jahre alt waren,
oder Schwerkranke, welche die Strafe
nicht ertragen bzw. leisten kцnnen, durften
daher von der Strafe befreit werden31.
2.2 Der Altan-Khan-Kodex (1507–
1582)
Der Altan-Khan-Kodex stammt
aus dem 16. Jahrhundert32. Die
Besonderheiten dieses Gesetzes sind,
dass außer der Prьgel- und Todesstrafe
die Geldstrafe und Sachbuße mit Vieh-
und Vermögenskonfiskation in das
mongolische Strafrecht neu eingefьhrt
wurde. Bei Tцtungsdelikten (dazu zдhlten
zu dieser Zeit Mord, Tцtung eigener Kinder,
Tцtung durch vorsдtzliche Brandstiftung,
oder wenn jemand aus Fahrlдssigkeit
einen Brand verursacht und dadurch
einem anderen das Leben genommen
hat, oder jemand verursacht den Tod
28
S. nдheres zu diesem Gesetz: Avirmed, Dashtseden &
Sovd 1997, S. 33 ff.; Dalai 1973, S. 76 ff.
29
Boldbaatar/Lundeeshanzen, 1997, S. 99.
30
Dalai 1973, S. 76.
31
Boldbaatar/Lundeeshanzen, 1997, S. 117-121.
32
Nдheres zu diesem Gesetz: Altangerel, T. 1999; Jantsan.
S., 2007, S. 22 ff.

eines anderen Menschen durch Tiere
wie Hunde oder Kamelhengst usw., wird
außer der Todesstrafe eine Sachbuße
verhдngt. Außerdem mьssen die engeren
Familienangehцrigen des Beschuldigten
einen Schadensersatz fьr die Opferfamilie
zahlen. Die Sachbuße wird in „Neun Stьck
Vieh“ verhдngt. Ein „Neuner“ bestand
aus 2 Pferden, 2 Rindern und 5 Schafen
oder Ziegen. Der Tдter musste je nach
der Schwere seiner Straftat 1 Neuner, 3
Neuner, 5 Neuner oder 9 Neuner zahlen.
Seit dieser Zeit gehцrte die Sachbuße in
„Neuner“-Einheiten zu den traditionellen
Strafen in der Mongolei.
2.3 Der Mongol-Oirat-Kodex von
1640
Der Mongol-Oirat-Kodex von 1640
zдhlt zu den bedeutendsten Rechtsquellen
der mongolischen Nomaden33. Wegen
der internen Uneinigkeit zersplitterte die
Mongolei in drei Teile, die Zentral- und
Nordmongolei (Khalkha), Sьdmongolei
(Innere Mongolei) und Westmongolei
(Djungar bzw. Oiraten). Im Jahr 1633
unterwarf sich die Sьdmongolei der
mandschurischen Herrschaft. Zur
Stabilisierung des inneren Friedens und zur
Abwehr des дußeren Feindes, der immer
mдchtiger gewordenen Mandschurei,
versammelten sich 1640 die Khans und
Fürsten der 44 mongolischen Stämme
aus der West- und Nordmongolei sowie
auch Stammesfьrsten von Khukh Nuur,
aus Tibet und der Wolgakalmьcken34. Als
Ergebnis beschlossen sie den Mongol-
Oirat-Kodex, der in den Gebieten der
verbьndeten Fьrsten Gьltigkeit haben
sollte.
Die meisten Bestimmungen in
diesem Kodex behandeln Verbrechen
(Tatbestдnde) und Strafen. Zum ersten Mal
in der mongolischen Strafrechtsgeschichte
hat der Mongol-Oirat-Kodex klar definiert,
33
Zusammenfassend zu diesem Kodex siehe Altangerel
2001; Jantsan. S., 2007, S. 29 ff.
34
Ausführlicher zur geschichtlichen Entwicklung bis 1640:
Riasanovsky 1965, S. 9 ff.; S. 46-52.
107
Legal Researches, Summary, Results
was der Gegenstand der durch das
Gesetz geschьtzten Interessen (durch das
Strafrecht zu schьtzende Rechtsgut) ist35.
Außerdem wurde gesetzlich verankert,
dass ein Verbrechen durch Unterlassung
bei im Gesetz vorgesehenen Fдllen
verfolgt werden kann. Sowohl die Zahl
der Tatbestдnde als auch der Strafarten
wurden massiv ausgebaut. Beispielsweise
unterscheiden sich bei Tцtungsdelikten die
Tatsubjekte und Tatobjekte (Tцtung eines
Adeligen durch einen anderen Adeligen,
durch jemanden von unterer Abstammung
oder durch seinen Diener, Tцtung des
Ehemanns durch seine Ehefrau, Tцtung
einer Witwe usw.) und dementsprechend
differenziert sind die Strafen angedroht.
Die Adeligen wurden leichter bestraft als
Angehцrige der mittleren und niedrigen
sozialen Schichten36.
Folgende Arten der Sanktionen
wurden im Mongol-Oirat-Kodex
vorgesehen: (1) Todesstrafe, (2)
Vermögenskonfiskation, (3) urag turliig
ni haah (Auflösung der rechtlichen
Bindungen zur gesamten Familie, die
genaue Ausgestaltung dieser Sanktion
konnte nicht ermittelt werden), (4)
Beschlagnahmung des Vermцgens,
Vertreibung von Ehefrau und Kindern
und anschließende Todesstrafe, (5)
Abschlagen von Gliedmaßen (besonders
Hдnde, Finger, Ohren usw.), (6)
Verelendung der Tдter (das Vermцgen
des Tдters wird beschlagnahmt und
die Viehbestдnde werden verteilt), (7)
Einsperren in ein Erdloch, (8) Schlagen
mit Holzstцcken, (9) Sachstrafe (Vieh
und sonstige wertvolle Sachen), (10)
Postenabsetzung, (11) der Beschuldigte
soll sich zu der Opferseite geben,
(12) Verbannung, (13) Foltern der
Gliedmaßen, (14) Arrest, (15) öffentliches
Tadeln und (16) Versklavung37. Vermutlich
kamen die umfangreichen Strafarten
und Tatbestдnde daher zusammen,
35
Altangerel, T. 2001, S. 93-96.
36
S. dazu Sovd 1973, S. 34.
37
Nдheres dazu s. Sovd 1973, S. 30 ff.; Riasanovsky, 1965,
S. 50ff.; Avirmed/Dashtseden/Sovd,1997, S. 73–75.
LAW REVIEW 2017 5(65)

weil die (gesetzgebenden) Fьrsten aus konnte ein Dieb von milderen Strafen bis
unterschiedlichen Gegenden stammen, zum Tod bestraft werden39.
wo es unterschiedliche Kulturen und
Sitten gab. So wurde von jedem die eine
2.5 Die mandschurische
oder andere Strafart ьbernommen und
Gesetzgebung für die Mongolei (1789–
im Endergebnis ein ganzer „Katalog“
1911)
zusammengestellt.
2.5.1 Historischer Hintergrund
Die mandschurische Gesetzgebung
1.4 Die Khalkha-Ordnung
fьr die Mongolei von 1789 galt zwar nicht
(Khalkha-Djuram) von 1709
als „rein“ mongolische Gesetzgebung,
Die Khalkha-Djuram ist in der hatte aber in der Kolonialherrschaft
mongolischen Rechtsgeschichte ebenfalls der Mandschurei ьber zweihundert
von großer Bedeutung, wie das Ikh Zasag Jahre hinweg bis zum Anfang des
von 1206, der Kodex der Yuan-Dynastie 20. Jahrhunderts (bis zur Moderne)
von 1320 und der Mongol-Oirat-Kodex von ihren Einfluss in der mongolischen
1640. Die Khalkha-Djuram war ebenfalls Rechtsgeschichte.
eine Gesetzessammlung, die zwischen
Die im 17. Jahrhundert beginnende
1709 und 1796 von mehreren khalkha-
mandschurische Kolonialherrschaft ьber
mongolischen Fьrstenversammlungen
die Mongolei dauerte ohne Unterbrechung
verabschiedet wurde. Wie der Name
ьber 220 Jahre lang. Im Jahr 1633 ging die
dieses Gesetzes schon verrдt, galt
Innere Mongolei an die Mandschu, danach
es nur in den khalkha-mongolischen
mussten sich 1691 die Khalkha-Mongolen
Gebieten (Zentral- und Nordmongolei).
unter deren Herrschaft unterwerfen. Nach
Die Besonderheit dieses Gesetzeswerk
mehrmaligen schweren Kдmpfen wurden
ist es, dass es noch wдhrend der
1758 auch die Westmongolen40 annektiert.
mandschurischen Kolonialzeit gьltig war.
So wurde bis 1911 die gesamte Mongolei
Wie seine Vorgдngergesetze regelte es
unter mandschurische Herrschaft
mehrere Rechtsgebiete. Darunter sind
gebracht.
zahlreiche strafrechtliche Vorschriften.
Kennzeichnend fьr diese Periode war
Was die Sanktionsformen betrifft
ein stark zentralisiertes Verwaltungssystem
sah das Gesetz eine umfangreiche
mit mandschurischer Beamtenschaft. Die
Palette von Strafen vor, nдmlich die
Gesetze von 1789 wurden speziell fьr
Todesstrafe, Verbannung, Prьgelstrafe,
die mongolische Untertanen erlassen,
Vermögenskonfiskation, Versklavung,
die ursprьnglich zwar nur fьr die Innere
Postenabsetzung, Gefдngnishaft und
Mongolei bestimmt waren (1696), deren
Viehstrafe38 (entsprechend einer Geldstrafe
Geltungsbereich aber auf die Äußere
im heutigen Sinne). Die Prьgelstrafe
Mongolei ausgedehnt wurde. In diesem
und die Vermögenskonfiskation wurden
Gesetzeswerk sind strafrechtliche
als Zusatzstrafe angewendet. Fьr die
Regelungen in 20 Titeln mit 191 Artikeln
Strafzumessung spielte der soziale Rang
verankert. Die Strafarten des chinesischen
des Opfers eine wichtige Rolle. Diebstahl
Strafgesetzes wurden fast vollstдndig
galt nach wie vor als die schwerwiegendste
fьr die Mongolei ьbernommen. Dies
Form der Vermцgensdelikte. Daher
bedeutete eine erhebliche Verschдrfung
38
In der gegenwдrtigen Diskussion regten manche Wis-
senschaftler die Idee an, insbesondere fьr Viehdiebstahl an-
des traditionellen Rechts, welche
stelle der Geldstrafe eine andere Form, nдmlich eine „Vieh- die heutzutage verbreitete Annahme
strafe“, in das Sanktionensystem einzufьgen. Das wдre als
Alternative zur Geldstrafe eine Zahlungserleichterung fьr
39
Jalan-Aajav 1958; allgemein über diese Ordnung s. Ria-
Straftäter mit nomadischem Hintergrund, die zwar keine fi- sanovsky, 1965, S. 57–62.
nanziellen Einnahmen haben, aber Viehbestдnde besitzen. 40
Die damalige Khalkha- und Westmongolen gehцren zur
Siehe Narangerel, 1999, S. 42. heutigen sogenannten „Äußeren“ Mongolei.

108
 Legal Researches, Summary, Results

ьbermдßiger Hдrte als Wesenszug des Stьck Strafvieh verhдngt werden43. Ein
traditionellen mongolischen Rechts zu „Neuner“ umfasst zwei Pferde, zwei
einem guten Teil erklдrt41. Nur die aus ausgewachsene Stiere, zwei Kьhe,
den mongolischen Gesetzen stammende zwei dreijдhrige und einen zweijдhrigen
Viehstrafe blieb fьr die besonderen Stier, also 9 Stьck Großvieh. Fьnf Stьck
Verhдltnisse der Nomaden in Geltung, Strafvieh bzw. ein „Fьnfer“ umfasst einen
insbesondere gegen Viehdiebstдhle. ausgewachsenen Stier, eine Kuh, einen
dreijдhrigen Stier und zwei zweijдhrige
Stiere.
2.5.2 Zum Strafensystem
Bei Delikten gegen das Leben
Besonders auf das strafrechtliche
galt44: Tцtet ein Fьrst einen Menschen
Sanktionensystem hat das chinesische
vorsдtzlich aus Bosheit, mit Überlegung
Strafrecht einen sehr starken Einfluss42.
oder als Teilnehmer an einem Plan, so hat
Dabei sind viele grausame und auch
er den Getцteten mit einem Menschen zu
fьr die traditionellen Lebensarten der
ersetzen (Menschen als Schadensgut).
nomadischen Mongolen unbekannte
Fьrsten ersten und zweiten Grades,
Strafen. Die Todesstrafe wurde
abgestuft nach dem Rang, sind außerdem
durch Zerstьckelung, Enthauptung
mit bis zu 100 Pferden zugunsten der
oder Erdrosselung vollstreckt,
Familie des Getцteten zu bestrafen. Ist
oder war zusдtzlich auch mit der
der Mцrder ein Gemeinfreier, so ist er
Vermögenskonfiskation und Versklavung
nach erfolgter Inhaftierung zu enthaupten
der Familie verbunden. Weitere
und das gesamte Vermцgen des Tдters
Strafen waren Gefдngnisstrafe bis
verfдllt der Familie des Getцteten.
zur Vollstreckung der Todesstrafe;
Helfershelfer sind samt ihren Familien
die Verbannung in Fiebergegenden
und dem gesamten Vermцgen dem Leiter
in sьdlichen Provinzen Chinas oder
des benachbarten Bezirks zuzufьhren
zur Zwangsarbeit nach Sьdchina. Als
und den im Amt befindlichen Taiji (ein
Leibess rafen wurden das Auspeitschen,
Adelstitel) als Sklaven zu geben. Tцtet ein
der Halsblock und die Brandmarkung
Sklave seinen Herrn, so ist er in Stьcke zu
verhдngt. Es gab die Versklavung mit
zerschneiden. Wenn ein im Streit schwer
der Familie, Vermцgensstrafen in Vieh,
Verletzter im Laufe von 50 Tagen stirbt, so
Silberstьcken oder Seide, Gehaltsstrafen
ist der Tдter nach erfolgter Inhaftierung
fьr hohe Beamte (Abzug von einem
zu erdrosseln. Kann ein Verurteilter eine
Monats- bis zu einem Jahresgehalt) und
Strafe aus Armut nicht begleichen, und
Amtsenthebung. Je nach dem Rang des
wird die Tatsache der Armut durch den im
Tдters als Adlige, Beamte, Gemeinfreie
Amt befindlichen Adligen eidlich bekräftigt,
bzw. Nichtadelige, Lamas oder Sklave
so soll der Verurteilte seinem Gegner
wurden unterschiedliche Strafarten mit
zum Sklaven gegeben werden, bis er die
unterschiedlicher Strafhцhe praktiziert.
Strafe abgearbeitet hat. Bei fahrlдssigen
Die Sachstrafe zдhlte zu den Tцtungsdelikten kann der Tдter eine Art
Hauptstrafen und wurde sehr häufig Blutgeld zahlen und so gilt seine Schuld
angewandt. Die Sachstrafe kann außer
in Form von Geldstьcken und sonstiger
Wertsachen auch in 3, 5, 7 oder 9
43
Diese Form der Sachstrafe stammt aus dem 16. Jahrhun-
dert vom Altan-Khan-Kodex in der Mongolei. Im Vergleich
zu diesem mandschurischen Gesetz bestand damals ein
„Neuner“ aus 4 Stück Groß- und 5 Stück Kleinvieh. Siehe
dazu auch Vietze, 2003.
41
Die Geschichte der Mongolischen Volksrepublik, Band 2, 44
Siehe ausfьhrlicher zu der mandschurischen Gesetzge-
1968, S. 190 ff. bung zum Strafrecht Sovd, 1973, S. 37–46; Jantsan, 2007,
42
Sovd, 1973, S. 39. S. 32 ff.; Barkmann, U., 1988; Bayarsaikhan, B., 2004.

109
LAW REVIEW
als verbьßt45.
Aufgrund der weiten Entfernungen
im Lande und den Schwierigkeiten des
Reisens war es nicht immer machbar,
dass der Klдger persцnlich vor Gericht
auftrat. Deswegen war es einem Dritten
gestattet, den Klдger im Prozess zu
vertreten. Fьr seine Leistung bekam
nach allgemeinem Grundsatz des
mongolischen Nomadenrechts der Dritte
eine Vergьtung, und zwar die Hдlfte
der von dem Verurteilten zu leistenden
Sachstrafe.
Zu dieser Zeit war der Zweck der
Sanktionen in erster Linie dem Tдter
Leid bzw. Schaden zuzufьgen und eine
Abschreckung zu erreichen. Von einer
Erziehung oder Besserung des Tдters
war ьberhaupt nicht die Rede.
Abschnitt 3. Strafrechtsen-
twicklung von 1911 bis zu den 1920er
Jahren
3.1 Das Strafensystem der
Autonomen Mongolei (1911–1921)
Die mandschurische
Kolonialherrschaft wurde durch den
Volksaufstand von 1911 beendet. Am 1.
Dez. 1911 verkьndete die Mongolei ihre
Unabhдngigkeit von der mandschurischen
Kolonie. Zwischen 1911 und 1921 hatte
die Mongolei eine Autonomie-Regierung
unter der Herrschaft des buddhistischen
Oberhauptes Bogd Dsabzundamba. Er
war sowohl religiцses und als Khan auch
politisches Oberhaupt der Mongolei,
der in Цrgцц (Niislel-Chьree, 1924 in
Ulaanbaatar umbenannt) residierte, das
damit zur Hauptstadt der Mongolei wurde.
Die oberste Behцrde fьr die Verwaltung
des gesamten klerikalen Apparates der
Mongolei war das Shabi-Ministerium
(Schьler und religiцse Anhдnger von
Bogd Dsabzundamba). Dem Bogd Khan
45
Von der Todesstrafe kann der Tдter befreit werden, wenn
er 9 x 9 = 81 Pferde dem Gericht und 3 x 9 = 27 Pferde fьr
die Familienangehцrigen des Opfers bezahlen kann. Falls
der Opfer keine Familie und nдhere Verwandte hat, gehцren
die dem Opfer zu zahlenden Tiere der jeweiligen Verwal-
tung, so in Jantsan, 2007, S. 33 ff.
110
2017 5(65)
oblag die politische und wirtschaftliche
Leitung und Kontrolle, sowie damit auch
die Gerichtsbarkeit. Die Grundlagen
der rechtlichen Entscheidungen dieses
Ministeriums und der nachgeordneten
Verwaltung waren hauptsдchlich das
verдnderte chinesische Gesetz und
die alte „Khalkha-Djuram“ von 1709.
Der Katalog der Delikte war durch den
Einfluss der buddhistischen Geistlichkeit
gekennzeichnet, wie Grabschдndung,
Verbot von Tierschlachtungen an
bestimmten Orten, sowie das absolute
Schlachtverbot fьr gewisse Tiere.
Das strafrechtliche Sanktionensystem
orientierte sich wie oben erwдhnt stark
an der chinesischen Strafgesetzgebung
und enthielt qualifizierte Todesstrafen,
lange Freiheitsstrafen bis zu 10 Jahren
(eine sehr harte Strafe fьr Nomaden),
Sachstrafen, Pranger, Verbannung und
Verwarnung46. Da fast ein Drittel der
Bevцlkerung Lamas (Kleriker) waren47,
regelten als eine Besonderheit dieser
Phase die meisten Vorschriften und
Erlдsse des Bogd Khaan und seines
Ministeriums ьberwiegend Lama- und
Tempelangelegenheiten48. Nachdem
die Mongolei 1919 von chinesischen
Truppen besetzt wurde, marschierte im
Verlauf des russischen Bьrgerkrieges
1920 der weißgardistische (zaristische)
Kommandeur Baron Roman von Ungern-
Sternberg in die Mongolei ein, der die
chinesischen Truppen vertreiben konnte.
1921 rief er als Alleinherrscher eine
Monarchie aus, wurde jedoch schon nach
wenigen Monaten von der Mongolischen
Revolutionдren Volksarmee vertrieben.
Diese sogenannte „Volksrevolution“
von 1921 ist ein Wendepunkt in der
mongolischen Geschichte. Bei dieser
„Volksrevolution“ wurde unter dem
46
Näheres dazu: Alinge 1935, S. 104; Riasanovsky wies
ganz andere Strafensystem zu dieser Zeit auf, dazu: Riasa-
novsky 1965, S. 66–68, 142 ff. und 207.
47
Im Jahr 1918 betrug die Bevölkerungszahl 542 504 Ein-
wohner, davon 151 000 Lamas, so in: Maisky 2001, S. 26
und 351.
48
Über die Prдzedenzfдlle und das Ausmaß der Strafe zu
dieser Zeit siehe den Beitrag von Vietze, 2003.

Partisanenfьhrer und Grьndungsmitglied
der Mongolischen Revolutionдren
Volkspartei (MRVP) Damdin Sukhbaatar
mit Unterstьtzung der Sowjetunion die
chinesischen und weißgardistischen
Truppen endgьltig aus der Mongolei
vertrieben und in der Folgezeit ein
kommunistisches System nach Vorbild
der Sowjetunion in der Mongolei installiert.
Die Revolution beendete die
Monarchie sowie den Einfluss der
Adelsgesellschaft und des Lamaismus.
Ebenso endete endgьltig die
jahrhundertelange mandschurische
Kolonialherrschaft in der Äußeren
(bzw. der heutigen) Mongolei. Mit der
Verkьndung der Unabhдngigkeit wurde
die Äußere Mongolei 1921 de jure ein
unabhдngiger Staat, geriet jedoch nun
de facto unter einen starken Einfluss
der Sowjetunion, der das Land in allen
Bereichen durchgreifend verдndern
sollte. Dieser Einfluss zeigt sich u. a. auch
im Strafrecht.
3.2 Die Maßnahmen der
provisorischen Volksregierung der
Mongolei
Die Folgen der mehr als 200-jдhrigen
Kolonialherrschaft und des Lamaismus
sowie der damit verbundenen doppelten
Ausbeutung des Volkes durch die fremden
Eroberer sowie durch die mittelalterlich-
feudalen Herrscher des eigenen Landes
waren tragisch, und die jahrhundertelange
Stagnation der Entwicklung hatte zu einer
111
Legal Researches, Summary, Results
vцlligen wirtschaftlichen und geistigen
Rьckstдndigkeit gefьhrt49.
Eine Farbaufnahme von 191350
(Albert Kahn, Les Archives de la
planиte, Fotograf: Stйphane Passet)
zeigt das Gefдngnis von Ulaanbaatar zu
dieser Zeit. Das gezeigte Anschließen
einer massiven und etliche Kilogramm
schweren Eisenkette am Hals entspricht
noch den aus der Mandschu-Zeit
stammenden Methoden mit einer
Vielzahl brutaler Misshandlungen und
Kцrperstrafen, die von der Theokratie des
Bogd Dsabsundamba auch nach 1911
weiterbenutzt wurden.
Ohne die Abschaffung des alten
mandschurischen Strafrechtssystems
war es unmцglich, ein eigenstдndiges
System aufzubauen. In Bezug auf die
Strafrechtspolitik hatte die gerade neu
gegrьndete provisorische Regierung
folgende Maßnahmen ergriffen: Eine
der ersten Sofortmaßnahmen ьberhaupt
war eine Strafrechtsreform, welche die
sofortige Abschaffung der grausamen
Folter sowie von erniedrigenden und
unmenschlichen Strafen festlegte, die von
der mandschurischen Kolonialherrschaft
speziell fьr die Mongolei geschaffen
worden waren und 1911–1921 wдhrend
der Theokratie des Staats- und religiцsen
Oberhaupts Bogd Dsabsundamba
weiterhin verwendet wurden. Als zweite
Maßnahme wurden die Grundsдtze der
Kriminal- und Strafrechtspolitik festgelegt
und diese dem Volk bekannt gemacht.
Schließlich folgten die Abschaffung des
alten Justizsystems und die Schaffung
der Grundvoraussetzungen fьr ein neues
System51.
Die vom Juli bis zum November
1921 amtierende provisorische
49
Dazu z. B. Schirendyb, 1971, S. 7 ff.; Sovd, 1973, S. 50
ff.
50
Quelle: http://www.spiegel.de/fotostrecke/erster-welt-
krieg-austellung-mit-farbfotos-in-berlin-und-london-fotost-
recke-117237-8.html, Abruf am 29.07.2014.
51
Nдheres zu dieser Zeit siehe Adiyabazar, 1998, S. 4 ff.;
Jantsan. S., 2007, S. 43 ff. und dort zitierte Literatur; Den-
dev, A., 1936.
LAW REVIEW
Regierung erließ zeitbedingt einzelne
Maßnahmengesetze zur Stabilisierung
der Verhдltnisse im Land und traf
bestimmte Regelungen zur Bekдmpfung
der Kriminalitдt und des Widerstands
gegen die neu einzufьhrende Ordnung.
Durch den Volksregierungsbeschluss
vom 16. Juli 1921 wurde angeordnet,
dass im Inland befindliche Ausländer,
die Straftaten begangen haben, der
mongolischen Strafgewalt unterliegen
und nach dem mongolischen Strafgesetz
bestraft werden. Neben solchen
Maßnahmengesetzen bestand die
eigentlich reformerische Tдtigkeit der
provisorischen Regierung mit dem
Beschluss vom 3. August 1921 in der
Aufhebung der Todesstrafe in den
meisten Fдllen sowie mit der Abschaffung
von Verbannung und Halsblock. Die
Todesstrafe durfte nur im Fall von
Hochverrat gegen das Land verwendet
werden. Die sonstigen Fдlle, fьr die bis
zu diesem Zeitpunkt die Todesstrafe
angedroht war, mussten stattdessen
mit 10 Jahren Freiheitsstrafe verbьßt
werden. Die langsame Todesstrafe
wurde durch 7 Jahre Freiheitsstrafe, die
Verbannung in Grenzgebiete durch 5
Jahre Freiheitsstrafe, die Verbannung
in entfernte Provinzen durch 3 Jahre
Freiheitsstrafe sowie die Verbannung
in eine benachbarte Provinz durch 1
Jahr Freiheitsstrafe ersetzt, und die
Gefangenen mussten wдhrend der
Verbьßung der Strafe entsprechende
Zwangsarbeit leisten. Aus den Strafen
„Lцsegeld“ und „Abzug von Fьrstensold
bzw. Beamtensold“ wurde eine
einheitliche Geldstrafe gemacht und die
Unterscheidung von Fьrsten und Volk bei
der Bestrafung aufgehoben.
Vom Justizministerium wurde
am 9. Sept. 1921 erlassen, dass die
feudalen Strafen und Foltermethoden
wie das Auspeitschen, der Halsblock,
Brandmarken, die „Neun-Foltermethode“
und das Hungern lassen endgьltig
abgeschafft werden. Dazu gehцrten
112
2017 5(65)
auch die Strafen Muglun (Einsperren
in eine Holztruhe, bei der nur Kopf und
Hдnde durch entsprechende Lцcher
außerhalb bleiben) oder Khongor azarga
(das Fesseln von Hдnden und Fьßen an
eine Holzbank in einer Zwangshaltung
mit vorgebeugtem Oberkцrper)52.
Die Abschaffung der altertьmlichen
Leibstrafen und der Folter war ein
Zeichen des Strebens der Regierung
nach Modernitдt und Humanitдt.
Von der Regierung wurde im Jahr
1923 beschlossen, fьr Jugendliche,
kцrperlich Behinderte und Schwangere
keine Freiheits- und Geldstrafen mehr zu
verhдngen, sondern sie stattdessen unter
die Aufsicht von Eltern bzw. von nдheren
Familienangehцrigen zu stellen und
entsprechende Arbeit leisten zu lassen.
Außerdem wurde fьr die Übergangszeit
bis zum Inkrafttreten des neuen
Strafgesetzbuchs fьr bewaffneten Raub
und Mord aus Habgier die Todesstrafe
wieder eingefьhrt.
Das Ziel der neuen Regierung war
nicht nur die Bestrafung der Straftдter,
sondern sie kannte auch die Begnadigung.
Durch den Beschluss vom 8. Oktober 1921
(§ 8) wurden zum Anlass des Geburtstages
des Bogd Khan die durch das Mandschu-
Gesetz verurteilten Personen amnestiert.
Zum zweiten Grьndungstag der
Mongolischen Volkspartei wurde durch
den Beschluss vom 22. Februar 1922
(§ 5) eine Amnestie erlassen. Danach
wurden Gefдngnisinsassen, die die
Hдlfte der Freiheitsstrafe verbьßt haben,
von der Restfreiheitsstrafe ganz befreit;
diejenigen die noch nicht die Hдlfte der
Freiheitsstrafe verbьßt haben, wurde die
vom Gericht angeordneten Freiheitsstrafe
halbiert. Für noch vor Gericht befindliche
Fдlle mit angedrohter Freiheitsstrafe
durfte nur die Hдlfte der Strafe verhдngt
werden. Die zu Tode verurteilten Straftдter
durften begnadigt und ersatzweise
mit 10 Jahre Freiheitsstrafe bestraft
52
Siehe Adiyabazar, 1998, S. 5.

werden53. Solche Maßnahmen dienten in
erster Linie als Übergangsregelung und
zweitens auch als Instrument, dem Volk
bzw. der Gesellschaft die humane Politik
der revolutionдren Volksregierung zu
demonstrieren54.
In den folgenden Jahren
erließ die Regierung jeweils zum
Unabhängigkeitsjubiläum 1924, 1926
und 1927 Begnadigungsbeschlьsse
fьr Verurteilte. Im Mдrz 1930 wurden
zum 20. Weltfrauentag alle weiblichen
Gefдngnisinsassen entlassen. Fьr die
Straffдlle, die vor diesem Beschluss
von Frauen begangen worden sind,
durfte die Hдlfte der zu verhдngenden
Freiheitsstrafe verkьrzt werden.
Ausgeschlossen aus dieser Amnestie
waren Frauen, die Straftaten gegen den
Staat und Unterschlagung von Staats-
und Gemeinschaftseigentum begangen
haben.
ZUSAMMENFASSUNG/CONCLUSION
Was ist eine gerechte Strafe?
Diese Frage beschдftigt die Menschen
seit jeher. In verschiedenen Epochen
wurden auf diese Frage unterschiedliche
Antworten gegeben, je nach der Kultur,
der vorherrschenden Gesellschafts-
und Wirtschaftsform sowie dem
Entwicklungsstand des jeweiligen
Staates.
Bereits im Spдtmittelalter und
auch in der Neuzeit der Mongolei waren
die Kцrperstrafen und die Todesstrafe
53
Sovd 1973, S. 444 ff.
54
Sodovsuren, 1971, S. 47 ff.
---o0o---
113
Legal Researches, Summary, Results
weitverbreitet. Kцrperstrafen werden
unter anderem als juristische Rechtsfolge
angewendet. Zu den heute allgemein
gesetzlich unzulдssigen Kцrperstrafen
gehцren alle Formen, die unter den Begriff
der Folter fallen. Die Anwendung und
gesetzliche Zulдssigkeit im juristischen
Bereich haben sich im Laufe der Zeit
stark gewandelt und immer eine starke
Abhдngigkeit von den jeweils herrschenden
sozialen Normen gezeigt. Dagegen war
die Freiheitsstrafe in der Mongolei nicht
immer eine gдngige Strafform. Weil die
Mongolen hauptsдchlich bzw. fast nur
nomadische Viehwirtschaft betrieben und
mit Ausnahme von Klosterbewohnern bis
zum Anfang des 20. Jahrhunderts kaum
sesshaft waren, war es fast nicht mцglich,
jemand jahrelang einzusperren.
Um ein kulturell angepasstes und
zukunftorientiertes Konzept fьr das
strafrechtliche Sanktionensystem in der
Mongolei entwickeln zu kцnnen, muss
man all diese Besonderheiten unbedingt
mitberьcksichtigen. Aus diesem
Grund wurde die durch die besondere
Geschichte der Mongolei mitgeprдgte
historische Entwicklung des Strafrechts
in diesem Artikel mit einbezogen. So
wurde sie in ihrem historischen Kontext
bezogen untersucht, welchen Weg
die mongolische Gesetzgebung und
Wissenschaft zum Wesen und Zweck der
Strafe zurьckgelegt haben, wie sich die
damit zusammenhдngenden Fragen im
Laufe der Zeit verдnderten, sowie welchen
Einfluss sie auf den heutigen Stand
der Entwicklung des strafrechtlichen
Sanktionensystems haben.
LAW REVIEW
PROSPECT OF ADOPTING LOCAL CONTENT
REQUIREMENTS TO DEVELOP UPSTREAM LINKAGES
TO THE MONGOLIAN MINING INDUSTRY
Askhar Bakyei, Policy and
Legal Analyst, LL.M
ABSTRACT
The success of a government policy
to support upstream linkages to extractive
industries depends on the broad range of
determinants at macro, meso, and micro
levels and on the effective coordination
and collaboration among all stakeholders.
To the extent that local content requirement
fixes market failures, promotes positive
externality, and delivers efficiency without
causing harmful effect on social optimum,
it can be implemented in relation to large-
scale mining projects where resource rents
are substantial. In the context of Mongolia,
the legal arrangements pertaining to
the “deposits of strategic importance”
under the Minerals Law is a suitable
framework to apply targeting policies,
including local content requirements, to
promote upstream linkages. If such mine
deposit is exploited by a joint venture
where the government is a minority
shareholder, mining agreements (as a
target setting mechanism) and corporate
level policies (as an implementation
tool) can be instrumental. On the other
hand, ensuring transparency and good
corporate governance in fully- or majority
114
2017 5(65)
state-owned entities may be a priority,
but the principle of preferential treatment
to domestic suppliers should be applied
as long as they are competitive in price,
quality and delivery. A mining sector-
specific public procurement regulation
may be more effective in this regard.
However, local content requirements and
corresponding sector-specific measures
will only reap benefit if the government
effectively performs its own function of
improving the absorptive capacity of the
economy at the same time.
1 INTRODUCTION
Local content requirements (LCRs)
can be a tool to support the creation
of linkages at national and subnational
level by seeking links between core
sector investments and operations, on
the one hand, and local employment and
local economic activities, on the other.1
However, governments which attempt
to introduce LCRs face more legal and
economic obstacles today than they did
in the past. Legally, current international
trade and investment law, particularly
WTO agreements, limit the application
of LCRs and corresponding measures
(e.g. incentives or subsidies), especially
when LCRs are enacted as laws or
regulations or clauses in contracts. These
constraints may be a more challenging
problem to a developing country if it
has signed multiple bilateral investment
treaties (BITs) which tend to bring
1
Peter D. Cameron & Michael C. Stanley, Oil, Gas, and Min-
ing: Sourcebook for Understanding the Extractice Industries
65 (2017).

more restrictive provisions on LCRs.2
Economically existing infrastructure, skills
of workforce, technological sophistication
of domestic industries, and access to
finance in large number of resource rich
countries remain to be inadequate to
support such requirements. Moreover,
there may be institutional shortcomings
with government’s capacity to formulate,
implement and regulate LCRs and
corresponding policy measures. 3
In Mongolia, there is neither
a robust strategy nor an integrated
policy to promote upstream linkages
and LCRs are limited to preferential
treatment of domestic bidders (if they
are competitive) and local employment.
To date, no country-specific study has
been done to investigate challenges to
(and opportunities for) the adoption of a
comprehensive local content policy in
Mongolia. Thus, the main objective of this
study is to identify policy solutions based
on the analysis of the current policy and
legal framework for local content.
The success of a government
policy to support linkages to extractive
industries depends on the broad range of
determinants at macro, meso, and micro
levels and on the effective coordination and
collaboration among all stakeholders.4 To
the extent that LCR fixes market failures,
promotes positive externality, and delivers
efficiency without causing harmful effect
on social optimum, it can be implemented
as a selective policy for large-scale
mining projects where resource rents are
substantial. In the context of Mongolia,
the legal arrangements pertaining to the
“deposits of strategic importance” under
2
Isabella Ramdoo, Unpacking Local Content Requirements
in the Extractive Sector: What Implications for the Global
Trade and Investment Frameworks 13 (2015), http://e15ini-
tiative.org/publications/unpacking-local-content-require-
ments-in-the-extractive-sector-what-implications-for-the-
global-trade-and-investment-frameworks/
3
GIZ, Linkages to Resource Sector: The Role of Compa-
nies, Governments, and International Development Coop-
eration 64 (2016).
4
Evelyn Dietsche, Diversifying Mineral Economies: Concep-
tualizing the Debate on Building Linkages, 27 Min. Econ.
89 (2014).
115
Legal Researches, Summary, Results
the Minerals Law is a suitable framework
to host selective policies to promote mining
supply industries. If such mine deposit
is exploited by a joint venture company
where the government is a minority
shareholder, mining agreements (as a
target setting mechanism) and corporate
level policies (as an implementation tool)
are instrumental.
The study consists of four chapters
in addition the introduction. Chapter
2 provides the meaning of upstream
linkages and local content policies in
extractive industries. Chapter 3 explains
the methodological background of
this paper that is the “linkage theory”
pioneered by Farooki and Kaplinsky
and its correlation with LCRs. Chapter
4 evaluate the current policy and legal
framework of Mongolia according to the
methodological construction in Chapter 3.
Chapter 5 concludes the study and how
LCRs can be integrated into the overall
legal framework governing the mining
industry.
2 UPSTREAM LINKAGES AND
LOCAL CONTENT POLICIES IN EX-
TRACTIVE INDUSTRIE
2.1 Description of “linkages” and
“local content”
To understand how to effectively
use local content measures to promote
upstream linkages, it is important to
delineate what upstream linkages
and local content mean. Upstream
linkages refer to the production and
provision of goods and services that
extractive industries require to operate.5
These typically include a variety of
services ranging from core services
(for example, IS&T, drilling, civil works,
transport and logistics) to non-core
services (local training, legal consulting,
insurance and so on), whereas goods may
include capital equipment, consumables
and non-core goods such as food and
5
See GIZ, supra note 3, at 13.
LAW REVIEW
beverage, sample bags and uniforms.
Although there is no universal
agreement on what “local content”
means, it is generally understood
as jobs or value created in national
economy as a result of investment.6
Following this logic, “local content
requirements” can be broadly defined
as government interventions that aim
to increase the share of employment
or of sales that are locally supplied to a
sector at each stage of the value chain7
. It is important to distinguish between local
content requirements (LCRs) imposed
on investors (and their suppliers) and a
broad range of cross-sectoral and sector-
specific policy measures found in laws,
regulations and government programmes.
The literature suggests at least three
types of LCRs. First, there are quantitative
requirements on companies that are
expressed in volume (e.g. domestic-only
tender list) or value (e.g. 10% nominal
price advantage to local suppliers).8
These quantitative LCRs are often
combined with qualitative requirements
such as technology transfer, preferential
treatment, capability development,
training and information sharing, and
obligation to report compliance with LCRs.
Apart from the LCRs implemented through
investor’s procurement activity, there may
be requirements in relation to joint venture
(e.g. mandated partnership with domestic
company to acquire licence), local
management (e.g. proportion of nationals
in senior management), local equity (e.g.
minimum share of domestic ownership)
and location (e.g. office in the host state).9
This study does not address the
requirements in the last type except for
location requirement because their aim
6
Sylvana Tordo et al., Local Content Policies in the Oil and
Gas Sector 13 (2013).
7
See id. at 18.
8
See Ramdoo, supra note 2, at 4
9
See generally Lise Johnson, Space for Local Content Pol-
icies and Strategies: A crucial time to revisit an old debate
(2016), http://ccsi.columbia.edu/files/2016/10/giz2016-en-
local-content-policies-study.pdf.
116
2017 5(65)
of “indigenisation” go beyond the local
content definition that is based on the
value contributed to national economy.
2.2 Market failures as justification
for government intervention
The possibility of creating linkages
to extractive industries has gained
momentum in recent years, mostly in
relation to the oil and mining sectors of the
resource-rich developing countries. While
many of these countries saw strong growth
in their economy by largely following the
Washington Consensus liberalisation
policies, the increases in their national
GDP have been highly volatile in most
cases and, above all, there have been
growing concerns not only with the little
impact of extractive industry on domestic
job creation and skills development, but
also its environmental footprint. As such,
there has been an increasing recognition
that extractive industries should generate
benefits to the economy beyond the direct
contribution of tax revenues, through their
links to other sectors.10
Many scholars now draw on
the prospect of a more active role of
governments in facilitating industrialisation
on the back of resource projects, thus
paving the way for a diversified economy.
The common theme of the “building
linkage” debate is the re-justification
of government’s traditional function to
manage market failures and externalities
that have often been overshadowed
by the liberalisation policies aiming
foreign direct investment. For example,
Kaplinksy and Farooki hold that cross-
sectoral and sectoral policies should
be implemented to correct a series of
market failures that are endemic in
industrial development, particularly with
regards to capabilities development,
infrastructure and innovation.11
Also, Tordo et al. postulate that LCRs can
10
See Cameron & Stanley, supra note 1, at 21.
11
Rapheal Kaplinsky & Masuma Farooki, Promoting Indus-
trial Diversification in Resource Intensive Economies: The
Experiences of Sub-Saharan Africa and Central Asia Re-
gions 61 (2012).

be implemented as a policy intervention
to tackle market inefficiencies, promote
competition in domestic markets, foster
technology and spill-overs of resource
projects, and to help develop industry
clusters. Particular failures checking the
development of upstream linkages include
lack of information about procurement
opportunities, information asymmetry
between extractive mining companies
and non-mining sectors, and lack of
business support services. Also, gaps
in technology, skills and infrastructure
present challenge to domestic non-
mining sectors to benefit from the positive
externality or spill-overs of capital intensive
investments by multinational companies.
More broadly, there can be governance
failures characterized by lack of
coordination not only among government
departments, but also between
mining companies and authorities.12
2.3 Three Levels of Policy and
Local Content Requirements
The contemporary industrial policy
proponents, for example Farooki and
Kaplinksy, classify their policy prescriptions
at macro, meso and micro levels.13
The macro-policy agenda includes a
combination of macro-economic policies to
deal with macro-economic management,
property rights, domestic skills and
capability gap, development of hard and
soft infrastructure and so on. The micro-
level policies address policies designed
to assist upgrade in domestic firms and,
again, are largely generic across all
sectors. The core of micro policies is
represented by government policies to
support small and medium enterprises
such as grating of concessional loans,
creation of business incubators, and
provision of tax incentives. However,
one component of micro policies that
relate to the procurement strategy of lead
12
See GIZ, supra note 3, at 84.
13
See generally Kaplinsky, R. and Farooki, M., supra note
11.
117
Legal Researches, Summary, Results
extractives companies are not cross-
sectoral since they specifically target
extractive industries.
While macro and the core of
micro policies are those which apply to
all the sectors of an economy, meso-
level policies are sector specific and
selective. Meso level policies entail
(i) identification of feasible upstream
linkages that feed extractive industries,
(ii) strategic collaboration with global
extractive companies whose procurement
strategy is conducive to domestic linkage
development, (iii) technological, skills and
infrastructure gap faced by current or
potential mining suppliers. Almost LCRs
can be placed at the overlapping area
between meso and micro policies as
shown in Figure 1. LCRs, as micro level
policies, target procurement or, more
broadly, supply chain of extractive industry
companies. These requirements are often
implemented hand in hand with meso
policies such as royalty break for a mining
company (as incentive), monitoring of
local content targets (as regulation), and
financial grant by state to a mining school
of excellence (as subsidy).
LCRs, can be counterproductive to
long-term industrial competitiveness as
most of them fall into the category of market
intervention. Thus, governments should
limit LCRs and associated incentives
(or subsides) with sunset clauses.14
More importantly, to what extent
LCRs contribute to the development of
competitive domestic industries is subject
to the efficiency of government policies in
macro and micro policy realms.
14
Richard Dobbs et al., Reverse the curse: Maximizing the
Potential of Resource-Driven Economies (2013), https://
www.mckinsey.com/industries/metals-and-mining/our-in-
sights/reverse-the-curse-maximizing-the-potential-of-re-
source-driven-economies.
LAW REVIEW
Figure 1. Placing LCRs in the
three level of policy framework
3 ANALYSIS OF MONGOLIAN
POLICY AND LEGAL FRAMEWORK
FOR UPSTREAM LINKAGES
3.1 Review of macro level policy
issues: property rights, infrastructure,
skills and national system of innovation
(NSI)
Property rights
It is believed that within a robust
institutional framework of private property
rights, businesses seek out and seize
untapped opportunities for mutually
beneficial exchange and coordinate their
expectations and plans. The weaker the
property rights system (i.e. property rights
are not elaborately defined and protected),
the more uncertainty is introduced to
the market. This creates coordination
failures where transactions are costlier
as businesses are less certain about the
expectation of government and others.
The current legal barriers to property
rights that affect the Mongolian mining
industry can be summarised as below:
The scope of property rights allowed
for foreigners and non-residents is limited
under Mongolian laws. Although the
Constitution Mongolia (1992) states that
“the State shall recognize any forms of
public and private properties”, real estate
ownership is not allowed for foreigners as
the land ownership and possession rights
are restricted to Mongolian citizens only.
As such, foreign investor can only own
structures and obtain land use rights.
This might be an obstacle to the first-tier
118
2017 5(65)
international suppliers of mining MNCs to
localise their activities in Mongolia. As long
as real property right is not adequately
defined and protected by domestic laws,
these companies will see little assurance
for their investment. Moreover, this gap in
property rights renders the borrowing from
international loan and capital markets
expensive or limited, since achieving the
common security packages needed by
international lenders is problematic under
the current laws.
Currently, Rio Tinto is the only MNC
that have a mining operation in Mongolia
and it runs the world-class Oyu Tolgoi
copper-gold mine, in which the government
holds a 34% stake. Due to mandated state
participation in the current and potential
deposits of significant economic value,
any large-scale investments in Mongolia
are likely to be subject to negotiated
mining agreements.15 Although the term
“deposits of strategic importance” seems
to allow state patrimony and control
over its natural resources on behalf of
people, it creates high public scrutiny
and political pressure motivated by rent-
seeking. Thus, it is not rare that private
companies in Mongolian mining industry
face a direct and creeping expropriation
risk. For example, the protracted dispute
between Rio Tinto and the government
of Mongolia’s over the expansion of Oyu
Tolgoi mine was perceived as a creeping
expropriation case internationally. In
another case, the government terminated
the licence of a Canadian company Khan
Resources Inc., which were carrying out
exploration in the Gurvanbulag strategic
uranium deposit.
The Mongolian property rights
system is imperfect for businesses owned
by foreigners and even for domestic
entities.16 Thus, Mongolia needs to have a
15
Intergovernmental Forum (IGF), Mining Policy Framework
Assessment: Mongolia 22 (2017), http://www.iisd.org/sites/
default/files/publications/mongolia-mining-policy-frame-
work-assessment-en.pdf.
16
T.K. Ahn et al., Securing property rights: A dilemma ex-
periment in Austria, Mexico, Mongolia, South Korea and the
United States, 143 Journal of Public Economics 115 (2016).

clear legal framework with less restriction to
property rights to increase the confidence
of businesses. From the perspective of
upstream linkage, robust property rights
will create more coordination among the
private sector participants located in the
supply side (international and domestic
suppliers) and the demand side (mining
companies) of the mining supply chain.
Infrastructure
Mongolian infrastructure systems
for transportation, power, water and
communication remain underdeveloped.
There are two intrinsic challenges to
the development of infrastructure. First,
the low density of population in a large
landscape not only makes infrastructure
costlier, but also poses a maintenance
issue if infrastructure has been developed
between regions. Secondly, the Mongolian
geographic location, sandwiched between
China and Russia, with no access to
the sea, causes extra border crossings
and burdensome transit procedures.
Although Mongolia has achieved a
modest improvement its internal road
network over the course of last decade
with the proceeds from its sovereign
bond and international assistance, the
capacity of cross-border infrastructures
such as railway, paved road and port
facilities have not caught up the demand.
The infrastructure bottleneck still affects
the mining industry and other export and
import oriented sectors.
While attention has long focused on
creating appropriate legal and regulatory
frameworks to govern the extraction of
mineral resources and on concluding
investment agreements with mining
companies, little focus has been paid on
how best to finance, build, operate and
maintain mine infrastructures. The gap
was partly addressed by the adoption of
Law on Concession, which identified a
public-private partnership (PPP) model
as a primary arrangement for large
infrastructure projects. Nevertheless,
the two underlying issues that inhibit
119
Legal Researches, Summary, Results
the development of upstream linkages
remain unresolved. Firstly, with exception
of few large mines, the existing paved
roads and power infrastructures used by
mines remain to be enclave as market
intervention have been rarely applied
during the design (feasibility study)
stage. Secondly, there is currently no
law governing the third-party access to
transportation systems, and the access
regimes for roads built under PPP model
are still not subject to uniform regulation.
National system of innovation (NSI)
In 2007, the government of Mongolia
approved its Science and Technology
Master Plan (STMP) for 2007-2020, with
an ambitious aim of transforming the
country to “knowledge-based” economy.
The policy stresses that despite the
high literacy rate, established national
institutions of R&D, modest vocational
education and training system, and
appropriate legal framework in place,
there has been lack of contribution
by the science and technology sector
to national economic growth and that
innovation activities have been obsolete
compared to regional and global levels.
This policy was Mongolia’s first attempt
to develop its NSI after the country’s
uneasy transition to market economy. A
series of government programs followed,
and the Law on Innovation was passed in
2012. However, the progress has been
insufficient as evidenced by a recent study
by Dashdondov et al. who concluded
that the NSI is still incomplete.17 The
innovation culture has not prospered, and
national universities and R&D institutes
remain inadequate to generate innovative
knowledge and technology for the key
sectors of the economy.
Skills
The Master Plan to Develop
Education of Mongolia for 2006-2015
17
Batkhuyag Dashdondov et al., A Study on Mongolia’s
National Innovation System: ICT as a Pilot Sector for the
Innovation System Development, 4 World Tech. Rev. 157
(2015).
LAW REVIEW
(MPDE) was approved in 2006. The
policy document envisaged reforms to
improve the country’s human capital and
to match higher and vocational education
systems to the national economic
structure and the labour market demand.
At high level, two shortcomings have been
observed with MPDE objectives and its
implementation. Firstly, it did not give due
consideration to the skills needed by the
mining industry while taking into account
those of manufacturing, agriculture and
service industries. As such, no meaningful
changes have been made to improve
the existing tertiary qualifications based
on an outdated Russian curriculum. The
skills mismatch has widened between the
labour supply and demand in the mining
and relevant industries. The shortage
of technical skills was mostly felt in in
the modern techniques and methods of
mine management, process engineering,
mechanical engineering, geology,
hydrology and geophysics. Secondly,
MPDE did not address the institutional
duplication created by the earlier Law on
Employment Promotion (2001) and the
Law on Education (2002) in technical and
vocational education and training (TVET)
area. Overall, the education system of
Mongolia may have been successful
in ensuring equitable and affordable
education at all levels, but its higher
education and TVET components fell
short of providing appropriate technical,
behavioural and managerial skills needed
by domestic and foreign companies.18
3.2 Review of meso level policy
issues
3.2.1 General direction in the
Mongolian industrialisation policy:
upstream or downstream linkages
The government of Mongolia passed
the “Industrialise Mongolia Programme”
18
International Labour Organisation (ILO), Compilation of
Assessment Studies on Technical Vocational Education
and Training (2016), http://www.ilo.org/asia/publications/
WCMS_458131/lang--en/index.htm.
120
2017 5(65)
(IMP) in 2009. The policy goal was to
develop a competitive and technologically-
sophisticated downstream industry based
on the abundance of domestic raw
materials and resources, thus promoting
economic diversification and national
competitiveness. Since the policy was
approved two years after the STMP,
there was coherence between policies
as both were envisioning a technological
and industrial cluster that facilitates the
production of high-value added products
for export. Accordingly, the Law on
Industrial and Technological Park was
passed in December 2009 to establish
a legal framework for the park and to
govern its management, operation, and
monitoring aspects. Apart from the Law on
Industrial and Technological Park, the IMP
envisioned the adoption of nine new laws
and amendment to eights laws. The major
laws passed under this strategic direction
include Law on Innovation (2012), Law on
Concession (2013) and Law on Promoting
Industrialisation (2015).
The State Minerals Policy adopted in
2014 embraced the same strategic vision
as IMP, by identifying the development of
value-added downstream industry as the
primary objective. The policy provides for
a broad range of supportive legal actions,
including the use of fiscal and financial
incentives. The policy direction has been
further elaborated in the Government
Action Plan 2016-2020 which stipulates
the creation of a conducive commercial
environment for copper smelters,
underground coal gasification plants, and
a steel industry cluster. The only upstream
linkage option considered in the action
plan was the policy support to metal
fabrication and installation services.19
As summarised above, the
government has made a series of
legislative and regulatory reforms to
promote industrialisation. However, the
results on the ground have not been
19
Government of Mongolia, Action Plan 2016-2020 (2016),
available at http://legalinfo.mn/law/details/12120.

satisfactory compared to the policy vision.
The fundamental reason for the failure
of these policies and relevant laws was
their overconcentration on downstream
industries (downstream linkages), for
which Mongolia historically has had no
comparative advantage. As long as there
is limited domestic market for processed
mineral products and no export route
other than China which applies higher
tariff to imported semi-processed and
processed products, downstream
linkages to the Mongolian mining industry
will continue to be less viable. Moreover,
the environmental impacts of downstream
industries will be damaging for Mongolian
arid and semi-arid ecosystems if
environmental regulation is weakly
enforced. It is because there are currently
extensive legal and capacity gaps in
Mongolia in terms of environmental
management.20
3.2.2 Local content requirements
that apply to the Mongolian mining
industry
The LCRs in the Minerals Law
(2006) and relevant regulations can
be categorised as those related to (i)
local employment and to (ii) domestic
procurement. The requirements are
differentiated between national and
sub-national levels and applicable to
both private and state-owned mining
companies. Article 43.1 of the Minerals
Law states that “license holder and
its contractors are obliged to provide
employment for citizens of Mongolia and
up to 10% of the total employees may
be foreign citizens”. If the 10% limit is
exceeded, the mining company and/or its
contractors have to pay to the Employment
Promotion Fund an amount equal to 10
times the minimum monthly wage for
each exceeding person per month. For
the procurement of goods and services or
hiring of subcontractors, Article 35.9 of the
Minerals Law (2006) requires a license
20
See IGF, supra note 15, at 7.
121
Legal Researches, Summary, Results
holder to give preference to business
entities registered in and paying taxes in
Mongolia provided that their products and
services meet standards.
Article 42 of the Minerals Law
(2006) instructs a license holder to
conclude a cooperation agreement
“with local administrative bodies on
issues of environmental protection,
infrastructure development in relation
to mine development, mine use and
employment”. To standardise agreements
between mining companies and local
governments, the government adopted
the Model Cooperation Agreement (MCA)
by Resolution 179 in March 2016. In
addition to provisions about environmental
protection, the MCA requires that a license
holder “give preferential treatment to
entities and individuals registered in and
paying tax to the province” and “recruit …
percentage of the total employees from
the province (or district) after providing
necessary training”.
Besides the Minerals Law (2006), the
Public Procurement Law (2005) (PPL) and
the Law on Sending Workforce Abroad and
Receiving Workforce from Abroad (2001)
have some local content provisions.
The measures articulated in these laws
are consistent with the international law
obligations of Mongolia. Since Mongolia
is not party to the multilateral Agreement
on Government Procurement (GPA), the
preferential treatment of domestic goods
and services in the PPL are not in breach
of the WTO rules.21 Similarly, the Law on
Sending Workforce Abroad and Receiving
Workforce from Abroad (2001), which sets
an annual quota mechanism to limit the
maximum number of expatriate workers
in Mongolia, is not contrary the WTO
framework. It is because the law has a
broad objective of protecting domestic
labour market and does not contain any
performance requirements prohibited
21
World Trade Organization (WTO), Trade Policy Review of
Mongolia 36 (2014), https://www.wto.org/english/tratop_e/
tpr_e/tp397_e.htm.
LAW REVIEW
under the WTO agreements.22
To what extent public entities,
including mining SOEs, apply preferential
treatment to domestic good and service
suppliers is unknown due to the highly
decentralised public procurement
practices and inadequate database. In
fact, the preferential treatment provisions
in the PPL are stipulated as desirable
choices for government entities and are
not attached to any sanctions or incentives.
Perhaps, embedding strict LCRs in the
law may not be desirable at this stage
because the government first needs to
ensure transparency, accountability and
independent review mechanism in the
public procurement system.23
3.2.3 Government strategy on lead
mining companies
The domestic ownership of lead
commodity firms may provide an edge
to resource-rich countries to develop
upstream linkages.24 Mongolia has a
policy that requires a partial ownership
in large mineral deposits. Article % of
the Minerals Law of Mongolia provides
that the state may own “shares up to
34% of the investment made in a deposit
of strategic importance by a business
entity” or up to 50% if proven reserve of
such deposit is “determined through State
funded exploration and are exploited
in partnership with a private business
entity”. The details of state participation
and the investment terms and conditions
for private entity are subject to mine
development contract which is regulated
by the Minerals Law, the Investment
Law (2013) and Government Resolution
52 (2014). The government still holds
full-ownership in some large mines that
were developed in the period of centrally-
22
See Johnson, supra note 9, at 18.
23
European Bank for Reconstruction and Development
(EBRD), Commercial Laws of Mongolia 19 (2013), http://
www.ebrd.com/documents/legal-reform/mongolia-coun-
try-law-assessment.pdf.
24
See generally Mike Morris et al., One Thing Leads to An-
other - Commodities, linkages and industrial development,
37 Resources Pol’y 408 (2012).
122
2017 5(65)
planned economy, such as Erdenet
Mining Corporation (copper-molybdenum)
and Tavan Tolgoi JSC (coking coal); both
companies operate at the deposits of
strategic importance. Apart from these
two entities, Erdenes Mongol and Oyu
Tolgoi are two key mining companies that
reflect the government policies regarding
strategic mine deposits since 2006.
Erdenes Mongol
The state shares of major mine
companies which exploit the deposits
of strategic importance are bundled
under Erdenes Mongol, the state mining
corporation established in 2007 to manage
state-owned mining assets and to make
government investments in the sector
more effective and strategic. However,
since its establishment in 2007, Erdenes
Mongol has not been able to realise its
potential in generating revenues for further
investments due to various constraints.
It became a semi-public agency by the
Human Development Law passed in
2009. The law resulted in a situation where
Erdenes Mongol do not have the authority
to retain dividends from the mining
companies in which it has ownership
interest. Instead, the HDF, a public entity
with function to finance the government’s
cash scheme, was the recipient of
dividends. The political interference also
caused a limited managerial capacity and
the corporations’ compensation structure
could not attract competent professionals
to manage or participate in large and
complex mining projects.25 The amount
of net loss recorded by Erdenes Mongol
increased in the last five consecutive
years.
As is the case with Mongolian macro-
economic policies, the HDF distorted the
initial policy objective of the state-mining
corporation by impairing its organisational
and financial capacity. Nevertheless,
positive changes have been made
25
Charles Krusekopf, State ownership and the Develop-
ment of Natural Resources in Mongolia, Honolulu, Univer-
sity of Hawaiʻi at Mānoa, Conference presentation (2015).

recently. The parliament of Mongolia
annulled the Human Development Law,
hence the HDF, in 2016. This paved the
way for Erdenes Mongol to become a
commercial entity subject to the Company
Law and its strategic focus was re-
identified as profit generation. Currently,
neither the State Minerals Policy (2014),
nor the Government Action Plan 2016-
2020 (2016) provides for a holistic
strategy for Erdenes Mongol and other
mining SOEs.
Oyu Tolgoi
The Oyu Tolgoi copper-gold mine is
the largest mining operation in Mongolia
and is jointly owned by Rio Tinto (66%)
and the government of Mongolia (34%). If
the expansion of mine (i.e. underground
mine development) is completed in 2020,
it is expected to produce more than
500,000 tonnes of copper annually, thus
becoming one of the largest copper mine
in the world (Rio Tinto, 2016). The value
derived from Oyu Tolgoi alone is expected
to account for one-third of Mongolia’s
GDP by 2020.
In the wake of the global financial
crisis, the government of Mongolia,
Ivanhoe Mines (now majority-owned by
Rio Tinto) and Rio Tinto signed the Oyu
Tolgoi Investment Agreement (OTIA) in
2009. Following this, the Shareholders
Agreement was signed between Erdenes
Mongol and Rio Tinto subsidiaries in 2010.
It was subsequently amended in 2011, thus
renamed as the Amended and Restated
Shareholders’ Agreement (ARSHA).
The construction work intensified after
the signing these agreements. By the
end of Phase 1 of the project Rio Tinto’s
investment reached over USD 6 billion in
2013.
Without giving rise to breach claim
under its WTO and BIT obligations, the
government of Mongolia agreed three sets
of local content targets with the investor to
maximise the direct and spill-over effects
of the project on the Mongolian economy.
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Legal Researches, Summary, Results
• In relation local employment and
training, Clause 8.4 of the OTIA imposed
9:1 national and expatriate ratio for the
total number of investor’s employees.26
For subcontracting, the investor is
required to use its best efforts to ensure
3:2 and 3:1 ratios for construction and
mining-related activities respectively.
The investor committed to ensure 70% of
the project engineers will be Mongolian
citizens within ten years and is required
to submit to the government a detailed
5-year training strategy and plan for the
project.27
• At sub-national level, OTIA also
seeks the investor’s support for socio-
economic development in the Umnugovi
province and requires that a cooperation
agreement be signed between the
province government and the investor.28
• A domestic procurement obligation
was imposed on the investor by Clause
5.12 of ARSHA (2011) which provides
that “company shall purchase and utilise
services supplied by Mongolian citizens
and/or legal entities, and equipment,
raw materials, materials and spare parts
manufactured in Mongolia, with preference
to businesses operating in the Umnugovi
Province, to the extent such services and
materials are available on a competitive
time, cost, quantity and quality basis”.29
When the local content provisions
contained in the OTIA and ARSHA are
examined carefully, it is obvious that
they reiterate and provide details for the
generic requirements in the Minerals Law
(2013) and several laws governing labour
relations. As will be discussed in micro
policy review, the local content provisions
of the OTIA and ARSHA were further
delineated and successfully implemented
by the corporate policies of Oyu Tolgoi.
The government participation through
26
Oyu Tolgoi Investment Agreement (2009), http://www.tur-
quoisehill.com/i/pdf/Oyu_Tolgoi_IA_ENG.PDF.
27
See id. at cls. 8.11-8.12.
28
Id. at ch. 4.
29
Oyu Tolgoi Amended and Restated Shareholders’ Agree-
ment (2011), http://www.turquoisehill.com/i/pdf/OT-ARSHA-
ENG-2011-06-08-Executed.pdf.
LAW REVIEW
Erdenes Mongol, a minority shareholder,
was instrumental in adopting these
policies.
3.3 Review of micro level policies
& the procurement strategy of a lead
mining company
Government SME policies
The micro-level policies for upstream
linkages entail broader policy measures
to promote competitiveness in potential
supplier companies and adjustment in
the supply chain strategy of lead mining
companies.30 SMEs hold very important
place at this policy level because the more
competitive they are, the more benefits will
be gained from the localisation of supply
chain by mining MNCs (GIZ, 2016).
In 2005, the government of Mongolia
approved SME Support Programme
and amended it twice in 2009 and 2014.
The main objective was to promote the
competitiveness of SMEs, thus increasing
domestic employment and economic
growth. The government determined tax
incentives and concessional loans as key
policy tools to achieve the programme
objective and implemented the following
legislative and regulatory actions:
• The Law on SME was passed on
2007. SME is defined as “a national or an
entity with up to 199 employees and with
annual sales turn-over up to ¥ 1.5 billion
(USD 615 thousand).31
• The SME Development Fund was
established in 2009 to provide long-term
concessional loans to SMEs, facilitate
information sharing among SME’s and to
advertise successful SMEs which gained
support from the government.
• First government-funded business
incubators were established in 2009.
• Equipment to be imported by SMEs
has been exempted from VAT and import
duty in every two years by government
resolutions since 2009.
30
See Kaplinsky and Farooki, supra note 11, at 61-67.
31
Law on Small and Medium Enterprises, art. 5 (2007)
(Mong.).
124
2017 5(65)
• The corporate income tax was set
at 10% for taxable income of up to ¥ 3
billion (USD 1.2 million).32
• The Law on Credit Guarantee Fund
was passed in 2012 and, subsequently,
Credit Guarantee Fund was established
to support commercial bank’s lending to
SMEs by providing credit guarantees.
It is possible to note three
shortcomings of the overall SME policy
from the linkage theory perspective.
Firstly, many of fiscal incentives and
supports that the government has
implemented since 2009 was damaged by
failures in the macro policy area. Due to
the high inflation rates during the years of
“resource boom” and sudden depreciation
of the national currency during “bust”
periods, the definition of a SME based
on the stable amount in the Law on SME
became unrealistic.33 It was not rare that
an enterprise that had been eligible for
the government SME support became
ineligible after few years when no realistic
improvement took place in the entity.
According to a survey by the Central Bank
of Mongolia, the decline in the domestic
purchasing power since 2012 has forced
SMEs to prioritise cost-saving measures
over necessary technological upgrade and
over the introduction of new products and
services (2014, p. 24).34 The same survey
illustrates that SMEs identify the lack of
domestic skills as the second biggest
operational challenge after the macro-
economic environment. The experience
with the HDF, which was another macro-
economic mismanagement, precluded
the SME Development Fund from
accumulating enough fund to be an
alternative to commercial banks.
Secondly, the government has not
32
Law on Corporate Income Tax, art. 17.1 (2007) (Mong.).
33
International Finance Corporation (IFC), SMEs and
Women-owned SMEs in Mongolia 12 (2014), http://www.
ifc.org/wps/wcm/connect/region__ext_content/ifc_exter-
nal_corporate_site/east+asia+and+the+pacific/resources/
smes+and+women-owned+smes+in+mongolia.
34
Central Bank of Mongolia, Sample Study on SMEs (2017)
(Mong.).

ensured policy coherence among different
policies and laws related to SMEs. While
it was possible to add a credit guarantee
function into the duties of the SME
Development Fund, the government
established a separate organisation,
the Credit Guarantee Fund, in 2012.
This may have added to the existing
competition among government funds
for limited financial resources. Although
the Law on SME (2007) envisaged
business incubators to provide non-
financial advisory services and training for
SMEs, the amended Law on Employment
Promotion (2011) brought a more detailed
regulation. This created a situation
where business incubators funded by
the Employment Promotion Fund are
brought under the oversight of the ministry
responsible for labour affairs on one
hand, and other SME support functions
are managed by the ministry responsible
for agriculture and light industry on the
other hand. According to a survey by
IFC, neither business incubators, nor
SME Development Fund are viewed
effective by SMEs.35 Due to weak working
relation with R&D institutes, TVETs and
universities, and to limited funding and
lack of capacity, business incubators
have not developed as institutions to
support SMEs in upgrading their skills,
technology and business models. Thirdly,
most SME support policies excluded the
mining related businesses. For example,
the Credit Guarantee Fund provides
collateral to SMEs that operate in non-
mining sectors and justifies it by pointing
out the Mongolia’s overdependence on
the mining sector.36 Similarly, the VAT and
import duty exemptions applied by the
government do not categorically include
all SMEs that perform fabrication and
manufacturing activities.
35
See IFC, supra note 33, at 15.
36
Asian Development Bank (ADB), Proposed Loan and
Technical Assistance Grant to Mongolia: Supporting the
Credit Guarantee System for Economic Diversification and
Employment Project 1 (2015.
125
Legal Researches, Summary, Results
Lead mining company strategy: the
case of Oyu Tolgoi
As discussed in the meso level policy
review, two of the mining SOEs (Erdenes
Mongol and Erdenet Mining Corporation)
and Oyu Tolgoi represent the largest
share of the Mongolian mining industry
in terms of taxes paid, sales turn-over
and employment created. Due to lack of
transparency in mining SOEs, it is difficult
to ascertain their supply chain strategies,
but there is abundant information on Oyu
Tolgoi.37 The reason is simple: being an
investment by a MNC listed in international
markets provides both international and
domestic stakeholders with reasonable
insights into the business practice of Oyu
Tolgoi LLC.
Based on the local content targets
enshrined in the OTIA and ARSHA, the
company implemented a successful local
content optimisation under the supervision
of its Board of Directors and is thought
have achieved sizeable local supply base
in a relatively short period, with more
than half of procurement spend going to
domestic businesses every year (Tsend,
2016). Although LCRs in the OTIA and
ARSHA not expressly tied to any incentive,
the fiscal incentive package that consists
of investment tax credit and management
fee may have been influential for the
investor in internalising its spend on local
content.
In 2012, to build a reliable, sustainable
and low-cost supply chain, the company
established National Procurement
Committee consisting of executives from
key corporate divisions and professionals
from Erdenes Mongol, which represents
the government ownership interest in
Oyu Tolgoi. Also, National Procurement
Team was established to optimize local
content without compromising safety,
quality, specification and price standards
of goods and services demanded by
Oyu Tolgoi. Under the direction of the
37
EITI, Mongolia Tenth EITI Report (2016), https://www.eiti-
mongolia.mn/en/reconciliation-report.
LAW REVIEW
Board of Directors of Oyu Tolgoi, these
dedicated units developed the Oyu Tolgoi
Procurement Principles and Policies.
Figure 2. Oyu Tolgoi Procurement
Principles and Policies38
After adopting the Procurement
Principles and Policies summarized
in Figure 2, Oyu Tolgoi successfully
increased the benefits of the investment
for the domestic mining supply industries.
Under the International Strategic Supplier
Collaboration Policy, major international
suppliers were required to train and
educate Mongolian nationals so that
majority of their workforce will consist
of nationals within a reasonable period.
Major successes were Redpath Mining,
a Canadian construction and engineering
company, and Atlas Copco, one of leading
mining equipment suppliers, both of which
achieved notable operational presence
in Mongolia. Within the framework of the
National Supplier Development Policy,
variety of support mechanisms were
implemented, such as price premium,
right to revise bid price, micro loan, and
supplier development programmes.
In 2016, company revisited its
Procurement Principles and Policies
and adopted a new document called
Supplier Development Policy. Compared
to the previous policy set, this new policy
establishes simple guidelines in favour of
38
Core Policies Governing OT Procurement (2014), http://
ot.mn/media/ot/content/suppliers/Useful%20Documents/
Procurement_principles_03_Supplier_Qualification_Poli-
cy_EN.pdf.
126
2017 5(65)
local suppliers.39 Some of local content
measures that are inconsistent with the
principle of competitive contract award
(e.g. price premium and right to revise
bid price) is apparently no longer effective
with the adoption of this new policy.
From the perspective of local content
literature, it is an understandable step
because these type of LCRs are harmful
to the cost efficiency of the buyer and the
competitiveness of suppliers in the long-
term if no sunset is identified at the outset.
4 CONCLUSION AND POLICY
RECOMMENDATIONS
Mongolia needs to ensure a good
macro and micro policy environment when
implementing selective policies to develop
upstream linkages to its mining industry.
It is because the efficacy of targeting
policies, including LCRs, for the mining
industry are dependent on the factors
determined by macro and micro levels.
For instance, when general investment
climate is perceived too risky to investors,
it is challenging to realise investment in the
mining sector in the first place, let alone
upstream linkages. Similarly, when local
SMEs continue to face high transaction
costs, a regulatory measure to incentivise
mining companies to buy from domestic
companies will be counterproductive,
resulting in lower taxes and diminishing
returns for the government and mining
companies respectively. Based on the
analysis of the macro, meso and micro
level policies of Mongolia, the author
suggests the following policy measures
for further consideration.
Recommendation 1: Industrial policy
and NSI (meso)
Mongolia should revise its policies and
laws pertaining NSI and industrialisation.
The current overemphasis on export-
oriented processing industries may be
39
OT Supplier Development Policy (2016), http://ot.mn/
media/ot/content/suppliers/Useful%20Documents/Procure-
ment_principles_05_Southgobi_Supplier_Development_
Policy_EN.pdf.

upgraded with a more realistic strategy
that seeks to make the most of the mining
industry by fostering upstream linkages.
For example, current plans for Darkhan
Metallurgical Plant and Sainshand
Industrial Cluster (which envisages plants
for iron pellets, coal gasification, cement;
and a copper smelter and an oil refinery)
can be integrated with the concept of
promoting a mining supplier cluster
and innovation in upstream linkages.40
Domestic demand from upstream linkages
such as metal fabrication, construction,
manufacturing of mining equipment and
spare parts can be an important leverage
for the domestic processing industries
when upstream and downstream linkages
are considered together.
Recommendation 2: Mining
agreements
Mongolia requires a negotiated
agreement for the development of mine
deposits of strategic importance. If the
following legal issues with these deposits
are addressed, the strategic targeting
of developmental FDI as advised by the
linkage theory can be achieved:
• In what circumstances, a deposit
is determined as a deposit of strategic
importance remains vague to international
investors. The government needs clear
criteria to limit the discretion of relevant
authorities.41
• Although there is a model contract
(MCA) in Mongolia guiding the potential
content of a mandatory agreement
between a mining company and local
government to maximise benefits of
mining at subnational level, there is no
model mine development agreement
for the deposits of strategic importance.
Having a model agreement may limit the
discretion of government and inform the
expectation of the government from future
40
Dieter Wagner & Odgerel Byambajav, Increasing Inno-
vation Structures In Government and Industry and Impli-
cations for Mongolia (2015), http://socialsciences.hawaii.
edu/conference/demr2015/_papers/wagner-dieter-byamba-
jav-odgerel.pdf.
41
See IGF, supra note 15, at 22.
127
Legal Researches, Summary, Results
investments.
Recommendation 3: Channel of
implementation for LCRs
Having a specific local content law or
embedding comprehensive LCRs as part
of the Minerals Law is not advisable for
Mongolia for two reasons. Firstly, a primary
legislation with LCRs tends to be inflexible
and is at odds with a successful local
content policy framework that has targeted
approach with sunset clauses.42 When a
need arises to repeal or amend the law,
this has to go through lengthy procedural
steps required for parliamentary acts.
Inflexibility also drives out investments with
marginal or low returns and may impend
future investments if LCRs are onerous.
Secondly, such law will carry the risk of
arbitration by investors or of disciplinary
action by the WTO member states. Thus,
Mongolia may consider implementing
local content policies through secondary
legislations tools such as regulation,
mining agreements and corporate policies
only for large-scale projects with high rate
of returns, although the same arbitration
or WTO discipline risks persist with lower
probability. While incentives and targets
are provided under a mine development
agreement, specific LCRs can be enacted
as procurement principles and policies
at corporate level. The government as
a shareholder in the company should
actively participate in this process.
Recommendation 3: Design of local
content policy
LCRs can be explicit if they are
enacted as mandatory quantitative
and qualitative requirements in laws
and regulations. Alternatively, they can
be implicit targets for EI companies
to receive subsidy or incentive from
governments.43 The both approaches are
problematic under the WTO agreements.
42
See IGF, supra note 1, at 98. See also Dobbs, supra note
14, at 14.
43
UNCTAD, Local Content Requirements and the Green
Economy 4 (2014), http://unctad.org/en/pages/Publication-
Webflyer.aspx?publicationid=1090.
LAW REVIEW
Nevertheless, Mongolia may formulate
a design similar to the second approach
for the deposits of strategic importance
without stating local content targets as
a prerequisite to subsidies or incentives.
Such design may entail creativity and
effort from mining companies on one
hand, and the government participation
and monitoring in these resource projects
on the other hand. In this regard, the case
of Oyu Tolgoi is illustrative of developing
competitive local supply chain.
Recommendation 4: Procurement
strategy as part of feasibility study
Requiring procurement strategy and
plan as part of feasibility study can be a
provision in the Minerals Law, but it may
be more convenient if it is embedded
in the regulation that sets criteria for
feasibility study. Such document will be
a useful source for the government when
it negotiates appropriate local content
targets with a company investing in a
deposit of strategic importance.
Recommendation 5: Mining state-
owned entities
Good corporate governance is
essential in ensuring the mining SOEs,
specifically Erdenes Mongol and Erdenet
Mining Corporation, are profitable as
commercial entities. Partial privatisation
---o0o---
128
2017 5(65)
or listing in domestic (or international)
stock exchanges may translate
into improvements in transparency,
management and accountability. Given the
highly disintegrated public procurement
system and persisting net loss in SOEs,
the government may adopt a standard
procurement policy specifically designed
for SOEs. The following can be the key
principles of such policy:
• Full, fair and reasonable access to
procurement opportunities in SOEs.
• Restricted tendering, price
quotations and direct purchase are only
allowed for lower value contracts or under
urgent circumstances.
• The award of contracts to domestic
suppliers should be based on the golden
rule of local content, that means the buyer
advantage domestic suppliers only when
all else is equal (Warner, 2011, p. 16).44
Over time local content targets,
hence specific LCRs, can be applied to
mining SOEs to progressively expand the
market for domestic suppliers. This will
also increase the scale of opportunities for
international suppliers who have already
localised their operation for some large
mining projects such as Oyu Tolgoi.
44
Michael Warner, Local Content in Procurement 16 (1st
ed., 2011).

IMPROVING THE REGULATORY FRAMEWORK FOR
FOREIGN INVESTMENT IN MINING IN MONGOLIA
THROUGH AN APPLICATION OF AUSTRALIAN
FOREIGN INVESTMENT POLICIES
Undrakhgerel Otgonbaatar
LL.M (University of New England)
Lawyer (“Erdenes Tavan tolgoi” JSC)
INTRODUCTION
In 1990, the youth of Mongolia
forced a revolution, changing Mongolia
from a socialist society to a democratic
one. Mongolia then became a free
market economy, with increasing interest
from foreign investors.1 Particularly,
Mongolia’s rich mineral reserves, such
as gold, copper, coal, uranium, lead,
zinc, phosphate, precious stones, ferrous
metals, rare earth elements and fluorspar,
have encouraged foreign companies to
establish subsidiaries in the country.2
Mongolia has the fourth largest coal
reserves and the second largest copper
resources in the world.3 In spite of its
abundance of mineral resources, the
country remains poor because the control
of its resources is in the hands of foreign
1
O Khatanbold, ‘Lessons from the Mongolia’s Millennium
Development Goal-9, and Its Achievement, Opportunities’
(2011) The Mongolian Journal of International Affairs 16.
2
Energy Charter Secretariat, ‘In-Depth Review of the In-
vestment Climate and Market Structure in the Energy Sector
of Mongolia’ (Country Reviews, Energy Charter, November
2013).
3
Ibid.
129
Legal Researches, Summary, Results
companies.4
For several years, the Mongolian
parliament has been developing a
regulatory framework and amending
current laws concerning foreign investment
in mining; it has passed more than 1600
laws since its inception in 1990.5 The
Parliament understands that, without a
sophisticated, well-organised legislation,
the economy cannot develop effectively.
There is also a recognition that weak
law enforcement leads to unprofitable
contracts between the government of
Mongolia and foreign companies. Though
there is general agreement that a sound
regulatory framework is necessary, there
are many views within parliament on
what constitutes a suitable regulatory
framework for mining.6
The present paper examines
several issues related to foreign
investment in mining in Mongolia. Also,
the paper examines the Australian
foreign investment policy and regulatory
framework with the aim of determining
whether these lessons can inform the
foreign investment regulations of mining
in Mongolia. In particular, this research
paper discusses the Australian Foreign
Investment Policy (the Policy), Foreign
4
Office of the High Commissioner for Human Rights ‘Eco-
nomic Growth is not Benefiting the Poor in Mongolia, Warns
UN Expert on Extreme Poverty’ (United Nations Human
Rights, 2012) <http://www.ohchr.org/EN/NewsEvents/Pag-
es/DisplayNews.aspx?NewsID=12875&LangID=E>.
5
Economic and Commercial Section of the US Embas-
sy in Ulaanbaatar Mongolia, ‘Mongolia Investment Climate
Statement’ (Annual Report, 15 January 2010) 40 <http://
mongolia.usembassy.gov/root/media/pdf/2010-mongolia-in-
vestment-climate-statement.pdf>.
6
Ministry of Foreign Affairs of Mongolia, ‘Introduction of
Regulation of Foreign Investment in Mongolia’ (Government
of Mongolia, 1 March 2013) 1-2 <http://www.mfa.gov.mn/
en/>.
LAW REVIEW 2017 5(65)

Investment Review Board (FIRB), and Law of Mongolia 2003; Nuclear Energy
other policies, relevant acts and mining Law of Mongolia 2009; various tax laws;
royalty experiences. Forest and River Law of Mongolia 2012;
Prohibition of Minerals Exploration in
Water Basins and Forested Area Law of
Part I: REGULATORY
Mongolia 2009; the Subsoil Law 2014; and
FRAMEWORK ISSUES
the Mineral Law of Mongolia Amendment
Mongolian regulation of foreign 2014.
investment is weak and not well
Apart from these laws being poorly
coordinated. In Mongolia, foreign
designed and causing problems for
investment in the mining sector
Mongolians, they also confuse foreign
accounts for 80 per cent of all direct
investors.11 Even when there is clarity in
foreign investment. Approximately 85
the regulations, penalties for breaches
per cent of all excavated minerals are
of the laws are minimal. For example,
purchased by China.7 Recent investors
the Investment Law of Mongolia 2013
include Australian, British, Canadian and
states that when a citizen illegally obtains
German companies. In reality, they are
a stabilisation certificate, a judge or an
the ones who are expected to manage
authorized person will charge 25-50
the mineral resources of Mongolia.8
times the minimum salary (approximately
There are 1617 mining companies in
US$2375). If a certificate is found
Mongolia as of 2013.9 In spite of its rich
to have been obtained using illegal
resources, the Mongolian economy
documents, the penalty is only 100-200
remains underdeveloped and, specifically,
times the minimum salary (approximately
most coal mines are not profitable.10 One
US$9500), an amount that is well within
reason may be because of Mongolia’s
the reach of a investor likely to require
unclear regulatory framework and lack of
such a certificate.12
mining royalty regulations.
1 The Constitution of Mongolia
This part of the research paper
1992
focuses on exploring the legal regulatory
framework issues of Mongolia and other The Constitution of Mongolia
issues relevant to foreign investment. provides for land privatisation.13 The
Constitution states that only a citizen
As already noted, the regulatory
of Mongolia is permitted to own land,
framework for foreign investment in mining
except for pastureland and areas relating
in Mongolia is currently not functioning
to the public and special use. A citizen
well. The current legislative instruments
cannot transfer his or her private land to a
to regulate foreign investment in mining
foreign or stateless person in situations of
in Mongolia include: the Constitution
bartering, donating, selling and pledging.
of Mongolia 1992; the Environmental
In fact, a Mongolian citizen cannot give
Protection Law 1995 (Mongolia); the
others possession or usage of land without
National Security Law 2001 (Mongolia);
the permission of the government.14 The
Investment Law of Mongolia 2013; Land
Government can permit temporary use of
7
Marie Chene, ‘Corruption in Natural Resource Manage-
ment in Mongolia’ (Anti-Corruption HelpDesk, Transparency land to a stateless or foreign person upon
International, 2012) 1.
8
Ibid. 11
Osborne et al, above n 9, 31.
9
David Osborne, Isabel Cane, Mel Cousins and Enkhzaya
Chuluunbaatar ‘Integrated Report: An Integrated Analysis of
12
Investment Law of Mongolia 2013 s 23.1.1.
Economic, Political and Social Issues that Support or Hinder 13
Constitution of Mongolia 1992 s 6.
Growth and Poverty Reduction in Mongolia’(Department of 14
Mashbat O Sarlagtay, ‘Managing the Transition from No-
Foreign Affairs and Trade, Adam Smith International, 6 April madic to Settled Culture’ in Jim Rolfe (ed), The Asia-Pacific:
2015) 31. A Region in Transition (Asia Pacific Centre for Security Stud-
10 Ibid. ies, 2013) 326; Constitution of Mongolia 1992 s 3.3.

130

payment for the use.15
2 Foreign Investment Law of
Mongolia, 1993 (superseded) and
Investment Law of Mongolia (2008)
(superseded)
The Parliament of Mongolia has
enacted several pieces of legislation
relating to foreign investment. First,
in 1993, the Parliament enacted the
Foreign Investment Law of Mongolia,
which established the concept of foreign
investment in Mongolia. Before 1993,
economic activities from foreign entities,
such as leasing, franchising and joint
ventures, were not established, and
were thus illegal under the Mongolian
legal system.16 Since the enactment of
the 1993 law, foreign investors became
interested in the Mongolian economy,
especially in agriculture, trading and
mining.17 However, the law did not
establish clear rights for foreign investors
and, in reality, provided foreign investors
with overly broad rights.18 The law was
then superseded by the Investment Law
of Mongolia in 2008. The Investment Law
of Mongolia 2008 intended to improve the
service of the Foreign Investment Agency
and to increase foreign investment. The
law changed the required level of new
investment from US$1000 to US$100 000.
Also, the law changed the requirements
for new foreign investments registration.19
However, the Agency’s admission process
was still underdeveloped because of a lack
of expertise and a lack of clarity of the role
of the Agency in the new law, specifically
with regard to the processes the Agency
should use to decide upon investments to
approve, what standards were required,
how to decide upon standards, and how
an investor should pursue redress if the
Agency ignored requests of registration.
This law was then superseded by the Law
on Regulation of Foreign Investment in
15
Land Law of Mongolia 2003 s 6.3.
16
Economic and Commercial Section of the US Embassy in
Ulaanbaatar Mongolia, above n 5, 14.
17
Ibid.
18
Ibid.
19
Foreign Investment Law of Mongolia 2008 s 19.3.
131
Legal Researches, Summary, Results
Business Entities Operating in Sectors of
Strategic Importance 2012.
3 Minerals Law of Mongolia 1997
(superseded), and Minerals Law of
Mongolia 2006 (amended)
The Minerals Law of Mongolia 1997
regulated the mineral sector in Mongolia
for nine years. However, the law did not
set out a method of royalty entitlements
from the mining sector.20 There was a
requirement that foreigners own a 100 per
cent share of a business without regulatory
and administrative requirements,21 and it
was relatively easy for foreigners to breach
Mongolian laws relating to the mineral
law. Thus, in 2006, the Parliament of
Mongolia amended the Minerals Law and
established a new concept of strategically
important deposits that authorized the
government of Mongolia to own between
34 and 50 per cent of mineral resources,
either independently or jointly ownership
with investors.22 This approach contributed
significantly to the country’s economic
growth, increasing GDP per year by 5
per cent.23 The amended law had other
beneficial provisions. For example, if the
government contributed to the exploration
of a strategically important deposit, the
government was able to claim up to 50 per
cent of the mining rights.24
The law also included a number of
restrictions. For example, it restricted the
number of licences in the petroleum and
mineral sectors registered in Mongolia,
which had been available under the
Foreign Investment law 1993.25 In
addition, the law restricted both foreign
and domestic investors because it became
more complex to obtain permission to
mine and instruction on how to apply for
mining rights were poor; the government’s
20
Mineral Law of Mongolia 1997 s 1.
21
Economic and commercial section of the US Embassy in
Ulaanbaatar Mongolia, above n 5, 3.
22
Ibid 4.
23
Ibid.
24
Ibid.
25
Minerals Law of Mongolia 2006 s 5.
LAW REVIEW
interpretation of the rules often created
administrative conflicts with stakeholders.
Because of the unintended restrictions and
difficulties, the law was again amended by
the Mineral law of Mongolia Amendment
2014.
4 Land Law of Mongolia 2003
Mongolia’s Land Law regulates
ownership, possession, use and
exploration of land. The law provides that
land possession as a legitimate control of
land relating to the purpose of the law use
and provisions and conditions stated.26
More specifically, Mongolian citizens,
foreign and domestic companies, and
non-profit organisations are entitled to
possess land, and are able to negotiate
for land possession agreements with
the government.27 The period of land
possession agreements can be from 15-
60 years. Land possession licences may
be extended once for no longer than 40
years.28 However, administration which
regulates all the processes of using land
in Mongolia, is underdeveloped.
5 Tax Legislation of Mongolia
Mongolia has several tax laws,
including the General Tax Law of Mongolia
2008, Corporate Income Tax Law of
Mongolia 2006 and Windfall Profits Tax
Law of Mongolia 2006 that are relevant to
foreign investments. Any foreign investors
who are conducting business in Mongolia
must adhere to these tax laws.
Mongolian taxation law provides
quite generous provisions to foreign
investors, and offers a few incentives and
exemptions according to the Corporate
Income Tax Law of Mongolia 2006
(Amendment). The Parliament revoked
an exemption opportunity on 10 per cent
value-added taxes of equipment to be used
for mining production, except on mining
equipment to be used for highly processed
26
Land Law of Mongolia 2003 s 2.2.
27
Ibid art 2.2.
28
Ibid s 3.1.1.
132
2017 5(65)
mining production.29 For example, the
Corporate Income Tax Law provides that
equipment imported into Mongolia to grow
this sort of operation, would not succeed
in gaining the 10 per cent value-added tax
exemption.30 This rule is being imposed
in spite of the Government’s desire to
promote value-added production in the
country. Classifications of what comprises
a value-added product are not clear.
Foreign investors express
nervousness with the uncertainty of the
tax legislation.31 For example, there should
be notification of changes to legislation in
official public channels before enactment.
However, in 2006, the Parliament enacted
the Windfall Profits Tax Law of Mongolia
2006 in six days without any consultation
or public notices.32 Foreign investors also
claim that legislation contains principles
that cannot be enforced, which leads to
arbitrary, unpredictable results on tax
audits.33
6 Prohibition of Minerals
Exploration in Water Basins and
Forested Area Law of Mongolia 2009
In 2009, the Parliament enacted
Prohibition of Minerals Exploration in
Water Basins and Forested Area Law
of Mongolia. The law intends to prevent
damage to the environment caused
by exploration and gold mining, and to
preserve forest and watersheds.34 The
law revokes licences to explore or mine
minerals within 200 meters from water
or forest resources.35 In addition, the law
requires the government to compensate
those with entitlements who have already
incurred exploration costs or who will suffer
29
Economic and Commercial Section of the US Embassy in
Ulaanbaatar Mongolia, above n 5, 8.
30
Corporate Income Tax of Mongolia 2006 s 19.
31
Ibid 19.
32
Ibid 41.
33
Ibid 65.
34
Prohibition Minerals Exploration in Water Basins and For-
ested Area Law of Mongolia 2009 s 1.
35
Ibid s 4.3.

revenue lost from operating mine sites.36
Under this law, foreign and domestic
investors must follow the terms set by
the law. However, it is difficult for those
who have already started their mining
activity to follow the new provision.37
Moreover, although the law provides for
compensation, it does not establish the
detail for indemnifying entitled holders.
7 Law on Regulation of Foreign
Investment in Business Entities
Operating in Sectors of Strategic
Importance 2012 (superseded)
The Law on Regulation of Foreign
Investment in Business Entities Operating
in Sectors of Strategic Importance
intended to generate uniform investment
opportunities for all investors in Mongolia.
The law provided investors with legal rights
and obligations – including tax obligations,
and sets out the responsibilities, powers
and frameworks of relevant agencies to
will regulate the investment in mining.38
More specifically, the law eased several
restrictions on foreign investment,
such as providing tax stabilisation legal
documents and specific investment
guarantees.39 However, the law does not
provide for pension funds and sovereign
funds, or provide a definition of a state-
owned entity. Following revision, the law
was superseded by the Investment Law of
Mongolia in 2013.
8 Investment Law of Mongolia
2013
The Investment Law of Mongolia
eliminates restrictions on private foreign
investors. The law defines investment
as ‘the tangible and intangible assets
attributed to the joint capital and reflected
in financial statements of the business
36
Prohibition Minerals Exploration in Water Basins and For-
ested Area Law of Mongolia 2009 s 5.
37
Economic and Commercial Section of the US. Embassy
in Ulaanbaatar Mongolia, above n 5, 7.
38
Law on Regulation of Foreign Investment in Business En-
tities Operating in Sectors of Strategic Importance 2012 s 4.
39
Allens><Linklaters, ‘Focus: Mongolia’s New Investment
Law’ (21 October 2013) <http://www.allens.com.au/pubs/
asia/foasia21oct13.htm>.
133
Legal Researches, Summary, Results
entities which are for profit oriented
activities in the territory of Mongolia’.40
The law intends to establish equal
investment opportunities for all investors.
More specifically, the law pursues stable
investment opportunities by offering tax
incentives, investment agreements and
tax stabilisation certificates.41 However,
the administration of the law is not well
organised. In addition, the law does
not apply to investments by Mongolian
state authorities with state funding,
not to investments by international
organisations, such as private persons
in the form of donations or ex gratia
grants.42 Furthermore, the law establishes
the investment agreement between
the government of Mongolia with both
domestic and foreign investors,43 but
does not establish entry into investment
agreements relating to the nuclear energy
sector.
The law provides that, if a foreign
government owned legal entity holds
33 per cent or more percentage of
the total shares issued by the legal
entity of Mongolia, which deal with
businesses in the sectors of mining,
banking and finance, and the media and
communication, they must get permission
from the government.44 The law provides
general definitions relating to investment,
tax environment, foreign investor and
domestic investors etc.45 However, the
law does not define how businesses in
the sector of mining, banking, media and
communications obtain permission from
the government, making it difficult for
investors to understand the operation of
40
Investment Law of Mongolia 2013 s 3.1.1
41
Allens><Linklaters, Structuring and Implementing an In-
vestment in Mongolia (2014) <https://www.allens.com.au/
pubs/pdf/MongoliaResourcesInvestment.pdf>.
42
Hogan Lovells, Mongolia Revises its Regulatory
Framework for Foreign and Domestic Investment (Octo-
ber 2013) <http://www.hoganlovells.com/files/Uploads/
Documents/13.11.01_F_Mongolia_revises_its_regulato-
ry_framework_for_foreign_and_domestic_investment_Oc-
tober_2013.pdf>.
43
Foreign Investment Law of Mongolia 2013 s 20.
44
Ibid s 21.
45
Ibid s 3.
LAW REVIEW
the legislation in general.
9 Mineral Law of Mongolia
Amendment (2014)
The Mineral Law of Mongolia
Amendment introduces 13 new provisions
with the intention of improving the legal
framework for mining.46 The amendment
provides for local governments to delay,
or entirely veto exploration and mining
activities in their jurisdictions, even
after the central government has issued
appropriate licences.47 More specifically,
the amendments establish new mandates
that require mining companies to source
inputs, for example labour and materials,
from Mongolia.48
Although an improvement, the legal
framework continues to have problems.49
One key problem is that the amendment
does not provide a definition of how
the market price is to be determined
and implemented for local processing,
labour requirement and procurement.50
It is unclear how certain provisions of
the current law should be implement in
practice without detailed regulation and
definition.
10 Mineral Policy Law of Mongolia
on Common Minerals 2014
The Mineral Policy Law (Policy)
sets out the objectives for the Mongolian
mining sector to encourage foreign and
domestic investments.51 More specifically,
the policy intends to encourage the
private sector, promote transparency and
responsible government, and protection
of the environment.52 The Policy does not
46
Hogan Lovells, Amendment to the Law of Mongolia on
Minerals (5 September 2014) <http://www.hoganlovells.
com/note-on-the-amendment-to-the-law-of-mongolia-on-
minerals-dated-1-july-2014-08-26-2014/>.
47
Ibid 8.
48
Mineral Law of Mongolia Amendment 2014 s 3
49
Economic and Commercial Section of the US Embassy in
Ulaanbaatar Mongolia, Mongolia Investment Climate State-
ment, (Annual Report, Embassy of the United States Ulaan-
baatar Mongolia, June 2015) 16.
50
Ibid 8.
51
Mineral Policy Law of Mongolia on Common Minerals
2014 s 1.
52
Ibid s 1.1.
134
2017 5(65)
provide miscellaneous provisions. It is
not clear what will happen if the Policy is
breached. Furthermore, the Policy does
not establish how to manage foreign
investment and how to determine foreign
investment approval. In fact, it will remain
to be seen how objectives for the mining
sector are regulated through amendments
to the Mineral law of Mongolia and other
laws relating to mining, and the creation of
new regulation.53
SUMMARY
The above sub-sections focused on
the history of the regulatory framework of
foreign investment in mining in Mongolia
between 1993 and 2014. Over the past
21 years, the Mongolian regulatory
framework continues to be inadequate
to the task of regulating the investment
sector and providing economic benefits to
Mongolia from investments. The regulatory
framework is still at the development state;
currently, it is largely incomprehensible
and does not have clear provisions,
hampered by a lack of expertise. There are
great number of regulations which adds
to confusion for investors. The legislation
lacks implementable and unenforceable
principles because lawmakers do not
include specific details in the legislation.
Furthermore, remuneration levels and
miscellaneous provisions in legislation
are extremely low, thus failing to bring
significant financial benefits to Mongolia.
Also, the laws do not define how foreign
sectors obtain permission from the
government, making it investors unclear to
understand the operation of the legislation.
The next section of the paper will explore
Australian foreign investment regulations,
the independent Foreign Investment
Review Board, protection of the national
interest and mining royalty legislation.
To improve the regulatory framework for
foreign investment in mining in Mongolia,
Mongolia could learn from Australian
foreign investment policies and regulation.
53
Mineral Policy Law of Mongolia on Common Minerals
2014 s 1.1.

Part II: Legal Framework of For-
eign Investment in Mining in Australia
Australia has one of the most
abundant sources of mineral wealth in the
world,54 including in gold, iron ore, lead,
nickel, rutile, uranium, zinc and zircon.
Australia has the second largest resources
of bauxite, cobalt, copper, niobium, silver
and tantalum.55 Australia is one of the
world leaders in mining because of its
experience, and the transparency and
openness in its foreign investment legal
framework.56 Mongolia, like Australia,
has abundant resources. However, the
country is not rich and the people are not
benefiting from the country’s resources
because of the country’s poorly developed
management of mining and foreign
investment policy.
Australia is known for its experience
and efficiency in its regulation of foreign
investment in the mining sector.57
Australia has an independent foreign
investment review board, mining royalty
legislation and an efficient method
of protecting its national interest and
natural resource management.58 It also
has better negotiation standards for
long term mine agreements than those
practices in Mongolia. In short, there are
lessons that Mongolia could learn from
Australia’s management of its resources.
The discussion considers the Australian
regulatory framework relating to foreign
investment.
When a foreigner is considering
investing in the mineral sector in
Australia, there are several legal issues
that should be considered: foreign
investment approval, native title, heritage,
environmental approvals, exploration
54
Geoscience Australia, Australian Government, Mineral
Basics (October 2010) <http://www.ga.gov.au/scientific-top-
ics/minerals/basics>.
55
Ibid.
56
Robin H Chambers, An Overview of the Australian Legal
Framework for Mining Projects in Australia, (Chambers and
Company, May 2006)
57
Osborne et al, above n 9, 40.
58
Ibid.
135
Legal Researches, Summary, Results
approvals and mining tenure, competing
resources, planning, rail, port, electricity
and water access, competition issues,
royalties, tax issues, landholder issues,
employee relations and skilled labor.59
Australia’s foreign investment rules consist
of the Foreign Acquisitions and Takeovers
Act 1975 (Cth) (‘FATA’), 60 the Foreign
Acquisitions and Takeovers Regulations
1989 (Cth),61 Foreign Acquisitions and
Takeovers (Notices) Regulations 197562
and Australia’s Foreign Investment
Policy (2015) (‘the Policy’).63 The Policy
defines aspects of the relevant legislation
and establishes further obligations.
In addition, Australia has a Foreign
Investment Review Board (FIRB), which
is an independent board and advises the
government and administration of the
FATA. Mongolia does not have specific
rules concerning foreign investment, nor
does it have a non-statutory independent
foreign investment review board.
1 Foreign Acquisitions and
Takeovers Act 1975 (Cth)
The purpose of the FATA is to
enable the monitoring and control of the
level of foreign investment in Australia.
The FATA defines direct investment
broadly as any investment in more than
10 per cent of the target, and lower
levels of investment where a strategic
stake is being established or there is an
ability to influence or control the target.64
The FATA defines foreign investor and
foreign government investor:65 a foreign
government investor is defined by section
17F of the FATA as an entity that is a
foreign body politic or controlled by one;66
59
Corrs Chambers Westgarth lawyers, Investing in the Aus-
tralian Mining Industry (2015) <www.corrs.com.au>.
60
Foreign Acquisitions and Takeovers Act 1975 (Cth).
61
Foreign Acquisitions and Takeovers Regulations 1989
(Cth).
62
Foreign Acquisitions and Takeovers (Notices) Regula-
tions 1975 (Cth).
63
The Policy (2015).
64
Wallin, Moore and Goldman, above n 120.
65
FATA s 17E; 17F.
66
Ibid s 17F.
LAW REVIEW
and a foreign investor is defined in relation
to the entity – entity means not a foreign
government investor.67
The FATA contains miscellaneous
provisions in accordance with the Crimes
Act 1914 (Cth)68 and Criminal Code Act
1995 (Cth).69 In 2009, the Commonwealth
Government amended to clarify the
framework of the FATA so that it applies
equally to all foreign investors.70 The
amendment intends to capture complex
investment structures, which are likely
to provide avenues of further control,
such as with traditional shares or voting
power. The Commonwealth Treasurer
has the ability to inspect all considerable
importance investment proposals.71
The FATA establishes a balance
between encouraging investments
and ensuring that the government can
review any important proposal of foreign
investment that is contrary to Australia’s
national interest.72 The national interest is
defined by the FATA as: national security;
competition; effect on the economy and
community; and impact on other Australian
government frameworks, including tax and
environmental policies.73 The Australian
Commonwealth government determines
‘the national interest concerns on a case-
by-case basis’.74 In making determinations,
the government considers the relative
importance and a range of factors, which
would depend upon the target enterprise.
The government, typically, focuses on the
following sectors when assessing foreign
investment proposals: competition; other
Australian state’s policies (including tax);
67
Ibid s 17E.
68
Crimes Act 1914 (Cth).
69
Foreign Investment Review Board, ‘Foreign Investment
Review Board Annual Report 13/14’ (Australian Govern-
ment, 27 April 2015); Criminal Code Act 1995 (Cth), 65.
70
FATA (Cth).
71
Foreign Investment Review Board, ‘Overview of the For-
eign Acquisitions and Takeovers Act 1975’ Chapter 3 (Aus-
tralian Government, 2015)
72
Ibid s 18(2), 19(2), 20(2), 21(2) and 21A(2).
73
Ibid s 18(2), 19(2), 20(2), 21(2) and 21A(2).
74
Australian Trade Commission, Regulation of Foreign In-
vestment in Australia (March 2011) <www.austrade.gov.au>.
136
2017 5(65)
national security; the community and
character of the investor and impact on
the economy.75 Furthermore, the national
interest test recognizes the essentials of
a market-based system in that foreign
investors are assessable to investment
and shareholders and sales determination
are made by market forces rather than
non-commercial considerations or
external strategic.76
Under the FATA, the main regulator of
Australian foreign investment regime is the
Commonwealth Treasurer or his delegate,
who has the power to review proposals for
foreign investment and decide whether it
is against Australia’s national interest.77
More specifically, the Treasurer can
restrict proposals which are against
Australia’s national interest or ensure that
the investments impact conditions are
not against Australia’s national interest.78
Australia prefers such a flexible approach.
Therefore, under the FATA, the Treasurer
considers the investment applications and
makes a decision within 30 days.79 The
Treasurer is able to extend this decision-
making period for up to 90 days or publish
an interim order.80 Generally, the interim
order is more considered if a proposal
is unclear or additional information is
required. In addition, the treasurer focuses
the influence of the foreign investment on
the Australian economy generally. Thus,
a foreign person is not allowed to enter
the agreement within 40 days, including
30 days decision period and 10 days
notification period if there is not given a
objection notice.81 The FATA does not
75
Australian Trade Commission, above n 139.
76
The Policy.
77
FATA s 21.
78
Robin H Chambers AO and Pierre Lau, Foreign Invest-
ment in Australia-Legal Framework (Chambers and Com-
pany, 11 March 2014) <http://www.chamberslawyers.com/
wp-content/uploads/downloads/2014/10/Foreign-Invest-
ment-in-Australia-Legal-Framework.pdf>.
79
Ibid s 25.
80
FATA s 23(2).
81
Australian Government, Foreign Investment Re-
forms Factsheet: Legislative overview <http://www.firb.
gov.au/content/strengthening_FIF/downloads/Legisla-
tion-FIRB-Fact-Sheet.pdf>.

establish the Treasurer with power to
accept foreign and domestic investment
proposals.82 Only the FIRB approves an
investment proposal under the Policy.83
The FIRB will also consider an applicant
to ensure that the national interest is
protected.84 The FIRB will be discussed
later in this paper.
The concept of the protection of
the national interest, provided under the
FATA, may be a key lesson for Mongolia
to consider. Mongolia does not regulate
and protect its national interest effectively.
There is the Constitution of Mongolia85
and National Security Law of Mongolia
2001 which define ‘national interest’ and
the existence of favourable conditions,
both domestically and externally, for
ensuring Mongolia’s national interests.86
Legislation should be passed in Mongolia,
perhaps adapting Australia’s example, to
protect Mongolia’s national interest.
2 Foreign Investment Policy in
Australia
The Policy is the key document
regulating foreign investment in Australia;
it interprets and clarifies the legal
framework of foreign investment.87 The
Policy was established in 1975 by the
Commonwealth government. It provides
that ‘Australia wished to encourage foreign
investment on a basis that recognises
the needs and aspirations of Australia’.88
82
Ibid 18, 19, 20, 21 and 21A.
83
McCullough Robertson, ‘Further changes to foreign in-
vestment rules proposed’ (16 April 2015) <http://www.mc-
cullough.com.au/icms_docs/215414_Further_changes_to_
foreign_investment_rules_proposed.pdf>.
84
The Policy.
85
Constitution of Mongolia 1992.
86
Damba Ganbat, National Security Concept of Mongolia:
Basic Principle (2012), 92 <www.nids.go.jp/english/pub-
lication/joint_research/series11/pdf/09.pdf>; Constitution
of Mongolia 1992 s 11; National Security Law of Mongolia
2001 s 3.1.
87
Megan Bowman, George Gilligan and Justin O’Brien,
Foreign Investment Law and Policy in Australia, A Critical
Analysis (13 February 2014 University of New South Wales,
Centre for Law, Market and Regulation)
88
Australian Government Treasury, Foreign Investment
Policy in Australia-A brief History and Recent Develop-
ments <http://archive.treasury.gov.au/documents/195/PDF/
round5.pdf>.
137
Legal Researches, Summary, Results
Under the policy, foreign governments
and their related entities, and foreign
companies must notify and additional
prior approval from the FIRB before
investing in Australia.89 Specifically, the
Policy indicates the conditions in which
an investment proposal is contrary to the
national interest in relation to the FATA.90
The Policy also indicates what areas of
economy investors will typically work, and
the nature of the funding of the acquisition.
In addition, it sets out what level of
Australian participation will remain after the
investment starts and who has interests,
such as stakeholders, employees and
creditors.91 The Deputy Prime Minister and
Treasurer are responsible for managing
the foreign investment framework under
the Policy and the FATA.92 Another
important provision of the Policy is that
the foreign investment proposal must be
approved and must comply with the FATA,
the Policy and other relevant legislation,
including the takeover provisions of the
Corporations Act 2001 (Cth),93 and the
Trade Practices Act 1974 (Cth).94
The Policy guides an understanding
of the Government’s approach and
administration of the relevant Acts to assist
foreign investors.95 It also sets out even if
the relevant legislation do not appear to
apply, investment categories which should
be submitted to the Government for prior
approval.96
Mongolian foreign investment
policy is weak and does not guide
foreign investors in how to understand
the government approach to foreign
investments and relevant legislation.
There is only the Mineral Policy Law of
Mongolia on Common Minerals (2014),
89
Wallin, Moore and Goldman, above n 124.
90
FATA s 20(b).
91
The Policy.
92
Australian Trade Commission, above n 143.
93
Corporations Act 2001 (Cth)
94
Trade Practices Act 1974 (Cth)
95
The Policy.
96
Ibid.
LAW REVIEW
but it provides no specific details. Mongolia
could apply Australia’s policy approach.
To determine whether the investment
proposal is contrary to the national
interest, a case-by-case approach like
Australia’s policy could be adopted.
Furthermore, the Mongolian government
should invest responsibility to manage
the foreign investment under the foreign
investment policy and other relevant
legislation in the Treasurer and to guide
the approval process, administration
and interpretation relating to the foreign
investment in mining.
3 The Foreign Investment Review
Board
The FIRB is a non-statutory body.97
It advises the Treasurer under the Policy
and advises on the administration of the
FATA.98 The FIRB examines proposals of
foreign investors to invest in Australia and
makes recommendation to the Treasurer
under the FATA and the Policy.99 To
protect the national interest whilst
maximising investment flows, certain
foreign acquisitions of shares and assets
are reviewed by the FIRB.100 Generally,
the purpose of FIRB is to advise the
Treasurer on policy operations and other
relevant legislation as well as to examine
and recommend foreign investment
proposals using the Policy as background
101
The FIRB also promotes awareness
and understanding of the Policy and
relevant legislation, both in Australia and
internationally, so that foreign investors,
their representatives or agents, can
Foreign Investment Review Board, Australian Govern-
97
ment, Who Are We (2015) <http://www.firb.gov.au/content/
who.asp>.
98
David L Anderson, Foreign Investment Control in the
Mining Sector, Comparisons of Australia and Canadian Ex-
perience, (Centre for Resource and Environmental Studies,
Australian National University, 1983).
99
Foreign Investment Review Board, Scheduled Mainte-
nance (22 September 2015) Australian Government <http://
www.firb.gov.au/content/default.asp>.
100
Australian Trade Commission, Investing in Australia
(2015) Australian Government <https://www.austrade.gov.
au/International/Invest/Guide-to-investing/Investing-in-Aus-
tralia>.
101
Australian Government Treasury, above n 110.
138
2017 5(65)
monitor compliance.102
The FIRB works under these
guidelines to provide relevant information,
advice and consultation arrangements
in accordance with the Public Service
Act 1999,103 Freedom of Information Act
1982104 and Privacy Act 1988.105 The
FIRB works with an applicant to ensure,
case-by-case, that the national interest
is protected.106 The Government ensures
that the investment corresponds to
the national interest. All determination
of a foreign investment proposal by
the Treasurer are analyzed and as
recommended made by the FIRB.107 If
the purpose of the investment would
be contrary to the national interest, the
Treasurer is able to block or implement
conditions to ensure that the national
interest is protected under the advice of
the FIRB.108
Annually, the FIRB presents an
annual report for the Treasurer. The
Annual Report is not statutorily mandated
but provides information on Australian
foreign investment arrangement.109 For
example, the annual report provides
contains an overview of the main rules of
FATA and the Policy and a summary of the
foreign investment framework.110
4 Mining Royalties
A mining royalty is a payment made to
the owner of the minerals in return for the
exploitation of the minerals.111 Payment of
a royalty gives the company the permission
to access to the minerals and develop
102
Ibid.
103
Public Service Act 1999 (Cth).
104
Freedom of Information Act 1982 (Cth).
105
Privacy Act 1988 (Cth).
106
The Policy.
107
Kali Sanyal, Australia’s Foreign Investment Policy (Par-
liament of Australia, 2012) <http://www.aph.gov.au/About_
Parliament/Parliamentary_Departments/Parliamentary_Li-
brary/pubs/BriefingBook44p/AustForeignInvest>.
108
Ibid.
109
FIRB, above n 162.
110
FIRB, above n 162.
111
James Otto et al, Mining Royalties: A Global Study of
Their Impact on Investors, Government, and Civil Society
(Washington, DC, World Bank Publications 2006) 42.

the resources for its own benefit.112 The
royalties are not a tax but a payment
for the right to exploit mineral resources
owned by the Crown.113 The Australian
mining royalty regime is sophisticated and
complex. Every investment in the mining
industry, whether by way of acquisition of
a business company which owns a mines
or acquisition of a interest in the mines
is examined in terms of the impact of the
Australian taxation and royalty regimes
and the ongoing conduct of the mining
activity.114 In Australia, there are mineral
royalty regulations and legislation in
each State and Territory.115 The royalties
depend on the mineral resources, which
are for domestic consumption or export.116
The royalties depends on the minerals,
except in the Northern Territory which
applies a profit-based royalty regime.117 All
foreign investors in the mining sector must
pay a royalty to the Crown.118
Mongolia does not have well mining
royalty regulation and how to determine
such a royalty for the government. It would
benefit Mongolia to set up a royalties
framework and improve the country’s
capacity to collect revenue and maximise
the capacity to implement broad-based
economic development in Mongolia. It
could adapt the Australian sophisticated
mining royalty legislation. The following
section explains the Australian royalty
legislation in more detail.
In the Australian mining royalty
system, the net value of a minerals is
calculated using the applicable royalty.119
Small mining operations are exempt
112
F T Cawood, Determining the Optimal Rent for South
African Mineral Resources (PhD diss, University of the Wit-
watersrand, Johannesburg, South Africa 1999).
113
Mineral and Petroleum Industry, above n 121.
114
Corrs Chambers Westgarth Lawyers, above n 124.
115
Ibid 76.
116
Ibid.
117
Minter Ellison, A Review of Mining Royalties in Australia
(2010) <http://www.minterellison.com/Pub/A/20090409_
miningRoyalties/>.
118
John Southalan, Mining Law and Policy: International
Perspectives (The Federation Press, 2012) 6.32.
119
Minter Ellison, above n 184.
139
Legal Researches, Summary, Results
because no liability applies to the first
$50,000 of net value.120 For example, the
Mineral Royalty Act 1982 (‘MRA’) provides
that; 121
A $50 000 royalty free threshold is
allowed whereby no royalty is payable
where the net value of a saleable mineral
commodity sold or removed without sale
from a production unit in the royalty year
is $50 000 or less. Where the net value is
more than $50 000, the royalty otherwise
payable is reduced by $10 000 effectively
maintaining the position that the first $50
000 in net value is royalty free. (s 18)
The royalties must be paid monthly,
quarterly or annually, depending on
the type or size of the resource to the
Crown.122 The Northern Territory uses a
20 per cent rate Royalty under the MRA.
According to the MRA, the royalties must
be paid for all minerals except uranium,
specified kinds of extractive minerals and
petroleum.123 The Mineral Titles Act 2010
(NT)124 regulates extractive minerals, and
uranium is subject to the relevant Uranium
Royalty (Northern Territory) Act 2009.125
Queensland regulates the payment
of royalties, using mineral resources,
civil penalties and approval of foreign
investment through the Mineral Resource
Act 1989 (QLD)126 and Mineral Resource
Regulation 2013 (QLD).127 Queensland
follows a pattern of ad valorem royalty
regimes for metallic mineral resources and
petroleum and specific royalty regimes for
non-metallic minerals and construction
materials.128
South Australia uses ad valorem
royalties for all minerals and petroleum,
whereas, the other States have no
120
Ibid.
121
Mineral Royalty Act 1982 (NT) s 18.
122
Office of State Revenue, above n 110.
123
Mineral Royalty Act 1982 (NT) s 9.
124
Mineral Titles Act 2010 (NT).
125
Uranium Royalty (Northern Territory) Act 2009 (Cth).
126
Mineral Resource Act 1989 (Qld).
127
Mineral Resource Regulation 2013 (Qld).
128
Mineral and Petroleum Industry, above n 121.
LAW REVIEW
dominant methods.129
Mongolia could apply mining royalty
regulation as Australia does. Mongolia
does not have well mining royalty
regulation, so any foreign investor is able
to negotiate mining investment without
having to pay a mining royalty. The OT
case illustrates the necessity for Mongolia
to implement royalty legislation, to enable
the country to make better agreements in
the future.
SUMMARY
Australia has significant expertise
and experience in foreign investment
regulation in mining. Australia has an
independent FIRB, a Treasurer who makes
the determination for investment, a regime
for the protection of the national interest
under the Policy and several substantive
Acts that control mining interests. There
are also mining royalty regulations in each
state. Australian’s significant expertise
and experience in foreign investment
could help to improve the Mongolian
foreign investment framework. The next
section will be discussed further how to
adapt Australian’s foreign investment
framework for Mongolia.
Part III: Improving Foreign Invest-
ment Regulation in Mongolia – Les-
sons from Australia
One of the roles of government is
to manage the exploitation of natural
resources to maximise the economic
benefit to the country.130 If the government
regulates well, foreign investment in the
mining sector can reduce poverty, and
increase efficiency in economic growth.
Foreign investment in the mineral
sector aids the host country in several
ways.131 It can increase employment
and real wage rates, introduce better
technology, provide human capital
129
Department of Mines and Petroleum, Government of
South Australia.
130
Pietro Guj, Mineral Royalties and Other Mining Specific
Taxes (International Mining for Development Centre, 2012).
131
Selma Kurtishi-Kastrati, The Effects of Foreign Direct
Investments for Host Country’s Economy (American Univer-
sity of the Middle East, Faculty of Business, 2013) 26.
140
2017 5(65)
support, and a competitive business
environment.132 However, the current
Mongolian regulatory framework is
weak and underdeveloped, and actually
restricts the country’s economic growth.
A good illustration is the OT mine project,
which illustrates the need to improve the
Mongolian regulatory framework to better
manage the potential wealth natural
resources can bring to the country. The
government has to regulate key areas
of need to improve foreign investment
in mining-sector governance, determine
the national interest on a case-by-case
basis, prevent increased corruption,
encourage educational development to
enable citizens to be qualified employees,
implement mining royalty rates and create
an independent foreign investment review
board.133
Australia is a good model country
with an experienced foreign investment
policy that Mongolia could emulate.
Australia has abundant natural resources
and the country is rich because of its well-
developed regulatory framework in foreign
investment.
The government has to regulate
more specifically relating to the
Investment Law134 and Mineral Law.135
The laws should define specific, such as
it must determine who reviews the foreign
investment proposal and who approves
foreign investment like Australia does.
The Australian Commonwealth
government determines its national interest
concerns case-by-case.136 An example is
the Australian Treasurer reviews foreign
investment proposal within 30 days and
is able to extend the review period to 90
days to determine whether the investment
is against Australia’s national interest
under the Policy and other Acts.137 If the
132
Ibid.
133
Department of Foreign Affairs and Trade, Effective Gov-
ernance Assistance in Mongolia <http://dfat.gov.au/geo/
mongolia/development-assistance/Pages/effective-gover-
nance-mongolia.aspx>.
134
Investment Law of Mongolia 2013
135
Minerals Law of Mongolia 2014
136
Australian Trade Commission, above n 139.
137
The Policy.

foreign investment proposal is not against
Australia’s national interest, the Treasurer
can impose certain conditions.138 To
improve its foreign investment framework,
The Mongolian Government should also
determine whether a certain investment is
in the national interest on a case-by-case
basis.
Under the Australian Policy, the FIRB
is responsible for advising and making
recommendation to the Treasurer.139 The
FIRB works with an applicant to make
sure the national interest is protected. In
Mongolia, such national interest protection
is much needed, as the OT investment
agreement illustrated. An independent
Foreign Investment Review Board should
be set up to make up to ensure the national
interest is protected in the future.
In the OT case, the government
agreed that the investor should only need
to pay 5 per cent of the sales value of all
mine products.140 In developed countries,
such as Australia requires the royalty
payment is a percentage of value and a flat
rate per unit, not only on the sales value
of all mining. Mongolia should implement
such a regime of mining royalties to
enable Mongolia to negotiate a better
agreement in the future. Such an outcome
to agreements would immediately result in
increased economic growth
The government should also provide
Mongolians with technical and vocational
education and training so that they can
become skilled human resources able
to be employed in the resources sector,
thus helping to ensure the country’s
sustainable economic growth based on
foreign investment in the mineral sector.141
To summarise, Mongolia should set
up a more efficient regulatory framework.
The FIRB reviews foreign investment
proposal independently and reports its
determinations through its annual report,
138
Ibid.
139
Ibid.
140
The Agreement, above n 94, cl 3.13.
141
Department of Foreign Affairs and Trade, above n 200.
---o0o---
141
Legal Researches, Summary, Results
thus promoting transparency, an example
that Mongolia should follow.
CONCLUSION
An adequate regulatory framework
is essential for the country’s development
of foreign investment in mining. Without
foreign investment, most of the natural
resources of Mongolia would stay in
the ground, because the exploitation
of minerals is expensive. Mongolia has
significant wealth in natural resources, and
started the second largest coal and copper
project in the world in 2009. However,
the country’s poverty index is increasing
day-by-day, due to unemployment. If
the government manages the country’s
mineral resources well, the mining
sector could contribute to the growth
the economy, improve livelihoods and
ultimately lift people out of poverty.
The OT investment agreement
illustrates that the Mongolian government
and other sectors have limited experience
in negotiating beneficial investment
deals. There are many laws to regulate
foreign investment in mining sector but
the laws are often amended because
the legislation is poorly conceived. Thus,
foreign investors are often confused by
the legislations and avoid investing in
Mongolia. A serious challenge is the lack
of protection of the national interest, no
independent FIRB and no regulation
to impose mining royalties. Therefore,
government negotiations with the foreign
investors often lead to poor outcomes for
Mongolia.
The Australian system has a
sophisticated way of determining the
national interest, royalty regimes and
provides an independent reviewer through
the FIRB framework. With a similar
framework, Mongolia could reduce the
need for constant renegotiations of mining
agreements with the foreign investors in
the future and the Mongolian economy
would improve its capacity to collect
revenue from the mining investment
sector.
LAW REVIEW
CHALLENGES OF IMPLEMENTING OF THE CISG IN
SOME ASIAN STATES
Tumendelger.D, A senior lecturer, The
Executive Leadership Academy of Law
Enforcement, Law Enforcement University of
Mongolia, Police captain
KEY WORDS
GISG, sale of goods, international
trade, commercial contracts, civil laws
ABSTRACT
This paper investigates problems
associated with the implementation of the
United Nations Convention on the Sale of
Goods (CISG), especially in Asia, and it
proposes that further research is needed
to determine what approach Mongolia
should take.
The United Nations Convention
on Contracts for the International Sale
of Goods, (Vienna, 1980) (CISG or
Convention) is a binding agreement
or contract between States. CISG
establishes a set of governing certain
aspects of the performance of commercial
contracts between sellers and buyers who
have their places of business in different
countries.1 It has been implemented
in the Asian region, the location of the
1
Pace University; available at http://www.cisg.law.pace.edu/
cisg/guides.html.
142
2017 5(65)
world’s second largest economy- China,
the world’s third largest economy-Japan
and South Korea another leading world
traders, as well as Mongolia- a contracting
state to the Convention.
This paper suggests the needs for
an investigation into the fundamental
laws of commercial contracts of the each
country, for example Chinese Contract
Law, Japanese Civil Code and South
Korean Civil Code and relevant cases will
be briefly examined in order to discover
the issues.
Eventually this research will
contribute to the knowledge base needed
for the development of Mongolia’s legal
infrastructure by learning the best practice
of other States which are stepping further
than Mongolia.
INTRODUCTION
This paper investigates problems
associated with the implementation of the
United Nations Convention on the Sale
of Goods (CISG) in Asian states namely
China, Japan, Korea, and Mongolia by
examining the implementation of the
CISG in those states to determine what
approach Mongolia should take.
This research paper will focuses
on a selection of law problems of certain
country that arise when the law governing
contracts of sale of goods containing
foreign elements is to be emphasized.
This paper will also investigate legal
challenges, faced by Mongolia’s
neighbouring countries and main ‘trade
partners’. Each country has its own
unique challenges in the implementing of
the CISG. Therefore, the main objective
of this research is to identify what barriers
that some Asian States have faced

and continue to face in attempting an
application of the CISG. The research
paper will touch upon economic cultural
and linguistic barriers however focus is
primarily on legal barriers of each States.
This means that this paper will investigate
the fundamental laws of commercial
contracts of each country, for example
China’s Contract Law, Japan’s Civil Code
as well as the Civil Code of Korea and
relevant cases will be briefly examined in
order to discover the issues.
Moreover, this research will
illustrate the Mongolian laws of the sale
of goods and the on-going process of the
implementation of the CISG by analysing
legal environment and education and
arbitration cases which were solved
by the Mongolian Arbitration Centre.
Eventually this research will contribute
to the knowledge base needed for
the development of Mongolia’s legal
infrastructure by learning the practice of
other ‘trade neighbouring’ States which
are stepping further and succeeding more
than Mongolia in the implementation the
Convention.
Overview of History and Scope of
the CISG
Prior to commencing an examination
of the CISG and how it has been applied
by the some Asian countries in the cases
of international sale of goods, it should
be briefly to review its history, scope and
purposes.
The United Nations Convention
on Contracts for the International Sale
of Goods, (Vienna, 1980) (the CISG or
Convention) is a binding agreement or
contract between States. CISG establishes
a set of rules governing certain aspects of
the performance of commercial contracts
between sellers and buyers who have their
places of business in different countries.2
The CISG is the uniform international
sales law of countries that account for
2
Pace University; available at http://www.cisg.law.pace.
edu/cisg/guides.html.
143
International Experience
over three quarter of all world trade and
the Convention is considered one of the
most successful international trade law
texts and has now gained worldwide
acceptance with about 2.6 countries per
year ratifying and accessing the CISG.3
As of 10 December 2014, the Convention
has been adopted by 83 States including
China, Japan, Korea and the Russian
Federation, Mongolia and 24 European
Member States 4, which has inspired
contract law reform at the national level
for each of the parties.
The contract of sale is the pillar of
the international trade in all countries,
regardless of the legal traditions or level
of the economic development. Therefore,
CISG is also considered one of the
core international trade Conventions
for its contribution to the certainty of
commercial exchanges and declining
transaction costs.5 Moreover, it can be
estimated that approximately 70% to 80%
of all international sales transactions are
potentially governed by the CISG.6
Since the Convention has been
ratified in Vienna in 1980, there has
been much success in implementing the
uniformity of the Convention, and the
overall advantages of the CISG are now
incontestable. However, there remain
several issues regarding the application
of the CISG to international trade
transactions which still seem to maintain
a strong adverse view on incorporating
3
Luca G Castellani, ‘Introduction; The Role of the Uniform
Law in the Circulation of Legal Models: The Case of the
CISG’; Schwenzer I & Hachem P,’ The CISG –Success and
Pitfalls’, The American Journal of Comparative Law, Vol 57,
No 2, p457; Schlechtriem P,’ Introduction sub. I, in Peter
Schlechtriem & Ingeborg Schwenzer,’ Commentary on the
UN Convention on the International Sale of Goods (CISG),
2nd ed,(2005); Luca G Castellani,’ Promoting the Adoption of
the United Nations Convention on Contracts for the Interna-
tional Sale of Goods’, available at: http://www.cisg.law.pace.
edu/cisg/biblio/castellani.html#20.
4
United Nations Commission on international Trade Law-
UNCITRAL http://www.uncitral.org/uncitral/en/uncitral_
texts/sale_goods/1980CISG.html.
5
United Nations Commission on international Trade Law-
UNCITRAL http://www.uncitral.org/uncitral/en/uncitral_
texts/sale_goods/1980CISG.html.
6
Above, Schwenzer,p 457.
LAW REVIEW
the Convention in legal systems.7 Overall,
for instance, the literature suggests
that the uniformity is difficult to achieve
in practice. Anderson argues that the
CISG is practised in over 50 different
languages with signatory States having
different social, economic and cultural
backgrounds, and thus the uniformity is
vague. Furthermore, the goal of uniformity
is more challenging because of the great
differences of the legal system of each
party state. Anderson speculates that
unless the CISG is fully accepted and
understood by domestic courts, recourse
to national law would seem inevitable.8
Therefore, the CISG is exercised
as both a global and regional endeavour
depending on the regional location and
the needs of the States. The literature
shows several related alternatives.9 For
example, in West Africa, the OHADA
Uniform Act on Commercial Law includes
provisions on sale contracts which follow
closely those of the CISG to promote
the economic development in the
African context to contributing to peace
and stability by establishing regional
network and cooperation. 10 Moreover,
the European Union has established the
instrument of optional form of a Common
European Sales Law that displaces the
application of the CISG.11
Similarly, in Asia, scholars of
China, Korea and Japan have initiated a
7
Schwenzer, above,p 463.
8
Camila Baasch Anderson, ‘Furthering the Uniform Applica-
tion of the CISG: Sources of Law on the Internet, available
at http://cisgw3.law.pace.edu/cisg/biblio/andersen1.html.
9
Shiyuan Han,’ Principle of Asian Contract Law: An En-
deavor of Regional Harmonization of Contact Law in East
Asia’, available at: file:///C:/Users/s4332265/Downloads/
Asain%20PACL-VLR407%20.
10
Luca G Castellani,’Ensuring Harmonisation of Conflict
Law at Regional and Global Level: the United Nations Con-
vention on Contracts for the International Sale of Goods and
Role of UNCITRAL’, available at file:///C:/Users/s4332265/
Downloads/Castellani-Africa-OHADA%20115-126.pdf.
11
Luca G Castellani,’CISG in Time of Crisis: An Opportunity
for Increased Efficiency’, in I.H. Schwenzer / L. Spagnolo,
eds., Globalization versus Regionalization, 4th Annual MAA
Peter Schlechtriem CISG Conference on 18 March 2012
in Hong Kong, Eleventh International Publishing (2013)
37-46,available at http://www.cisg.law.pace.edu/cisg/biblio/
alpha02.html.
144
2017 5(65)
model law called the Principle of Asian
Contract Law (PACL) to harmonize rules
of contract law within the principle of the
CISG.12 Initiation researchers believe that
the CISG regards only the sale of goods
and it does not cover every aspect of
contract, for instance, there is not enough
regulation of validity and transfer of
ownership. Finally, some feel that CISG
reflects mainly the experience of western
world so that an Asian voice is needed.13
However, my point of view in regard
to the Asian regional matter, because a
lot of the Asian goods are sold outside
Asia, it would seem easier to simply adopt
the CISG, rather than PACL. It is argued
that Asian countries should adopt the
international conventions, particularly the
CISG, for the uniformity of commercial
law and should actively embrace the
international standard laws which make
that uniformity possible. However, most
Asian countries are facing various issues
in their attempted implementation of the
CISG.
What barriers are there in the
implementation of the CISG in the
Asian region?
The adoption of international uniform
laws has often been slow in many parts
of Asia14 , because of the implications of
Western law influence in either common
law and civil law traditions which has
resulted in gaps in the commercial laws of
Asia, particularly contract laws.
The challenges of the implementation
of the CISG begins with China as one
12
Shiyun above n 6.
13
Han, above. n
14
Bell Gary F, ‘Harmonisation of Contract Law in Asia-Har-
monisation Regionally or Adopting Global Harmonisations-
The Example of the CISG’, Singapore Journal of Legal Stud-
ies (2005) 362;
Bell Gary F,’ New Challenges for the Uniformisation of Laws:
How the CISG is Challenged by “Asian Values” and Islamic
Law in I Schwenzer & L. Spagnolo, Towards Uniformity: The
2nd Annual MAA Schlechtriem CISG Conference, Eleven
International Publishing (2011); Larry A, DiMatteo, Interna-
tional sales law in Global Challenge, (Cambridge University
Press, 2014).

of the larger traders of the world and a
pioneer contributor to the Convention
ahead of other comparable Asian states
and hence China’s challenges shall be
discussed more than the other states in
this section.
The Convention became effective
in People’s Republic of China (China)
on 1 January 198815, declaring that
‘The People’s Republic of China does
not consider itself to be bound by sub-
paragraph (b) of paragraph 1 of article
1…’.16 Therefore, the CISG is not
applicable due to China’s reservation
regarding subparagraph (1) (b) of Article
1 of the CISG declares that, regardless
of nationality, if one party has its place of
business in China as the forum State or
another Contracting State, and the other
party has its place in a non-Contracting
State, or if both parties have their places of
business in two different non-Contracting
States. 17 Consequently, in practice, the
CISG applies to contracts of sale of goods
only if the parties have their places of
business in different Contracting States.18
Article 95 and 96 reservations of
the CISG serve as major barriers to the
application of the CISG as not being
congruous with existing Contract law 1999
PRC or court and arbitration practices.
Therefore, the impeding effects of these
barriers lead to heated arguments among
researchers and it is proposed that China
should withdraw these reservations.19
In reality, the Article 95 reservation has
resulted in confusion regarding the choice
15
CISG: Table of Contracting States http://www.cisg.law.
pace.edu/cisg/countries/cntries-China.html.
16
This is an authorised Article 95 declaration. It restricts the
role of private international law determining the applicability
of the CISG when both contracting parties do not have their
relevant places of business in Contracting States available
at: http://cisgw3.law.pace.edu/cisg/countries/cntries-China.
html.
17
Chen Weizuo,’ The Conflict of Laws in the Context of
the CISG: A Chinese Perspective’, p 120. available at http://
digitalcommons.pace.edu/pilr/vol20/iss1/6/
18
Ibid.
19
Fan Yang,’ Barriers to the Application of the United na-
tions Convention on Contracts for the International Sale of
Goods(1980) In the People’s Republic of China’, available
at: http://www.cisg.law.pace.edu/cisg/biblio/yang2.html
145
International Experience
of law issue to discourage contractual
parties from choosing Contract Law 1999
as the governing law. Meanwhile, Article
96 raises issues of not only formation
of contracts but also modification and
termination of contract uncertainties- that
a direct conflict appears to the current
Act.20 The barrier can be seen in some
cases21 that the court’s decision concluded
differently.
For over twenty years the CISG has
greatly impacted the Chinese legal system
and legal culture.22 For example, the
CISG influenced the Contract Law of the
PRC that was promulgated on 15 March
1999. Generally, Chinese judges directly
apply the CISG in the cases relating to
contracts for the international sale of
goods however, choice of law problems
still arise even though the CISG seeks to
unify substantive law in this area.23
In addition, China faced political and
economic barriers prior to 1999 and the
use of the CISG was frustrated by the lack
of a comprehensive understanding of the
Western style contract law and conflict law
rules. Moreover, in China the freedom of
contract is not granted like in the Western
legal system. This means that there is no
constitutional protection that applies to
freedom of contract in China.24
Briefly regarding other challenges,
linguistic cultural barriers also still exist
although Chinese language is one of the
20
Yang, above n.
21
Carl Hill v Cixi Old Furniture Trade Co.,Ltd available as :
http://cisgw3.law.pace.edu/cases/010718c1.html];
Engines case- China’s 6 September 1996 CIETAC Arbi-
tration proceeding available as http://cisgw3.law.pace.edu/
cases/960906c1.html].
22
Chen Weizuo,’ The Conflict of Laws in the Context of the
CISG: A Chinese Perspective’, available at http://digitalcom-
mons.pace.edu/pilr/vol20/iss1/6/
23
Chen above, n. 14; Peter North & J.J Fawcett, Chinese
and North’s Private International Law’, 603 http://www.law.
unimelb.edu.au/files/dmfile/downloadf33a1.pdf.
24
Christina Eberl-Borges & Su Yingxia, ‘ Freedom of Con-
tract in Modern Chinese legal System’, available at https://
litigationessentials.lexisnexis.com/webcd/app?action=Doc-
umentDisplay&crawlid=1&doctype=cite&docid=46+-
Geo.+Wash.+Int%27l+L.+Rev.+341&srctype=smi&sr-
cid=3B15&key=a1a826cab90e9fb1145c03dc0c7231c3.
LAW REVIEW
six authentic texts of the Convention.25
For instance, one of the fundamental
concepts of contract law ‘offer- yaoyue’
and ‘acceptance- chengnuo’ was
translated differently such as ‘fajia’ and
‘jieshou faji’.26 Hence, it is suggested that
the Chinese text of the CISG should be
revised and updated to some extent27.
Although China’s CISG application
in arbitration practice is more advanced
28
than in those compared States there
are problems in practice of China
International Economic and Trade
Arbitration Commission (CIETAC),29
the reasoning for the application of the
CISG seems not always comprehensive,
too little or no reference at all to cases
or even without spelling out any reason
or rationale employed to support the
Tribunal’s awards.30 In addition, the
majority of Chinese arbitral awards
application the CISG were mainly made
by CIETAC. Considering that the issue of
the application of the CISG is viewed in a
different light in arbitration than in a State
court; therefore critical and reviewed
analyses are employed in determining the
application of the CISG.31
In summary, China’s challenges have
been discussed in this paper highlighting
the harmonisation and uniformity goals
of the CISG, not denying the effect of the
Convention but raising concern over the
other states legal professionals and their
experiences.
25
Article 101 of the CISG states, inter alia: ‘…in a single
original, of which the Arabic, Chinese, English, French Rus-
sian and Spanish text are equally authentic.’
26
Zhang Yuqing, Commentary on the United Nations Con-
vention on Contracts for The International Sale of Goods, 3rd
edition., China Commerce and Trade Press (2009), p 111.
27
Fan Yang, above n.
28
As of 15 Jan 2017, the China’s 435 cases on the CISG
scheduled at http://www.cisg.law.pace.edu/cisg/text/casecit.
html.
29
CIETAC’s history dates back to 1956, before the CISG has
been ratified. Headquartered in Beijing with two sub-com-
missions and its caseload in increasing respectfully.
30
Fan Yang, above n.
31
Ibid.
146
2017 5(65)
Japan’s hesitation over accession
to the CISG and the Recognition of the
CISG in Korean Legal Community
Japan took a long time to accede
to the Convention, one of the reasons
being that the major Japan’s trading
companies (sogo-shosha) were reluctant
to take on the cost of learning the CISG
and repeatedly opted out of it.32 Finally,
the CISG entered into force in Japan on
August 1, 2009.
Briefly analysing the challenges,
Japan had no precedent for the CISG and
cases on national sales law were actually
rare,33 which means that Japanese do not
like to litigate over sales contracts. This
could be explained in that Japan does
not have much experience in solving
legal disputes regarding international
commerce.34
Moreover, one of the problems
regarding the CISG is the conflict of law
approach that often leads to a deadlock.
The Civil Code 1898 that was transplanted
from western laws such as German law
and French law is the main act governing
commerce. It is noteworthy that the key
concept of the fundamental breach in the
CISG and Civil Code is different. 35 The
issue seems that Japan’s Civil Code 1898
is out-dated and so Japan’s government
has started to reform its legal system .36
In this light, Japan should revise its Civil
Code to accommodate the harmonisation
of the CISG.
The recognition of the CISG in the
Korean legal community as a process
32
Hiroo Soho,’Japan’s Accession to the CISG: The Asia
Factor’, available at: http://sydney.edu.au/law/anjel/docu-
ments/ZJapanR/ZJapanR25/ZJapanR25_15_Sono.pdf.
33
This is evidenced that the Japan’s only 1 CISG case is
scheduled at http://www.cisg.law.pace.edu/cisg/text/casecit.
html as of 20 Jan 2017.
34
Nomi Yoshihisa,’ The CISG from the Asian Perspective’,
available at http://www.cisg.law.pace.edu/cisg/biblio/nomi.
html
35
Ibid.
36
Chen Tsung-Fu,’ Transplant of Civil Code in Japan, Tai-
wan and China: With the Focus of legal Evolution’, http://
www.law.ntu.edu.tw/ntulawreview/articles/6-1/14Arti-
cle-Tsung%20fu%20Chen_389-432.pdf.

began almost the same time with other
Asian states since People’s Republic of
Korea (Korea) ratified the Convention on
1 March 2005.37 There was only one case
which applied the CISG by the Korean
High court by within the first 5 years.38 The
major reason for the lack of recognition
or much reluctance of the judges to use
the CISG was of the same nature to
those in Japan39 and the same was true
in Mongolia.
Since this paper focuses on the
challenges of the CISG, the Korean court
did not sufficiently analyse why it was
applying the CISG. The main issue in the
case 40 brought to the Korean High court
was that of the applicability of the CISG,
fundamental breach and avoidance of
contract and the scope of damage issues
of the sales contract.
Notably, for the last decade in
Korea, the situation has improved
significantly through the contribution of
the government, universities and legal
institutes to develop the recognition
of the Convention. Therefore, the
application of the CISG is increasing in
Korea41 but not sufficiently developing
as the neighbour China. Therefore, it
is suggested (footnote who suggested
this) that Korea is better at educating
the legal professionals by eliminating the
unfamiliarity or unawareness of the CISG
due to the recognised fact that the overall
37
Young Eui Ki,’ The Present and Future Role of the CISG
in Korea’, available at: http://cisgw3.law.pace.edu/cisg/bib-
lio/kim2.pdf.
38
The first court ruling regarding the delivery of goods in
instalment: Seoul Dongbu District Court decision 2006, Ga
Hap6384 decided on 16 November 2007 was reversed by
the Seoul High Court Decision 2008Na 14857 decided on
23 July, 2009.
39
Yong Eui Kim, ‘ The Present and Future Role of the CISG
in Korea’ http://cisgw3.law.pace.edu/cisg/biblio/kim1.pdf.
40
Seoul High Court 2009.7.23. Sentence 2008Na14857
Judgment.
41
Chang –sup Shin, ‘Korea’s Joining the CISG Regime and
Its Implications In Terms of Forming Legal Framework Gov-
erning International Sales Transactions in the East – Asian
Region’, Business Law in the Globalization Age In Honour of
the Retirement of of Prof.Ki-soo Le, Pakyoungsa , Decem-
ber 2010, p 708-711; Also, it is evidenced that as of 15 Jan
2017, South Korean 7 cases of the CISG scheduled http://
www.cisg.law.pace.edu/cisg/text/casecit.html.
147
International Experience
advantages of the CISG are undisputable.
Mongolian legal environment and
the settlement of the CISG
Mongolia has a civil law system and
is part of the Romano-Germanic legal
tradition. During the socialist time, the
legal system was further influenced by the
Soviet Union. Before the adoption of the
CISG in Mongolia, Moscow Convention
1972 was ratified in 1973 and it is still in
effect.42 The preamble of this convention
declared that
[t]he parties (“socialist” States)
were motivated to ensure favourable
legal conditions for further extension and
perfection of mutual economic, scientific
and technical cooperation.43
Consequently, the Moscow
Convention is widely used among
Mongolia’s international traders,
particularly, with former socialist countries
namely, Russia, Belarus, Ukraine,
Kazakhstan and other former soviet
countries.44 Moreover, in 1988, Mongolia
signed an agreement with China for mutual
assistance concerning the sale of goods.
Disputes associated with this agreement
were to be solved by arbitration.45 At
that time, Mongolia’s major trading
partners were China and Russia, as a
permanently neighbouring countries, and
now strong trade relationships also exist
with the European Union, the Republic
of Korea and Japan. More than 70 % of
the international sales are with tChina and
Russia as well as Japan, Korea accounted
42
Mendsaikhan, above, n.
43
George Ginsburgs William B Simons, ‘ The Soviet Union
and International Cooperation in Legal Matters: Recognition
of Arbitral Agreements and Execution of Foreign Commer-
cial Arbitral Awards, (1988) https://books.google.com.au/
books?id=mFU9n5HTHY4C&pg=PA110&lpg=PA110&d-
q=Moscow+Convention+1972&source=bl&ots=j9TIzdw7x-
p&sig=MPs9WJ8oBz9s_ZKIVxz8Q-quE3w&hl=en&sa=X-
&ei=8h-3VOS8OYbLmAWi2YHIAQ&ved=0CEYQ6AEwB-
w#v=onepage&q=Moscow%20Convention%201972.
44
Tsognyam B,’ Choice of Law in Arbitration in Mongolia’,
Journal of Arbitration and Business, Vol 3, Ulaanbatar , [au-
thor’s translation].
45
Mendshaikhan T, above, n.
LAW REVIEW
for about 20% of total sale of goods.46
In 1990, the totalitarian regime was
abolished rejecting planned economy and
preferring a market economy and a rule of
law developed in Mongolia. 47 Since 1990,
legal reform has been done progressively
and under the Constitution of Mongolia,
international law became part of the legal
framework of Mongolia.
In 1993, Mongolia adopted the
Law on International Conventions of
Mongolia containing the state principles
on the international conventions and
treaties to which Mongolia is a party. In
1997, Mongolia became a member of
World Trade Organization and after the
liberalisation of trade: Mongolia signed
the trade agreements with 79 countries.48
Moreover, in 1998, the Parliament of
Mongolia adopted the fundamental
principles such as the Foreign Policy
Concept and Legal Reform Policy and
in which a private international law was
guaranteed as the subject under these
concepts.
Although Mongolia has adopted
many concepts and laws, in reality,
today the situation of interpreting the
international commercial laws and relevant
conventions particularly the CISG is still
not acceptable in Mongolia.49 This is the
fact that the Mongolian legal community
does not sufficiently know of the CISG
even after 15 years since the Convention
became effective on January 1999.50 As
46
Trade Policy Review report by Mongolia, available at:
http://www.wto.org/english/tratop_e/tpr_e/g297_e.pdf, last
visited 15 Jan 2017.
47
Odgerel Tseveen & Batsetseg Ganbold,’The Mongolian
Legal System and Laws: a Brief Overview’, available at
http://www.nyulawglobal.org/globalex/mongolia.htm.
48
Mongolia’s International Law, available at: http://mad-re-
search.com/mongolia/overview-of-the-legal-system/interna-
tional-law/.
49
Demberel S,’ Mongolian National arbitration-Develop-
ment and Further Trend’, reported in the Conference of
‘Mongolian National Arbitration and Further Trend” pub-
lished in the ‘Journal of Arbitration and Business Laws’ Vol
2(07) 2005,[ translation of author]. Available in Mongolian
language: http://www.mongolchamber.mn/attachments/arti-
cle/862/Setguuliin_Vol_2.pdf.
50
http://www.cisg.law.pace.edu/cisg/countries/cntries-Mon-
golia.html.
148
2017 5(65)
evidence thereof, there is not a single
court case that has applied the CISG in
Mongolia.51 To be fair, the case reporting
system is in its infancy and some positive
signs have emerged, such as posting the
court’s decision online for the last 3 years.
Moreover, there are very few authors
who discussed the implementation of the
CISG in Mongolia, and it is difficult to find
published articles and textbook, which
researched or reported on the CISG, in
the Mongolian language.52 Mongolia has
not adopted anything like China’s Contract
Law as the governing law in international
sale of goods, with the exception of certain
aspects of Civil Code of Mongolia 2002
and Law of Mongolia Civil Procedure
Code 2002.53
In the respect of the historical
background of the CISG in Mongolia
the Arbitration Mongolia’s is relevant to
discuss within the research because
accordance with the private international
law is bound up in the arbitration laws and
procedures.54 Due to a high proportion of
all negotiated international sales contracts
containing an arbitration clause thus
arbitration is relevant to the CISG.55 In
addition, merchants prefer arbitration as
an alternative form of dispute resolution
to settle their conflicts because of the
time efficiency and confidentiality of the
procedure.56
In May of 2003, The Mongolian
parliament adopted the Law of Mongolia
on Arbitration based on the UNCITRAL
Model law on International Commercial
Arbitration.57 This law aims to regulate
51
Ñonversation to the Director of the Research Institute of
the Supreme Court of Mongolia, on 23 Jan 2017.
52
One of very few books published as Mendsaikhan Tu-
menjargal, Private International Law, (Mongolian National
Legal Research Centre Press, 2008) Ulaanbaatar.
53
The Comparative curriculum study of several law schools
such as Law Enforcement University and Shikhikhutug Law
School, and National University.
54
Ibid.
55
See at: http://www.cisg.law.pace.edu/cisg/cisgintro.html.
56
Luca, above, n 10.
57
World Intellectual Property Organization, available at
http://www.wipo.int/wipolex/en/details.jsp?id=6645.

arbitrage proceedings of disputes over
property and non-property rights between
legal entities.58 In accordance with the
2003 Law of Mongolia on Arbitration,
the alternative arbitration system was
accepted launching 21 branches in local
districts however, there are still some
arguments about whether those arbitration
cases are useful or not.59
About 70% of all cases that brought
before the Mongolian International and
National Arbitration Centre involved the
disputes of international sale of goods.60
Nonetheless, in 2003 only one case 61
was settled by the arbitration applying
the CISG. In that case, a seller was from
China and a buyer was from Mongolia
and both parties consented applying the
CISG in the contact. Thankfully, in 2003,
by the time when that case was brought
before Mongolian arbitration, the training
of the CISG was organised among the
arbitrators by the UNCITRAL enabling
the case to apply the CISG.62 Hence, the
necessity of recognition and awareness
of application the CISG among Mongolian
legal community is inevitable but there is
a lack incentive to apply the CISG among
the judges and attorneys.
A further complication is, many in the
legal profession may avoid referring to the
CISG. An email survey of five arbitrators
suggested that the governing law is the
most challenging because Mongolia has
no precedent and there is no contract law,
particularly in regard to sales contracts,
and they face problems with language
barriers and finding official sources for the
interpretations.63
There are also burdensome issues
of the arbitration in Mongolia particularly
58
Law on Arbitration of Mongolia, General Provisions’ Ar-
ticle 1.
59
Demberel, above,n.
60
Demberel above, n 43.
61
That case could not be analysed more-in depth due to
the confidentiality.
62
Mensaikhan, above n.
63
Survey was done by the author in Jan 2017, by email ask-
ing 5 questions.
149
International Experience
confidentiality of arbitral proceedings.
There are not any rules under the Law of
Mongolia on Arbitration 2003 with regards
to confidentiality for parties and arbitrators
involved in the arbitration.64 Due to this, the
Foreign Trade Arbitration Law of Mongolia
1995 article 13.1 dictates that the arbitral
hearing shall be conducted in an open
session. However, the confidentiality
problem still existing and has not been
resolved and-should be revised urgently.
According to the Mongolian
arbitration statistics, 280 cases brought
to the arbitration court between 2005 and
2016, among them 86 cases were claimed
sale of goods disputes.65 The number
of the cases tends to increase yearly
and in most cases (approximately 80%)
Mongolians were litigants. Therefore, this
means that in those cases Mongolian law
was chosen as the governing law.
In accordance with the Civil Code of
Mongolia 2002, contractors choose the
foreign law as the governing law. Provision
549.1 of Civil Code of Mongolia 2002
states that the right of and obligations of
parties to contract, content of contract,
fulfilment of obligation, termination or
revocation, implementation of duties
under contract or failure shall be regulated
by the law of any country designated by
the parties to the contracts.66
Moreover, provision 549.4 indicates
that in sale’s contract the seller’s law
would be chosen if the parties did not
choose the governing law.67 Also, choice
of law in cases of conflict is regulated
under provision 548 of the Civil Code
2002.
Mongolian International and National
Arbitration Centre mainly focuses on
the development of the arbitration by
64
Altantsetseg above,n.
65
Mongolian International and National Arbitration Centre
(MINAC) at the Mongolian National Chamber of Commerce
and Industry http://en.mongolchamber.mn/index.php/de-
partments-divisions/126-2011-12-21-114136.
66
Civil Code of Mongolia 2002, http://www.wipo.int/wipolex/
en/text.jsp?file_id=183496.
67
Civil Code of Mongolia.
LAW REVIEW
organising multiple training sessions to
prepare the arbitrators who accept the
need to apply the CISG in arbitration
cases.68 Furthermore, they are planning
to establish the tradition and practice
to apply not only the CISG but also
other Conventions among the legal
professionals by officially interpreting
them into Mongolian language with the
assistance of governmental organisations
and other legal institutions such as
National Legal Institution of Mongolia to
conduct legal research in this framework.69
68
Email from Gunjdagva- General Secretary of the Mongo-
lian International and National Arbitration Centre
69
Demberel S,’ Mongolian National arbitration-Development
and Further Trend’, reported in the Conference of ‘Mongo-
lian National Arbitration and Further Trend” published in the
‘The Arbitration and Business Law’ National Arbitration Jour-
nal,Vol 2(07) 2005, translation of author. Available in Mongo-
lian language: http://www.mongolchamber.mn/attachments/
article/862/Setguuliin_Vol_2.pdf.
---o0o---
150
2017 5(65)
CONCLUSION
The United Nations Convention on
the Sale of Goods (CISG) is considered
one of the most successful Conventions
through the world. However, there are
some issues on its implementation
especially in Asian region, therefore the
research paper attempted to investigate
the challenges for the further successful
development of the CISG.
The settlement history of the
Convention is similar in some Asian states
such as Korea, Japan and Mongolia
however China is stepping further than
others regarding the legal environment
that has the governing law in sales contract
and arbitration cases applying the CISG.
To this end, Mongolia’s trade relations
and policy to maintain the international
sale of goods it needs to enhance not only
the legal environment and education but
also to support the infrastructure of the
external trade that apply the CISG.
 International Experience

К ВОПРОСУ О СВОЙСТВАХ ДОКАЗАТЕЛЬСТВ В

УГОЛОВНОМ СУДОПРОИЗВОДСТВЕ РОССИИ

Äоказывани–это урåгулированнаÿ
законом дåÿтåльность по собираниþ,
исслåдованиþ, провåркå и оцåнкå
доказатåльств.
 процåссå доказываниÿ всå
доказатåльства исслåдуþтсÿ, а
впослåдствии и оцåниваþтсÿ в свåтå их
соотвåтствиÿ свойствам доказатåльств.
Þридичåскиå свойства доказатåльств –
Брянская Елена Васильевна – это нåобходимыå признаки, отсутствиå
кандидат юридических наук, доцент, которых нå позволÿåт использовать их
доцент кафедры судебного права в этом качåствå [5, с. 133].
Юридического института Иркутского
государственного университета Êаждоå доказатåльство подлåжит
исслåдованиþ и оцåнкå с точки
зрåниÿ относимости, допустимости,
ÀÍÍÎÒÀÖÈß достовåрности, а всå собранныå
вопросы доказываниÿ по доказатåльства в совокупности –
уголовному дåлу составлÿþт ÿдро всåго достаточности длÿ разрåшåниÿ
óãîëîâíîãî ïðîöåññà. Ôàêòè÷åñêè ëþáîé уголовного дåла.
институт уголовного судопроизводства
имååт прÿмоå отношåниå к вопросам Ïри исслåдовании и оцåнкå
тåории доказатåльств. Âажнåйшим доказатåльств нåдопустимо условноå
этапом процåсса доказываниÿ их дåлåниå на лучшиå и худшиå,
ÿвлÿåтсÿ исслåдованиå доказатåльств. напримåр, в зависимости от их источника
 частности, на данном этапå и лþбых других обстоÿтåльств. Íåльзÿ,
доказатåльства исслåдуþтсÿ на напримåр, полагатьсÿ на заклþчåниå
прåдмåт их свойств: относимости, авторитåтного экспåрта как на лучшåå
допустимости, достаточности, из всåх доказатåльств, хотÿ этот вид
достовåрности и их взаимосвÿзи. доказатåльств в отличиå от других
Âопрос о свойствах доказатåльств основываåтсÿ на достижåниÿх науки.
ÿвлÿåтсÿ основополагаþùим при Заклþчåниå экспåрта нå ÿвлÿåтсÿ
рåшåнии вопроса их итоговой оцåнки, в обÿзатåльным длÿ суда, однако
этой свÿзи, нам видитсÿ нåобходимым нåсогласиå их с заклþчåниåм должно
проанализировать данный вопрос. áûòü ìîòèâèðîâàíî [2, ñ. 45].
Äоказатåльства исслåдуþтсÿ
ÊËÞ×ÅÂÛÅ ÑËÎÂÀ и оцåниваþтсÿ судьåй нå просто в
доказатåльства, процåсс хаотичной совокупности. Матåриалы
доказываниÿ, оцåнка доказатåльств, уголовного дåла имåþт опрåдåлåннуþ
свойства доказатåльств, относимость, упорÿдочåнность. Êромå того,
допустимость, достаточность, доказатåльства подвåргаþтсÿ
достовåрность, взаимосвÿзь, своåму исслåдованиþ, провåркå и
косвåнныå доказатåльства. оцåнкå в отдåльности, а потом ужå

151
LAW REVIEW 2017 5(65)

в своåй логичной совокупности. Íа «âçàèìîñâÿçü», ïðè îöåíêå «óùåðáíîãî

прåдмåт относимости, допустимости äîêàçàòåëüñòâà» ìû ó÷èòûâàåì
и достовåрности доказатåльство причиннуþ свÿзь мåжду провåдåнным
исслåдуåтсÿ в отдåльности, на прåдмåт слåдствåнным дåйствиåм, åго
достаточности в совокупности всåх законностьþ и итогом, получåнным
доказатåльств по уголовному дåлу. рåзультатом такого дåйствиÿ.
 свÿзи с этим нам видитсÿ Âзаимосвÿзь ÿвлÿåтсÿ
åùå одно свойство доказатåльств, самостоÿтåльным свойством при
котороå имååт важноå процåссуальноå оцåнкå косвåнных доказатåльств.
значåниå, это взаимосвÿзь всåх ×аùå всåго в процåссуальной
доказатåльств по уголовному дåлу. Â þридичåской литåратурå пишут о
обùåпринÿтоå правило о свойствах взаимосвÿзи косвåнных доказатåльств
äîêàçàòåëüñòâ «òðè Ä è îäíî λ как о цåпи доказатåльств.  основном
нåобходимо вклþчить и взаимосвÿзь. такаÿ позициÿ имååт мåсто в
Âсå доказатåльства должны èíîñòðàííûõ èñòî÷íèêàõ. Îäíàêî
быть взаимообусловлåны. Íаиболåå вåрным будåт утвåрждåниå, что в
наглÿдна взаимосвÿзь доказатåльств одних дåлах, дåйствитåльно, имååтсÿ
в рассмотрåнии такой классиôикации цåпь взаимосвÿзанных мåжду собой
доказатåльств как «пåрвоначальныå и свåдåний о ôактах, а в других –
ïðîèçâîäíûå». Áîëåå òîãî, îöåíèâàòüñÿ совокупность различных и нåзависимых
взаимосвÿзь должна и при признании мåжду собой обстоÿтåльств, которыå
доказатåльств нåдопустимыми. указываþт на один главный ôакт [8, с.
Ïоскольку признаниå 76].
доказатåльств нåдопустимыми влåчåт Íаличиå косвåнных доказатåльств
утрату þридичåской значимости цåлой осложнÿåт процåсс доказываниÿ,
цåпочки доказатåльств в силу их поскольку сначала нåобходимо
взаимосвÿзи, пороþ мы можåм судить достигнуть достовåрности знаниÿ о так
о нåсостоÿтåльности цåлого эпизода по называåмых промåжуточных ôактах,
уголовному дåлу. а затåм на их основå дåлать вывод о
Ñудåбнаÿ практика пошла по ñâÿçè ñ ãëàâíûì ôàêòîì [6, ñ. 114].
пути, прåдложåнному Ï.À. Ëупинской, Ïåрвуþ взаимосвÿзь учåныå
до сих пор актуальны идåи «чаÿ описываþт чåрåз классичåскоå
è ÷åðíèëà» (ëîæêà ÷åðíèë ïîðòèò сравнåниå с цåпьþ, гдå каждоå свåдåниå
ñòàêàí ÷àÿ) è «ðàçáèòîãî çåðêàëà» – это звåно этой цåпи. Âторуþ в англо-
(åсли зåркало разбилось, посмотрим, амåриканской литåратурå и практикå
что отражаåтсÿ в åго кусочкå) – ñðàâíèâàþò ñ êàíàòîì, ñïëåò¸ííûì èç
судьи прåдпочитаþт пåрвуþ идåþ. различных нитåй-обстоÿтåльств [8, с.
 трудах Ï. À. Ëупинской можно 76].
встрåтить и такой вид доказатåльств, Î âçàèìîñâÿçè äîêàçàòåëüñòâ
как уùåрбноå доказатåльство: мы можåм говорить, когда
«Ïротокол осмотра жилиùа, в ходå оцåниваåм показаниÿ подсудимого
которого были провåдåны дåйствиÿ, и сопоставлÿåм получåнныå данныå
допустимыå только при обыскå, с åго характåристиками. Ïри
можåт, однако, использоватьсÿ в той оцåнкå получåнной инôормации мы
åго части, котораÿ ôиксируåт вид, понимаåм косвåнность данных о
размåры жилиùа, расположåниå в нåм личности к прåдмåту показаний и тåм
ïðåäìåòîâ íà ìîìåíò îñìîòðà» [7, c болåå к прåдмåту доказываниÿ по
13]. Â данном примåрå мы наблþдаåм óãîëîâíîìó äåëó. Îäíàêî, ïîñðåäñòâîì
важноå свойство доказатåльств
152
 International Experience

получåниÿ такой инôормации и способами åго исслåдованиÿ, напримåр,

оцåнкå их в совокупности, с учåтом это можåт быть обзор вåùåствåнных
рåпутации, прошлого, ôизичåских доказатåльств судом, прåдúÿвлåниå
и интåллåктуальных качåства суд вåùåствåнных доказатåльств длÿ
можåт болåå обúåктивно, правильно ознакомлåниÿ участникам уголовного
оцåнить способности [1, с. 163], к судопроизводств, обúÿвлåниå
примåру, правдиво излагать ôакты содåржаниÿ протокола осмотра
по дåлу. Âзаимосвÿзь показаний и вåùåствåнного доказатåльства в
характåристик личности подсудимого ñóäåáíîì çàñåäàíèè; âîñïðîèçâåäåíèå
можåт позволить суду убåдитьсÿ в видåо- или аудиозаписи, их
достовåрности или нåдостовåрности дåмонстрациÿ.
данных показаний. Â этой свÿзи Ñвой вывод мы считаåм
вполнå рåзонно правопримåнитåлÿм правильным подкрåпить мнåниåм
оцåнивать доказатåльства с позиции их проôåссора Ã.È. Загорского,
взаимосвÿзи. который справåдливо полагаåт:
Èнтåрåс прåдставлÿåт свÿзь «анализ доказатåльств прåдполагаåт
вåùåствåнного доказатåльства такоå их изложåниå, чтобы была
и заклþчåниÿ экспåрта, котораÿ видна логичåскаÿ свÿзь мåжду ними
выражаåтсÿ чåрåз матåриальный и доказываåмыми обстоÿтåльствами
обúåкт, когда одни åго свойства совåршåнного прåступлåниÿ. Ñлåдуåт
составÿт содåржаниå вåùåствåнного провåсти группировку доказатåльств
доказатåльства, а другиå – исходÿ из потрåбностåй доказываниÿ.
содåржаниå заклþчåниÿ экспåрта. Äоказатåльства должны быть свÿзаны
 этой свÿзи Â.ß. Äорохов åùå в мåжду собой, так как нåрåдко они
1971 году писал, что свÿзи мåжду äîïîëíÿþò äðóã äðóãà» [9, ñ. 139].
этими доказатåльствами приобрåтут Áолåå того, каждоå доказатåльство
иной характåр и значåниå, åсли при имååт своþ внутрåннþþ структуру,
сопоставлåнии заклþчåниÿ экспåрта котораÿ познаåтсÿ в свåтå синтåза
с вåùåствåнным доказатåльством всåх структурных составлÿþùих
исходить из того, что содåржаниå элåмåнтов, которыå исслåдуþтсÿ в
вåùåствåнного доказатåльства их взаимосвÿзи. Íапримåр, послå
составлÿþт всå имåþùиå отношåниå провåдåниÿ допроса слåдоватåлåм
к дåлу свойства прåдмåта. Ïри таком он анализируåт показаниÿ, послå
условии вåùåствåнноå доказатåльство анализа доказатåльство вновь
тåрÿåт самостоÿтåльноå значåниå, должно быть исслåдовано, но ужå при
поскольку в силу нåобходимости соåдинåнии в åдиноå цåлоå всåх åго
провåдåниÿ экспåртизы, оно ставитсÿ отдåльных сторон и с учåтом присуùих
в зависимость от заклþчåниÿ экспåрта им признаков и особåнностåй,
[4, ñ. 113]. Ïî íàøåìó ìíåíèþ, íå ñòîèò выÿвлåнных в ходå анализа. Знаниå
свÿзь данных источников доказатåльств о свÿзÿх, отношåниÿх и зависимостÿх,
сводить к вопросу поглоùåниÿ одного суùåствуþùих мåжду различными
доказатåльства другим. Â такой сторонами доказатåльства, как
ситуации наблþдаåтсÿ взаимосвÿзь отражåниå свÿзåй, сторон, отношåний
двух самостоÿтåльных источников обстоÿтåльств и ôактов, составлÿþùих
доказатåльств. Èсслåдованиå åго содåржаниå, условий их восприÿтиÿ,
вåùåствåнного доказатåльства нå ôизичåских и иных особåнностåй
ограничиваåтсÿ только заклþчåниåм источника доказатåльства, характåра
экспåрта. Ñамостоÿтåльность данного и содåржаниÿ обùåствåнных
источника подтвåрждаåтсÿ и другими отношåний, участиå в которых

153
LAW REVIEW
породило знаниå лицом относимых
к дåлу свåдåний, можåт быть получåно
только путåм синтåза [3, с. 27].
Ñлåдоватåль исслåдуåт и анализируåт
получåнноå доказатåльство и в
аспåктå взаимосвÿзи, синтåза åго
составлÿþùих элåмåнтов и с позиции
взаимосвÿзи с другими источниками
доказатåльств, сопоставлÿåт их на
прåдмåт соотвåтствиÿ свойствам.
 дальнåйшåм судьÿ исслåдуåт
доказатåльства в судåбном засåдании.
Íа основании исслåдованиÿ, в имåþùåå силу прÿмого доказатåльства,
свåтå внутрåннåго убåждåниÿ, судьÿ
оцåниваåт доказатåльства. Íаиболåå
убåдитåльныå закладываåт в основу
обвинитåльного или оправдатåльного
приговора.
Èсслåдованиå доказатåльств
ÿвлÿåтсÿ основой грамотной
аргумåнтации по уголовному дåлу
в судå. Èмåнно такоå свойство
доказатåльств, как взаимосвÿзь,
позволÿåт наиболåå аргумåнтированно
прåдставить доказатåльства сторонами
при производствå по уголовному
дåлу. Ñитуациÿ заклþчаåтсÿ в том,
что так или иначå, но на уровнå
внутрåннåго убåждåниÿ судьи,
отдåльныå доказатåльства обладаþт
большåй аргумåнтируþùåй силой,
чåм другиå. Íапримåр, доказатåльства,
признанныå нåдопустимыми,
исклþчаþтсÿ и нå имåþт þридичåской
силы. То åсть, åсли доказатåльства,
получåнныå в соотвåтствии с законом,
обладаþт свойством допустимости,
то у получåнных с нарушåниÿми
положåний закона доказатåльств
данного свойства, соотвåтствåнно,
íåò. Îá ýòîì îäíîçíà÷íî íàïèñàíî â
ÓÏÊ ÐÔ: äîêàçàòåëüñòâà, ïîëó÷åííûå
с нарушåниåм трåбований настоÿùåго
Êодåкса, ÿвлÿþтсÿ нåдопустимыми.
Такжå уточнÿåтсÿ, что нåдопустимыå
доказатåльства нå имåþт þридичåской
силы и нå могут быть положåны в основу
обвинåниÿ, и использоватьсÿ длÿ
доказываниÿ лþбого из обстоÿтåльств,
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2017 5(65)
ïðåäóñìîòðåííûõ ñò. 73 ÓÏÊ ÐÔ (÷. 1 ñò.
75 ÓÏÊ ÐÔ).
Îäíàêî äàëåêî íå êàæäîå
доказатåльство, обладаþùåå
всåми установлåнными законом
þридичåскими свойствами,
способно имåть þридичåскуþ
силу и использоватьсÿ в качåствå
процåссуального срåдства
доказываниÿ. Â практичåской
дåÿтåльности судåй пороþ бываþт
такиå ситуации, что доказатåльство,
нå всåгда имååт убåждаþùåå
воздåйствиå. Ïоэтому мы можåм
полагать, что помимо таких свойств
или признаков доказатåльств,
как относимость, допустимость,
достаточность, достовåрность, можно
и нужно при оцåнкå доказатåльств их
взаимосвÿзи и совокупности, понимать
и учитывать их аргумåнтированность.
Àнализ судåбной практики и
Ïостановлåний Êонституционного Ñуда
ÐÔ ïîçâîëÿþò ñäåëàòü âûâîä î òîì, ÷òî
судьи тåм или иным доказатåльствам
придаþт особåннуþ значимость, чåм
и прåдопрåдåлÿåтсÿ их þридичåскаÿ
сила. Íапримåр, в Ïостановлåнии
Êîíñòèòóöèîííîãî Ñóäà ÐÔ îò 8
дåкабрÿ 2003 г. ¹ 18-Ï закрåплåно:
отказ государствåнного обвинитåлÿ
от обвинåниÿ либо измåнåниå им
обвинåниÿ в сторону смÿгчåниÿ, так
и принÿтиå судом соотвåтствуþùåго
рåшåниÿ могут имåть мåсто лишь по
завåршåнии исслåдованиÿ значимых
длÿ такого рода рåшåний матåриалов
дåла. Мы полагаåм, что значимость
матåриалов уголовного дåла, которыå
выступаþт в качåствå взаимосвÿзанных,
совокупных доказатåльств, и
прåдопрåдåлÿåт силу аргумåнта в том
или ином процåссуальном вопросå.
Ïоскольку концåпциÿ уголовного
ñóäîïðîèçâîäñòâà Ðîññèè îñíîâàíà
на принципå состÿзатåльности, в этой
свÿзи приобрåтаåт особуþ значимость
активность сторон при расслåдовании

и рассмотрåнии уголовного дåла.
Äумаåтсÿ, что на основå получåнной
инôормации в процåссå познаниÿ,
исслåдованиÿ и оцåнки доказатåльств,
стороны, с помоùьþ активной
мыслитåльной дåÿтåльности, пытаþтсÿ
повлиÿть на внутрåннåå убåждåниå
судьи, посрåдством прåдоставлåниÿ
доказатåльств в видå взаимосвÿзанных
элåмåнтов, которыå приобрåтаþт силу
аргумåнта правоты. Â этой свÿзи всå
наибольшуþ актуальность приобрåтаåт
тåориÿ аргумåнтации, котораÿ
позволÿåт нам судить об опрåдåлåнной
þридичåской силå доказатåльств –
аргумåнтируþùåй силå.
Êаждаÿ из сторон прåдставлÿåт
суду доказатåльства виновности или
нåвиновности подсудимого, а суд,
оцåниваÿ их в совокупности, выносит
приговор. Ïоскольку в судåбном
разбиратåльствå схåму отношåний
судьи и сторон можно прåдставить
в видå трåугольника, вåршину этого
трåугольника занимаåт судьÿ. Ñудьÿ –
это цåнтр и источник власти во врåмÿ
разбиратåльства уголовного дåла по
суùåству.
Ñуд играåт рåшаþùуþ роль в
постановлåнии приговора по уголовным
äåëàì. Îí îáÿçàí èñïîëüçîâàòü
вåсь арсåнал срåдств доказываниÿ,
ïðåäóñìîòðåííûõ ÓÏÊ ÐÔ, äëÿ
ôормированиÿ доказатåльствåнной
основы, котораÿ позволит åму по
своåму внутрåннåму убåждåниþ
принÿть законноå, обоснованноå и
справåдливоå рåшåниå по уголовному
дåлу. Ïоскольку доказываниå – это
урåгулированнаÿ законом дåÿтåльность
по собираниþ, исслåдованиþ и стоит доказатåльства априорно дåлить
оцåнкå доказатåльств, то всå эти
этапы прåдставлÿþт мыслитåльнуþ
дåÿтåльность, а длÿ судьи особåнно
важны такиå этапы, как исслåдованиå
и оцåнка доказатåльств, котораÿ
осуùåствлÿåтсÿ в логичåских ôормах
при соблþдåнии научной мåтодологии
познаниÿ и, как мы полагаåм, в свåтå
активной дåÿтåльности сторон.
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International Experience
 процåссå исслåдованиÿ и
оцåнки доказатåльств по уголовному
дåлу рåшаþтсÿ вопрос пригодности
получåнных данных и привлåчåниå
их к уголовному дåлу в качåствå
доказатåльств. Ïри рåшåнии
вопроса о качåствå доказатåльств
рассматриваåтсÿ их ôорма и
содåржатåльнаÿ часть и взаимосвÿзь,
сотвåтствиå одних доказатåльств
другим.
 рåзультатå исслåдованиÿ
доказатåльств судьÿ оцåниваåт
доказатåльства, опрåдåлÿåт, насколько
точно установлåно каждоå из них, в
какой взаимосвÿзи с дåлом и другими
доказатåльствами оно находитсÿ, какой
имåнно ôакт, имåþùий значåниå длÿ
уголовного дåла, оно устанавливаåт
или опровåргаåт и что означаþт в
совокупности всå собранныå по дåлу
доказатåльства.
Èсслåдованиå и оцåнка
доказатåльств судьåй – это
умствåнный процåсс, акт мысли по
сопоставлåниþ доказатåльств. Â
уголовном судопроизводствå познаниå,
оцåнка доказатåльств производитсÿ
по посрåдством мыслитåльной
дåÿтåльности судьи, котораÿ
впослåдствии ôормируåт внутрåннåå
убåждåниå судьи, основанному на
всåстороннåм, полном и обúåктивном
рассмотрåнии доказатåльств. Ïри этом
в законå нå указываþтсÿ ôормальныå
условиÿ, которыå заранåå опрåдåлÿли
бы цåнность и значåниå каждого
доказатåльства в отдåльности и их
совокупности.
Èнтåрåс прåдставлÿåт то, что нå
на лучшиå и худшиå в зависимости
от источника ôактичåских данных и
лþбых других обстоÿтåльств. Íåльзÿ,
напримåр, полагатьсÿ на заклþчåниå
авторитåтного экспåрта как на лучшåå
из всåх доказатåльств, хотÿ этот вид
ôактичåских данных в отличиå от
других основываåтсÿ на достижåниÿх
науки.
LAW REVIEW 2017 5(65)

обùåизвåстным ôактом ÿвлÿåтсÿ убåдить суд в своåй правотå, в

то, что одной из характåрных чåрт правильности своих выводов.
состÿзатåльного типа уголовного
процåсса ÿвлÿåтсÿ такой этап судåбного
Íа основании изложåнного
разбиратåльства, как прåниÿ участников
мы полагаåм, что взаимосвÿзь
со стороны заùиты и обвинåниÿ.
доказатåльств, это их самостоÿтåльноå
Èмåнно в прåниÿх сторон наиболåå
свойство, котороå позволÿåт судить
ÿрко проÿвлÿåтсÿ процåсс убåждåниÿ,
о зависимости и подтвåрждåнии
аргумåнтации, в частности, стороны
одних доказатåльств другими, при
посрåдством исслåдованиÿ и оцåнки
сопоставлåнии которых и дополнåнии
доказатåльств убåждаþт суд в своåй
одних другими мы можåм говорить
правотå. Íаиболåå сильныå аргумåнты
об их истинности. Âзаимосвÿзь
закладываþтсÿ в основу рåчåй сторон.
доказатåльств, это такоå свойство,
 своих выступлåниÿх заùитник,
котороå позволÿåт убåдитьсÿ судьå
прокурор излагаþт свои соображåниÿ,
в своåм выводå об относимости,
выводы, сôормированныå в процåссå
допустимости, достаточности и
исслåдованиÿ доказатåльств по
достовåрности доказатåльств по
уголовному дåлу, а такжå стрåмÿтсÿ
уголовному дåлу.

---o0o---

156

A BRIEF OVERVIEW OF JUDICIAL SYSTEM OF
THE UNITED STATES AND THE SUPREME
COURT OF INDIANA
Suvd Tuul (LL.M), Paralegal at
GTs Advocates LLP 1
1. The U.S. Judicial System in
General
Because of the federalism in the
U.S., there are two kinds of courts state
and federal court. The Federal court
system has 3 court levels, similar to the
state court, consisting of a Trial Court, a
Court of Appeals and a Supreme Court.
These courts deal with cases of diversity
and federal question jurisdictions2 which
the U.S. Constitution gave a power to
them to decide. However, the state courts
have a general jurisdiction over almost
all of the cases, which do not fall under
federal court jurisdiction.
If it is necessary, statute can stablish
specialized courts. For example, there is
a Bankruptcy court in the Federal court
system that deals with cases arising
out of Federal Bankruptcy Code with its
supplemental issues. Also, Indiana has
1
Because each state has a different jurisdiction and different
regulation, I chose to cover only the U.S. Supreme Court
and Indiana Supreme Court in this article.
2
“Diversity jurisdiction” is a federal court’s exercise of
authority over a case involving parties who are citizens of
different states and an amount in controversy greater than
$75,000 (Black’s Law Dictionary (10th ed. 2014)); “Federal
question jurisdiction” is the exercise of federal-court pow-
er over claims arising under the U.S. Constitution, an act
of Congress, or a treaty (Black’s Law Dictionary (10th ed.
2014)).
157
International Experience
a Tax court specializing in tax cases of
Indiana, and 6 specialized commercial
courts3. For example, the State of
Delaware is popular with its business
friendly corporate laws and most of
big corporations choose Delaware to
incorporate. That’s why it has a specialized
court called the Delaware Court of
Chancery, which is widely recognized
as the nation’s preeminent forum for the
determination of disputes involving the
internal affairs of the thousands upon
thousands of Delaware corporations and
other business entities through which a
vast amount of the world’s commercial
affairs is conducted.4
Generally, trial courts in the U.S.
have a significant distinction that is a jury
system. Litigants have a right to be heard
at a jury trial under the U.S. Constitution.
At the jury trial, a jury issues a verdict and
the court grants its judgment based on the
verdict. However, appellate courts5 are
held without a jury. The theory is that trial
level courts determine both issues of fact
and issues of law. Juries are appropriate
for determinations of fact. Appellate courts
operate only to make determinations of
law and juries are not appropriate for that
purpose. /This is discussed in more detail
in Section 8 below./
The Court of Appeals have a task
to assure that the trial court errors are
corrected. However, the Supreme Court
does not have to review all the cases,
which seek its review. Because, the grant
of transfer to the Supreme Court is a matter
of judicial discretion considering whether
there is Conflict in Court of Appeals’
3
INDIANA’S 6 COMMERCIAL COURTS SET TO BE-
GIN JUNE 1, see http://www.theindianalawyer.com/arti-
cles/39275 ; last visit 12 August 2017.
4
DELEWARE COURT, see http://courts.delaware.gov/
chancery/ ; last visit 30 March 2016.
5
“Appellate courts” means both the Court of Appeals and
the Supreme Court.
LAW REVIEW
Decisions, Conflict with Supreme Court
Decision, Conflict with Federal Appellate
Decision, Undecided Question of Law,
Precedent in Need of Reconsideration
or Significant Departure From Law or
Practice6, in that case, seeking a transfer
to the Supreme Court. For example, most
cases in Indiana are decided by trial
courts. Less than 1% of those cases in the
state are appealed to the Supreme Court.7
During the fiscal year of 2014-2015, the
Court was asked to decide 945 cases.8
It shows that discretion of the Supreme
Court reduces overloading of the court
and maintains the quality of lower courts’
decision.
2. Relationship Between the State
Supreme Court and the U.S. Supreme
Court /Federal Court/
The Federal courts may hear cases
concerning state laws if the issue is
whether the state law violates the U.S.
Constitution which is a federal law.9 The
great example of a relationship between
state and federal court is Obergefell v.
Hodges, 135 S. Ct. 2584 (U.S. Supreme
Court 2015) which was a spotlight topic
of spring 2015. It was a case where a
same-sex couple brought an action to
the federal court alleging that the voter-
approved Michigan Marriage Amendment
(a state law of Michigan), which prohibited
same-sex marriage, violated Equal
Protection and Due Process Clauses
of the U.S. Constitution. And the U.S.
Supreme Court10, Justice Kennedy, held
that the right to marry is a fundamental
right inherent in the liberty of the person,
and under the Due Process and Equal
Protection Clauses of the Fourteenth
Amendment couples of the same-sex
may not be deprived of that right and that
6
Ind. Appellate Rule 57(H): Considerations Governing the
Grant of Transfer.
7
See Indiana Supreme Court, Annual Report 2014-2015,
at. 8 ¶1.
8
Id.
9
FEDERAL v. STATE COURTS – KEAT DIFFERENC-
ES, see http://litigation.findlaw.com/legal-system/feder-
al-vs-state-courts-key-differences.html#sthash.vbO5ptM0.
dpuf; last visit 20 March 2016.
10
“The U.S. Supreme Court” is the federal Supreme Court
which is governed by the U.S. Constitution.
158
2017 5(65)
liberty and states must recognize lawful
same-sex marriages performed in other
states.
The cases the federal courts do
hear, tend more often to be of national
importance and the federal laws they
uphold and the federal rights they protect
extend to everyone in the U.S.11
3. Indiana Supreme Court
The Indiana Supreme Court was
established in 1816 when Indiana became
a state.12 By the new Constitution, adopted
in 1851, and its Amendment, ratified in
1970, the Indiana Supreme Court was
reorganized.13 This is one of the main
differences of state courts as the state law
establishes them compared to the federal
courts that are established under the U.S.
Constitution to decide disputes involving
the Constitution and statutes passed by
Congress.14
The Indiana Supreme Court
exercises appellate jurisdiction but
in particular circumstances, such as
discipline or disbarment of those admitted
to the bar and discipline, removal, and
retirement of justices and judges, it
exercises original jurisdiction.15 Also, the
Indiana Supreme Court interprets a state
law for federal courts on pending cases
that have come before the federal courts
upon their request.16 Otherwise, there is
no abstract interpretation by the court
except in this circumstance. In addition to
this, the Indiana Supreme Court is taking
arguments to schools with a traveling
educational program highlighting how
the judicial process works and providing
lessons on the importance of upholding
11
FEDERAL v. STATE COURTS – KEY DIFFERENC-
ES, see http://litigation.findlaw.com/legal-system/feder-
al-vs-state-courts-key-differences.html#sthash.vbO5ptM0.
dpuf; last visit 20 March 2016.
12
HISTORY AND ORIGINS, see http://www.in.gov/judicia-
ry/supreme/2366.htm; last visit 24 March 2016.
13
Id.
14
FEDERAL v. STATE COURTS – KEY DIFFERENC-
ES, see http://litigation.findlaw.com/legal-system/feder-
al-vs-state-courts-key-differences.html#sthash.vbO5ptM0.
dpuf; last visit 20 March 2016.
15
The Constitution of the State of Indiana §7-4.
16
Indiana Appellate Rule 64: Certified Questions of State
Law From Federal Courts.

the law.17
As for a structure of the Indiana
Supreme Court, it consists of 5 justices
including a Chief justice.18 However, the
number of justices can be up to nine.
They each have their own chamber, which
consists of a legal advisor, a law clerk, and
an administrative assistant. In addition,
a central administration body consisting
of following division serves the Indiana
Supreme Court:
a. The “Division of Supreme Court
Administration” serves the Indiana
Supreme Court by assisting justices with
legal and administrative duties, working
generally at the direction of the Chief
Justice.19
b. The “Division of State
Court Administration” recommends
improvements in court procedures,
administers payroll for judges and
prosecutors, reports caseload and fiscal
information, provides technical support to
all courts and manages the judicial branch
website.20
c. The “Indiana Judicial Center”
provides education and research for
judicial officers.21 And the working group
is researching to establish a Commercial
Court with specialized judges.22
d. The “Indiana State Board of Law
Examiners” is responsible for certifying
that all individuals admitted to practice
law in Indiana satisfying Admission and
Disciplinary Rule.23
e. The “Indiana Supreme Court
Disciplinary Commission” is responsible
for investigating attorney misconduct
and prosecuting lawyer discipline
17
See Indiana Supreme Court, Annual Report 2014-2015,
at 15 ¶1.
18
The Constitution of the State of Indiana §7-2.
19
See Indiana Supreme Court, Annual Report 2014-2015,
at 34 ¶1.
20
Id. at 36 ¶2.
21
Id. at 40 ¶1.
22
See Supreme Court Case No. 94S00-1506-MS-337.
23
See Indiana Supreme Court, Annual Report 2014-2015,
at 44 ¶1.
159
International Experience
proceedings.24
f. The “Indiana Judicial Nominating
Commission” and “the Indiana Commission
on Judicial Qualifications” are established
by the Indiana Constitution and staffed by
the Division of State Court Administration.
The Nominating Commission is
responsible for recruiting and interviewing
applicants to fill vacancies on the appellate
courts. The Qualifications Commission
investigates and prosecutes allegations of
ethical misconduct by judicial officers and
candidates for judicial office.25
g. The “Public Defense Counsel”
provides representation primarily to
incarcerated persons seeking collateral
review of their convictions and sentences.26
4. Indiana Supreme Court
Justices27
Every state develops selection
system of judges such as by appointment
or by election etc. Indiana State has a
merit selection system and the Governor
appoints an individual from three most
qualified candidates chosen by the
“Indiana Judicial Nominating Commission”
when a vacancy occurs on the Indiana
Supreme Court, Court of Appeals, or Tax
Court or other specialized courts.
The Commission first publicly
announces the vacancy and solicits
applications for the position.28 After
selecting appropriate applicants for
further consideration, the Commission
conducts background checks, publicly
interviews the selected candidates, and
deliberates in private about the candidates’
qualifications.29 The Commission then
votes in a public session for the top three
nominees and submits a report to the
24
Id. at 48 ¶1.
25
Id. at 52 ¶1-3.
26
See Indiana Public Defender Commission, Annual Report
2014-2015, at 2.
27
A judge at the Supreme Court in the U.S. is called as a
“Justice”.
28
JUDICIAL NOMINATING COMMISSION FACT SHEET,
see http://www.in.gov/judiciary/jud-qual/2920.htm, last visit
21
March 2016.
29
Indiana Code § 33-27-3.
LAW REVIEW
Governor with a summary of the three
nominee’s qualifications. The Governor
then has 60 days to make the final
appointment.30
In addition to nominating judges
to the Governor, the Indiana Judicial
Nominating Commission also votes to
select Chief Justice.31 The selected Chief
Justice retains that office for a period of
five years, subject to reappointment in the
same manner.32
The Indiana Judicial Nominating
Commission consists of seven members:
three attorney members elected by the
attorneys in their respective districts,
three non-lawyer members appointed
by the Governor, and the Chief Justice
of Indiana or a Justice of the Indiana
Supreme Court whom the Chief Justice
may designate.33 The Chief Justice or
his designee serves as the ex officio34
Chairman of the Commission, and both
attorney and non-lawyer members serve
in three-year staggered term.35
This Commission shall, in addition, be
the commission on judicial qualifications
for the Indiana Supreme Court and
Court of Appeals.36 For example, the
Qualification Commission considered 372
complaints in the fiscal year of 2014-2015,
and dismissed the majority of them but
took action in 22 instances.37
5. Impeachment and Retirement
of the Justices
A justice of the Indiana Supreme
Court or a judge of the Court of appeals
of Indiana or of the Indiana tax court
is subject to removal from office under
Article 7, Section 11 of the Constitution of
30
JUDICIAL NOMINATING COMMISSION FACT SHEET,
see http://www.in.gov/judiciary/jud-qual/2920.htm, last visit
21 March 2016.
31
See Indiana Supreme Court, Annual Report 2014-2015,
at 1 ¶4.
32
The Constitution of the State of Indiana §7-3.
33
Id. §7-9.
34
“Ex Officio” means he/she is not a member at all just
because of his/her office (Black’s Law Dictionary (10th ed.
2014)).
35
The Constitution of the State of Indiana §7-9.
36
Id.
37
Id.
160
2017 5(65)
the State of Indiana.38
Every such justice or judge is
disqualified from acting as a judicial
officer, without loss of salary, while there
is pending (1) an indictment or information
charging him in any court in the United
States with a crime punishable as a felony
under the laws of Indiana or the United
States, or (2) a recommendation to the
Indiana Supreme Court by the commission
on judicial qualifications for his removal or
retirement.39
On recommendation of the
commission on judicial qualifications or
on its own motion, the Indiana Supreme
Court may suspend such justice or judge
from office without salary when in any
court in the United States he pleads
guilty or no contest or is found guilty of
a crime punishable as a felony under
the laws of Indiana or the United States,
or of any other crime that involves moral
turpitude under that law. If his conviction
is reversed, suspension terminates and
he shall be paid his salary for the period
of suspension. If he is suspended and
his conviction becomes final the Indiana
Supreme Court shall remove him from
office.40
Every justice of the Indiana Supreme
Court and judge of the court of appeals
shall retire at seventy-five (75) years of
age. Notwithstanding this, the Indiana
Supreme Court may authorize retired
justices and judges to perform temporary
judicial duties in any state court.41
6. Appellate Process to the
Indiana Supreme Court
The Indiana Supreme Court is the
exclusive interpreter of disputed cases
brought to appeal in criminal appeals
involving the sentence of death or life
without parole, in appeals in which a statute
has been declared unconstitutional, in
appeals involving waiver of parental
38
Indiana Code §5-8-1-1(b): Officers; judges; prosecuting
attorney; liability to impeachment.
39
The Constitution of the State of Indiana §7-11: Tenure of
justices of Supreme Court and judges of the Court of Ap-
peals.
40
Id.
41
Indiana Code §33-38-13-8.

consent to an abortion, and in appeals
involving mandate of funds.42 In addition,
the Indiana Supreme Court may review
the decisions of the Indiana Court of
Appeals and the Indiana Tax Court”43and
Indiana Commercial Court which has just
been established.
The route to the Indiana Supreme
Court begins in the local trial courts44
unless exceptions45 apply. These local
trial courts have what is known as “original
jurisdiction” and this is where the issues
that eventually come to the Indiana
Supreme Court are first tested in either
criminal or civil actions.46 Whenever the
trial court has come to a conclusion on
all the issues in a case, the parties to
the dispute must determine whether they
should accept the decision or exercise
the right to appeal to a higher court (of
course within a limited time specified by
law).47 In all civil cases and all criminal
cases except where a sentence of death
or life without parole has been entered, a
party first appeals to the Indiana Court of
Appeals, or to the Tax Court in tax-related
cases.48 If either party wishes to challenge
the Court of Appeals’ decision, it asks the
Indiana Supreme Court to take the case
by filing a Petition to Transfer Jurisdiction
from the Court of Appeals to the Supreme
Court.49
There are different types of written
documents the parties submit to the
court arguing their side. Indiana Rules
of Appellate Procedure (Ind. Appellate
Rule) Rule 43-48 sets out all of the
specific requirements for these written
42
APPELLATE PROCESS, see http://www.in.gov/judiciary/
supreme/2363.htm; last visit 24 March 2016;
43
Id.
Id.
44
There are a few exceptions to this. One exception is for tax
45
cases. In those cases, decisions of administrative agencies
must be appealed directly to the Tax Court. Another excep-
tion is for cases before the Utility Regulatory Commission,
Civil Rights Commission, Worker Compensation Board, and
Unemployment Compensation Board. In those cases, deci-
sions of administrative agencies must be appealed directly
to the Court of Appeals. Note that decisions of other admin-
istrative agencies are appealed to the trial courts.
46
Id.
47
Id.
48
Id.
49
Id.
161
International Experience
documents. For example, a form of Briefs
and Petitions such as paper size, font and
size, spacing, numbering, margins covers
colors, cover content etc. is specified
in detail. Page limit and word limit vary,
depending on what Brief or Petition it
is, from 10-30 pages and 1,000-14,000
words and it must be indicated in a form of
word count certificate. The arrangement
and content of Briefs are also fixed. For
example, an appellant’s brief shall contain
the following under separate headings:
Table of Contents, Table of Authorities,
Statement of Supreme Court Jurisdiction,
Statement of Issues, Statement of
Case, Statement of Facts, Summary
of Argument, Argument, Conclusion,
Appealed Judgment or Order, Word Count
Certificate, Certificate of Service.
The Supreme Court ‘may’ then
decide to accept the case.50 This is called
“discretionary review,” meaning that the
Supreme Court does not have to accept
all the cases under Indiana Appellate
Rule 4(A)(2). However, the Supreme
Court has a mandatory review over
certain issues such as Criminal Appeals
in which a sentence of death or life
imprisonment without parole is imposed.51
Also, the Supreme Court decides certain
types of cases including, but not limited,
such as professional responsibility52,
as original jurisdiction.53 Moreover, the
Supreme Court can decide direct appeal
cases. “Direct appeal” is an appeal from
a trial court’s decision directly to the
jurisdiction’s highest court, thus bypassing
review by an intermediate appellate court.
Such an appeal may be authorized, for
example, when the case involves the
constitutionality of a state law.54
If it accepts the case (which is called
“granting transfer”), the Supreme Court
will review the documents and records
submitted to the Court of Appeals and may
50
Indiana Appellate Rule 4: Supreme Court Jurisdiction -
Section A. Appellate Jurisdiction.
51
Id.
52
See § 18.Generally, 3 Ind. Law Encyc. Attorney and Client
§ 18.
53
Indiana Appellate Rule 4(B): Other Jurisdiction.
54
Black’s Law Dictionary (10th ed. 2014).
LAW REVIEW
also hear oral arguments on the case.55
Thereafter, the Supreme Court may issue
a written order or opinion that upholds
or overrules the decision of the lower
court and states the reasoning behind its
decision.56 In some cases, it may order a
new trial and provide guidance on how
to avoid the trial error that sparked the
appeal57 This is called “remand.”
7. Oral Hearing at the Indiana
Supreme Court (Indiana Appellate
Rules 52 and 53)
The Court may, in its discretion,
set oral argument on its own or a party’s
motion.58 The Court has decided for now to
set civil cases in which transfer has been
granted for oral argument as a “matter of
course”59.60 Once an oral argument has
been set in the Indiana Court of Appeals,
counsel can call the Court to inquire
who will be sitting on the panel.61 Oral
argument is usually set for twenty (20)
minutes per side that may be extendable
for good cause.
Before commencing the oral
argument, counsel for the parties fills out a
slip identifying counsel so there is no need
to introduce the parties or counsel.62 A
party should expect numerous questions
from the bench63 during oral arguments.
Answers should be given in as brief and
concise a manner as possible, such
as, “Yes, Judge,” or “No, Your Honor.”64
Furthermore, it is not appropriate to direct
questions to the opposing counsel during
55
APPELLATE PROCESS, see http://www.in.gov/judiciary/
supreme/2363.htm; last visit 24 March 2016.
56
Id.
57
Id.
58
See § 2.10. The new Rules—Oral argument, 24 Ind.
Prac., Appellate Procedure § 2.10 (3d ed.), at 1.
59
“As a matter of course” means a something done as a
part of a routine process or procedure. (Black’s Law Dictio-
nary (10th ed. 2014)).
60
See § 2.10. The new Rules—Oral argument, 24 Ind.
Prac., Appellate Procedure § 2.10 (3d ed.), at 1.
61
Id.
62
See § 11.2. Procedures for oral argument, 24 Ind. Prac.,
Appellate Procedure § 11.2 (3d ed.), at 1-2.
63
A “bench” is the raised area occupied by the judge in a
courtroom (Black’s Law Dictionary (10th ed. 2014)).
64
See § 11.2. Procedures for oral argument, 24 Ind. Prac.,
Appellate Procedure § 11.2 (3d ed.), at 1-2.
162
2017 5(65)
argument.65 Attorneys must maintain a
professional standard at all times.66
Oral argument serves many
functions. That’s why oral arguments
are webcast and archived on the court’s
website available to anyone.
If one or more parties fail to appear
at an oral argument, the Court may hear
an argument from the parties who have
appeared, decide the appeal without
oral argument, or reschedule the oral
argument.67 The Court may sanction non-
appearing parties.68
8. Conflict of Laws
The judge must apply appropriate
law to the fact to decide a case. Because
of the federal system in the U.S. where
all states have their own jurisdiction, in
the absence of choice of law provision
between parties, firstly court must decide
what state law or federal law governs this
case. The governing law is a substantive
law including statutes, rules and case law
in itself.
a. Substantive vs. Procedural Law
However, substantive law and
procedural law are different issues. By
contrast to the substantive law, procedural
law is not subject to be determined by
the court or by the parties’ choice of law
provision. The procedural law of the forum,
where the case is pending and going to
be heard, always governs procedural
matters. For example, Indiana law
governs procedural and remedial matters
in actions brought in Indiana courts.69
b. State Law vs. State Law
With respect to matters of a
substantive nature, however, the resolution
of choice-of-law issues depends on the
characterization of the nature of the action
that is determined by a consideration of
such factors as the place of contracting,
the place of contract negotiation, the
65
Id.
66
Id.
67
See § 11.2. Procedures for oral argument, 24 Ind. Prac.,
Appellate Procedure § 11.2 (3d ed.), at 1-2.
68
Id.
69
See § 8. What law governs, 1 Ind. Law Encyc. Action §
8, at 1 ¶1.

place of performance, the location of the
subject matter of the contract, and the
domicile, residence, nationality, place of
incorporation, and place of business of
the parties.70
c. Federal Law vs. State Law
In addition to a conflict of law
between state laws, the judge must also
decide which law to apply to the case,
when the state and federal laws conflict.
Under the Supremacy Clause of the U.S.
Constitution71, generally, the court would
apply the federal law rather than the state
law. But it does not have to be true all the
time depending on the nature of the case.
d. Case Law
The significant difference of common
law from civil law is the power of case
law that can be a legal authority of the
claim. As a precedent, the case law is a
legally binding interpretation of statutes.
Besides its interpreting role, even if there
is no statute regulating certain issues, the
case law will fill the gap in the absence
of statutory regulations. According to the
“stare decisis” doctrine (the doctrine of
precedent), a court must follow earlier
judicial decisions when the same points
arise again in litigation.72 However, it
is not always true. Just as legislators
repeal statutes, the precedents are also
overruled by the court but in very limited
circumstances. The rule of stare decisis
should not be allowed to prevent a court
from overruling a previous decision
ascertained to be wrong.73 Thus, precedent
is not justification for the continuance of
an erroneous practice.74
All Supreme Court opinions shall
be published in the official reporter and
be citable which means the Supreme
Court decisions become a precedent.
The Supreme Court uses its previous
decisions as a precedent. If the Supreme
Court before has not decided such case,
then the Court of Appeal’s decision may
70
See § 8. What law governs, 1 Ind. Law Encyc. Action §
8, at 1 ¶2.
71
The U.S. Constitution § 6.
72
Black’s Law Dictionary (10th ed. 2014).
73
See § 35..Departure from, or overruling of, precedent, 7
Ind. Law Encyc. Courts § 35, at 1 ¶1.
74
Id.
163
International Experience
be cited as a legal authority for the case
within certain limitations. A Court of
Appeals opinion shall be published in the
official reporter and be citable if the case
(1) establishes, modifies, or clarifies a rule
of law; (2) criticizes existing law; or (3)
involves a legal or factual issue of unique
interest or substantial public importance.75
9. The Supreme Court Opinion
a. Standards of Review (Ursula
Bentele, 2012)76:
“… The term “standard of review” is
correctly used only in the appellate context.
One way of looking at the question of what
standard of review will be used on appeal
is to focus on the degree of deference to
be given to the initial decision maker.
• On the question of law, the
decisions of the trial judge are generally
given no deference whatsoever; the
appellate court will determine these issues
de novo, or independently. In de novo
review, the appellate court will address
the issue a new, without regard to how it
was resolved by the trial court.
• On questions of fact, on the other
hand, the decisions of the trial judge and
jury are given considerable deference.
Because the primary function of appellate
courts is a correction of legal error or
development of law in light of changing
conditions. An appellate court is most
likely to reverse a decision if the trial
court made erroneous rulings of law that
may have had a significant impact on the
outcome. Appellate courts are unlikely,
on the other hand, to reverse factual
determinations, especially those made
by a jury, as long as they are made in the
proper legal framework. … The factual
findings of a trial judge conducted without
a jury may not be set on appeal unless
they are “clearly erroneous,” in criminal
cases as well.
75
Indiana Appellate Rule 65(A): Criteria for Publication.
76
See Ursula Bentele, Eve Cary & Mary R. Falk, Appellate
Advocacy: Principles and Practice, LexisNexis 5th Edition, at
109 ¶1-3, at 110 ¶1/4, at 113 ¶2, at 118 ¶3, at 120 ¶3, at 164
¶4, at 165 ¶2, at 179 ¶1, at 184 ¶1.
LAW REVIEW
• An abuse of discretion standard is
when trial judges’ decisions are subject to
reversal only when courts exceed, abuse
or improvidently exercise that discretion
or even fail to exercise discretion at all.
Thus, the way in which an appellate
court will consider the case and make a
decision can depend on the standard of
review. Sometimes an appellate court
will decide a case based on an issue
not raised by the parties but this is not
considered good practice.
b. The Structure of the Court Opinion
The court opinion is a written
statement explaining its decision in a given
case, usually including the statement of
facts, points of law, rationale, and dicta77
with a majority vote of judges considering
a given case. However, the majority
opinion of the Supreme Court becomes
a precedent. A minority opinion, which
is concur or dissent, is always attached
to the majority opinion at the end if any.
Concurring opinion (concur), in a judicial
opinion, that agrees with the judgment
in the case (usually as expressed in the
opinion of another judge), or the opinion
of another judge, but often for different
reasons or through a different line of
reasoning.78 Dissenting opinion (dissent)
is an opinion by one or more judges who
disagree with the decision reached by the
majority.79 The advantage of the minority
opinion, especially when it is published with
the majority opinion, may be to facilitate
77
Black’s Law Dictionary (10th ed. 2014).
78
Black’s Law Dictionary (10th ed. 2014).
79
Id.
---o0o---
164
2017 5(65)
the court to make a better decision, which
can persuade all the judges to come to the
same conclusion with the same reasoning
or to provide grounds to argue a change in
the law in the future.
The court judgment contains case
name “Tom v. Sara”, citation 2015
WL 9197720 which shows where it is
published, court name, date, synopsis
background, holding and opinion which
is drafted by one of the judges in the
tribunal. The opinion consists of facts,
procedural history, discussion, decision
(reverse, remand, affirm), and concur
and/or dissent if any. In addition, the court
resolves attorney fee of the parties. Known
as “American rule” that each party must
bear his/her own attorney’s fees80 but of
course, there are always some exceptions
by precedent and statute.
10. BRIEFLY
For over 200 years, the case law
and legislations have been developed to
promote and secure the impartiality and
independence of the judicial system in
the U.S. Prior to the judicial review has
become established, the federal court
stroke down so many federal statutes that
lead the judicial review to criticism. Over
the years, the court adopted a monitoring
role over government actions striking down
a federal statute only it is unconstitutional
and set out the principles of judicial review
that favor the Rule of Law.
80
Indiana Code §34-52-1-1: General recovery rule.
 A Research Carried out by the National Legal Institute in 2017
SUMMARY OF ASSESSMENT REPORT ON THE
CONSEQUENCES OF IMPLEMENTATION OF LAW ON
NATIONAL HUMAN RIGHTS COMMISSION
The research was conducted
between September 2017 to December
2017 with a team constituted of scientific
researchers Bariashirsuren.J and
Ariunsuren.Kh under guidance from
Scientific Secretary of the NLI, Ph.D.,
Erdem-Undrakh.Kh by the order from the
Ministry of Justice and Internal Affairs of
Mongolia. In this journal, we are only
publishing the summary of this research
and if you would like to review the detailed
report, please contact Legal Research
Center of the institute.
INTRODUCTION
The second chapter of the
Constitutional Law of Mongolia states
that All persons lawfully residing within
Mongolia are equal before the law and the
court and these rights, freedom shall be
valued and not violated upon processing,
approving and implementation activities
of the law; and Item 1 of Article 19 states
that “The State shall be responsible to
the citizens for the creation of economic,
social, legal and other guarantees for
ensuring human rights and freedoms, to
fight against violation of human rights and
freedoms and to restorate of infringed
rights.”, and it complies with the world
standard declared by the International
Human Rights Treaties.
Mongolia joined the UN in 1961 as
a member country and the country has
supported the ideology of common human
rights declarations. Thus Mongolia has
entered and ratified over 40 international
agreements, conventions and their
additional protocols about human rights
since joining International covenant on
Civil and Politics, International Covenant
165
on Economics, Society and Cultural rights
in 1974. As of January 2016, Mongolia has
established 273 multilateral agreements
and 1500 bilateral agreements. It is clearly
seen that Mongolia has implemented
measures to ensure human rights through
legislation especially since the transition
period.
The State Great Khural of Mongolia
has adopted the law on “National Human
Rights Commission” which creates the
legal foundation for operation of National
Institutes for protecting human rights on
December 07, 2000 and it has become
one of the laws which has not made any
significant change for 17 years up until
now. There were total 5 amendments or
changes made to this law in 2002, 2003,
2011 and in 2015 but these amendments,
changes were made in relation to adopting
other laws such as Law on Gender, Law
on Legislation, Criminal and Violation Law.
Although the renewal of Law on
National Human Rights Commission
pursuant to the modern requirements was
initiated for numbers of times but the drafts
are still yet to be adopted. For example,
according to the data we have collected
in the process of this research, there are
total 4 law draft reformed in the past and
these were reformed by the President of
Mongolia and the National Human Rights
Commission . It clearly shows that there is
an unquestionable need for reform of this
law.
Purpose of assessment,
requirement and demand for
assessment
The purpose of assessment on the
consequences of law implementation is
to explore the challenges encountered
LAW REVIEW
during implementation period in the past
and to propose the solutions applicable
for further effective implementation of the
law by determining positive effects and
negative impacts to the society.
Article 5.3.11 of the Chapter of Policy
on Government of the Action program of
the Government of Mongolia for 2016-
2020 states and aims that “Improve
the national system for the protection
of human rights and introduce human
rights standards. It is considered that
there is a need for an assessment on the
consequences of implementation of “Law
on National Human Rights Commission
of Mongolia” which is approved in 2000
on the basis of recognition of importance
of exploring the challenges occurred
in the law enforcement process such
as implemented activities and issued
decision of National Institute to Protect
Human Rights, void space weakening
such actions and decisions and insufficient
accountability system through assessing
the consequences of law implementation
on determining the issues to be regulated
and improved within the framework of
draft law and further law reform.
On top of that, it is required to
comply the Law on National Human
Rights Commission of Mongolia with
obligations and responsibilities held upon
the International Community, especially
with Paris Principles which was adopted
for National Institutes on Human Rights in
1993.
The assessment on the
consequences of law implementation was
performed according to the “Methodology
of the assessment on the consequences
of law implementation” approved as
Appendix No.6 of Resolution No.59 of the
Government of Mongolia in 2016.
Scope and criteria of assessment
We have determined the articles
and items related to the commission,
power of its members and complaint to
the commission which are considered as
166
2017 5(65)
an vital points in terms of content when
implementing the law on “National Human
Rights Commission ”. It includes:
1. Framework of issues related to
the commission and the authority of its
members:
Item 5.1., 5.2., 5.4., 5.6 of Article 5
and Item 6.1 of Article 6 of Chapter Two
of the Law,
Article 13, Article 15, Item 16.1.1-
16.1.8 of Article 16, Item 17.1.1-17.1.5
of Article 17, Item 18.1-18.6 of Article 18,
Item 19.1-19.6 of Article 19, Item 20.1
of Article 20, Item 23.4 of Article 23 of
Chapter Four of this law
2. Framework of issues to be
lodged as complaint to the commission:
Item 9.1-9.4 of Article 9, Item 10.1
of Article 10, Item 11.12 of Article 11 and
Item 12.1-12.3 of Article 12 of Chapter
Three of this law.
The level achieved and compliance
with practice are chosen as the criteria
for the assessment on the consequences
of law implementation within the
framework of determining the indicators
stated in Article 3.1.3 of Methodology on
Assessment on the Consequences of Law
Implementation.
The Paris Principles were defined
at the first International Workshop on
National Institutions for the Promotion
and Protection of Human Rights held
in Paris on 7–9 October 1991. They were
adopted by the United Nations Human
Rights Commission by the UN General
Assembly in its Resolution 48/134 of 1993.
The Paris Principles relate to the status
and functioning of national institutions for
the protection and promotion of human
rights. The Paris Principles requires
that “National Institute must have an
autonomous and independent status not
only formally but also financially to run
wide range of activities close to the public
as well as the composition of the national
institute shall ensure pluralist report.
National Institutes shall respect the law
 A Research Carried out by the National Legal Institute in 2017
and its activities shall be transparent and
fair to protect the human rights, freedom
and law at all times.” These indicators are
the criteria to measure the effectiveness
of the National Institute.
One. Conclusion, assessment
on the scope of issues
related to the commission and power
of its members
1.1. The following conclusions have
been made for the study of Article 5.1, 5.2,
5.4, 5.5, 5.6 of Law on National Human
Rights Commission within the framework
of issues related to the nomination,
appointment and repatriation of the
Commission members. It includes:
As shown in the research result,
the appointment and selection process
of National Institute members for Human
Rights of Mongolia does not comply
with international standards set by Paris
Principles.
It is defined in the International
Standard that:
1/ Announce the vacancy for member
to the public,
2/ Increase the number of candidates
to be nominated from different social
groups,
3/ Assess the candidate according
to the predetermined, realistic and
transparent indicators,
4/ Prioritize the individual knowledge,
skills of the candidate rather the report of
the organization.
As for Mongolia, it is not clear
whether selection and nomination process
of members of the National Human Rights
Commission constitutes independent and
autonomic status. The regulation seems
to be inconsistent with the international
standards from the fact that information
of candidate nominated by the President
of Mongolia, the Parliament and the
Supreme Court is not published for the
public, authorized subject nominates only
one candidate, it causes unavailability for
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selection process, no case the candidate
was not elected as a member, nomination
and appointment process only takes 2-3
days, the Parliament has not once refused
to nominate a candidate and there was no
vote related to the candidate nominated
by the public, civil society organizations.
According to this, nomination of member
of the National Human Rights Commission
is held close within the framework of the
President of Mongolia, the Parliament and
the Supreme Court. It is almost tradition
that commission member elected from the
Parliament becomes the Chairman of the
Commission.
Chairman of the National Human
Rights Commission is selected for 3
year term as suggested by the Speaker
of the Parliament. The system has
potential to be influenced by politics for
its activities and management and create
dependent status; and with this law being
effective for the time being, it creates a
risk for distortion of the purpose of being
independent, individual national institute
to protect human rights.
Article 5.1 of this law states that
“The Speaker of the State Great Hural
(Parliament) shall nominate names
for candidates for Commissioners to
the State Great Hural on the basis of
respective proposals by the President,
the Parliamentary Standing Committee
on Legal Affairs and the Supreme
Court.” It illustrates that the President,
the Parliamentary Standing Committee
and the Supreme Court shall give a
recommendation about the candidate for
member of the National Human Rights
Commission in terms of composition.
While gender equality issues are not
included in the law, gender ratios have
been relatively well-established among
members who have been appointed in
the past. However, only one candidate
is nominated by the Commission as
a nominee, and that gender equality
of the members is to be taken as
incidental. Therefore, it is necessary
LAW REVIEW
to engrain to nominate at least one
male and one female candidate for the
nomination of the Member and to study
the issues constituting the conditions for
implementation.
1.2. The following conclusions have
been made for the study of Article 13.1.1,
13.1.2, 13.1.3, 18.1, 18.5, 18.6 of the Law
on National Human Rights Commission
within the framework of implementation
of counseling rights, recommendation,
counseling of the Commission members.
It includes:
The commission member is
authorized by law to give a recommendation,
suggestion about human rights and
freedom in Mongolia, express suggestion
and recommendations whether any
laws, administrative decisions complies
with common principles of human rights
or not, engage with advisory rights and
give recommendations by the request of
State Great Khural and the Government
or public authority. The fact is pursuant
to the purpose of the law. However, their
right to engage with advisory rights by
the request of State Great Khural and
the Government or public authority does
not become reality in the practice or it is
rare to receive a request to invite them as
consultant or ask for a recommendation
from the State Great Khural and the
Government or any public authority.
Therefore, it is must to issue a right to the
members of the National Human Rights
Commission to involve in such actions by
their own initiative.
Although it is stated in the “National
Program on Human Rights” which was
approved in 1998 that Article 1.1.3.2.3
“Will issue the right to the members of the
National Human Rights Commission to
participate his/her own initiative and inform
his/her suggestion at the discussion of
issues directly related to human rights and
freedom by State Great Khural, Standing
Committees and Government meeting”
but this target still yet to be executed even
until now. Law on the National Human
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2017 5(65)
Rights Commission does not allow its
members to do such actions. That is why
there is a lack of legislative regulatory
to provide rights to the members of the
National Committee for Human Rights to
not only submit written recommendations
but also participate in their own initiative
and inform their suggestion and conclusion
about human rights and freedom at the
State Great Khural assembly and the
Government meeting.
In addition, there is no information
concerning how these recommendations
about human rights and freedoms are
reflected in the draft laws. It is clearly
seen from the research that the effect
of suggestions and recommendations
from the Commission members is
reducing due to the insufficient amount
of implementation works for the issued
resolutions from the Standing Committee
for Law in order to discuss these issues
and ensure the implementation.
The commission has been
regularly executing its duty to provide a
recommendations for the fulfillment of
International Human Right Treaties and
processing a report of the Government
about this fulfillment within the scope
of its resources. But the provisions of
the law may not be fully implemented
in the practice due to the lack of
research, a foundation for processing
a recommendation for national report,
personnal required to scientific work and
budget. Amount of funding allowed from
the State is equivalent to the salaries of
employees working for the Commission
and it is insufficient for scientific researches
throughout country or determining reality
of implementation of human rights. Thus,
we have come to a conclusion that it is
only possible to conduct a research within
the framework of issues that attracts the
society, politics and public attention and
provide data based on the result.
1.3. The following conclusions have
been made for the study of Article 13.2.2
of the Law on National Human Rights
 A Research Carried out by the National Legal Institute in 2017
Commission within the framework of
collaboration with International, Regional
and National Human Rights Institutes. It
includes:
The regulation of collaboration
between the National Human Rights
Commission and other international,
regional and human rights organizations
complies with the purpose to perform and
promote human rights activities. Activities
implemented by the National Human
Rights Commission are pursuant to the
purpose of this article and it is concluded
that compliance of practice is relatively
satisfactory.
Foreign human rights organizations
expressed their initiative and will to
support our institute and it is directly
related to the active cooperation of the
Commission with other international and
regional organizations. In particular, the
Commission only pays its membership
fee to the international organizations and
other costs are insufficient to represent
the country at international level.
1.4. The following conclusions have
been made for the study of Article 13.2.3,
20.1 of the Law on National Human Rights
Commission within the framework of
preparing a report about Human Rights
and Freedom; and report to the State
Great Khural within the first quarter of the
year. It includes:
The National Human Rights
Commission successfully reaching its
purpose to prepare a report about human
rights and freedom in Mongolia to present
to the State Great Khural. However,
its practical importance is relatively
insufficient.
It is regulated under Article 20.1
of the law which states that “The
Commission shall report a report about
human rights and freedom to the State
Great Khural.”. But it creates uncertainty
for report process and we consider that
it is required to make an explanation of
law and organize detailed regulation. For
169
instance, it is required to clarify whether
“Report” means to submit the report to
the Chairman of the State Great Khural
or to have a discussion of the report
by the State Great Khural. Because in
practice, it is often seen from the fact that
above mentioned is illustrated differently
depending on the newly constructing
structure after political changes especially
election. Most recently in 2016, “report”
was a mean of electrical submittance to
the State Great Khural.
Besides, the terms of law and report
process must be clarified in order to
improve the implementations of the laws
and legalize the issues to be discussed
by the Commission, further discussed by
the State Great Khural and issue related
resolutions; and inform the Commission
about the actions and results taken.
1.5. The following conclusions have
been made for the study of Article 13.2.4,
13.2.5 of the Law on National Human
Rights Commission within the framework
of promoting laws and international
treaties about human rights to the public
and support the legal education form the
Commission. It includes:
Although the National Human Rights
Commission aims to reach a purpose
to promote the laws and international
agreements about human rights to the
public but the challenge of implementing
such activities is lack of budget and linkage
to the activities of other organizations with
duty to promote the laws.
It is required to co-ordinate the
activities of similar bodies as a first step
in order to improve the results of work
performed to promote the laws and
international agreements. For example,
the Ministries are obligated to organize
such works for translating and promoting
international agreements relating to their
governance according to the law. At the
same time, the Commission and other law
promoting organizations have the same
obligations as well. But they are missing
the actions to improve the connection
LAW REVIEW
between these organizations. Special
attention is required at policy level to
resolve the translation of international
agreements and conventions and address
the applications of these laws and
agreements to the legal and inspections
authorities.
The Commission took numbers
of measures to educate the citizens
and communities about human rights
and reached certain results. But they
are lacking the regular monitoring,
assessment work for performed actions
within the framework of supporting human
rights educations. It is vital for determining
the sufficient content, method and tools
to reach the expected results for training
and promotions. It is observed that there
is a need to focus more on processing
and implementing the policy about human
rights especially for pre-school education
center and schools and involve press
media into the activities to support human
rights.
Two. Assessment, conclusion
within the framework of issues
to be lodged to the Commission as
complaint
2.1. The following conclusions have
been made for the study of Article 9.1.,
9.2., 9.3., 9.4 of the Law on National
Human Rights Commission within the
framework of issues related to the rights to
lodge a complaint to the Commission from
the citizens and monitoring of complaint.
It includes:
In the case of lodging a complaint
to the Commission, the citizens are only
allowed to lodge them personally or
through representative but they still can’t
lodge them via phone or electronically.
The legal environment does not allow
such action. For studying the practice
implemented in reality, the Commission
accepts the complaints to be lodged via all
means mentioned above from the citizens
and it is necessary to legalize the process
of lodging complaints via phone call and
electronically at the level of evidence.
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In addition, Article 9 of the law
defined wide range of eligible subject to
lodge complaints to the Commission but
legal environment does not allow a child
to address directly to the NHRC on their
behalf. In the recent years, there seems
to be poverty, family violence and use of
alcohol, drug and psychotropic substances
spreading all over the country. It creates
an environment for violation of the rights
of the child. Thus, it is important to study
whether a child raised in such environment
needs to address NHRC through its
guardian or representative. In practice,
the Commission accepts complaints from
the children in its operational process and
take certain measures. Therefore, the
issue needs to be lega lized as well.
In addition, in the case of lodging
complaints, the complaint shall be made
only in Mongolian, in writing or in verbal
form in person. People who does not
speak Mongolian can lodge a complaint in
their mother language but the complaint
shall be translated into Mongolia and
verified in some way. It is required to study
the opportunities to simplify the complaint
lodging process regarding the fact that it
might become a burden, complications
by requiring additional expenses for
translation, interpreter’s costs for those
lodging a complaint in different language
and for disabled person, foreign citizen or
ethnic minorities, it may even cause them
to be not able to enjoy their rights.
2.2. The following conclusion has
been made regarding the implementation
of Article 16.1.2-4, 16.1.8, 18.3, 23.4 of Law
on National Human Rights Commissions
within the framework of Commission’s
activities to collect data during complaint
verification. It includes:
If the Commission considers the
complaints lodged by the citizens requires
the requirements indicated in the law,
then appropriate actions shall be taken.
Regarding this operation, there is a gap
in the law not allowing the Commission
to demand for necessary information, on-
 A Research Carried out by the National Legal Institute in 2017
site visits and contact person-to-person
in the process of verifying the complaint
related to the violation of human rights
and freedom. First of all, it is common
for organizations to be reluctant to give
out information and document, delay
or attempt to delay for any reason. It
is often the case for citizens that they
hide out information about the complaint
or themselves and even, be afraid of
negative consequences that might happen
to them by giving out information. For
these reasons, the implementation of this
provision of the law has become a factor
in slowing down the detection of human
rights violations.
In the process of resolving the
complaints by the Commission, the
Commission demands necessary
information and documents from officials
and organizations mainly by Article
16.1.4 of the Law. However, this right is
regulated only to be within the mandate of
the member and ordinary officer does not
enjoy such rights. For example, the issue
of giving out information only applies if
the Commissioner personally handles
the case and this provision of the law is
implemented through issuing a proxy
to the officer from the Commissioner
on the basis of agreement at the level
of management of law enforcement
authorities in order to keep operation
normal. It is still difficult to implement
the provision upon investigating private
sector companies and demanding proof,
information from them. Therefore, it is
necessary to have legal regulation that
enables the Commission officer to have
access to the building and possibility to
gain information.
2.3. The following conclusion has
been made for the study of Article 12.2,
15.1.2, 17.1.5 of Law on National Human
Rights Commissions within the framework
of regulation for returning the complaint
on the grounds for unreasonable or
inadequate manner.
171
Number of complaints denied due
to be inadequate to the requirement set
in the Article 11 of the law possesses
3% of the total complaints and 4.42
percent of the complaints were returned
for unreasonable grounds. These
percentages do not seem to have an effect
for the provisions to reach its goals. Thus,
the provision of the law is applicable.
2.4. The following conclusion has
been made regarding the implementation
of Article 15.1.3, 15.1.4, 16.1.6 of Law
on National Human Rights Commissions
within the framework of transferring the
complaints according its jurisdiction.
NHRC does not implement the
function of jurisdical organization
according to the public authority
distribution. Therefore, the regulation
under this law regarding the transfer of
criminal and civil disputes to the related
authorities and officers according to the
jurisdiction is in line with its objective and
is applicable. However, it is necessary to
include the submission of the complaint to
the administrative court as an amendment
to the law.
2.5. The following conclusion has
been made regarding the implementation
of Article 18.2, 16.1.7 of Law on National
Human Rights Commission within the
framework of issues to be inquired at
his/her own initiative on the basis of
information with regard to violations of
human rights and freedoms or at the
request of business entities, organizations
or officials. It includes:
Under the provisions of Article
18.2 of the Law, the Commission shall
be able to conduct inquiry alone or with
other organizations or with specialized
inspection authority, prosecutor, court
decision-making body, trade union or non-
governmental organization, without any
problems.
Though there are no case for
inquiries conducted at the request,
order by the organizations based on the
LAW REVIEW
provisions of Article 16.1.7 of this law as
of now. According to current practice,
however no such organization has directly
submitted a request to inquire the other
organizations activities that violates
human rights but there was number of
cases for organizations and citizens to
report about violations of human rights.
The Commission conduct inquiries for the
organization’s activities following such
information.
2.6. The following conclusion has
been made regarding the implementation
of Article 17.1.1 of Law on National
Human Rights Commission within the
framework of issues related to the claim
to be submitted to the court from the
Commission as a representative. It
includes:
NHRC has successfully implemented
activities in the past to compensate the
loss at certain amount and to defend the
victim’s interest at the court through report
and the number of case resolved by the
court for the time is not few. The effort has
shown significant result for the protection
of human rights. But the court only allows
very low percentage of the claim and it
alone can’t cover the cost caused to the
victim. This is directly related to the lack
of measurement for loss and it can be
seen as challenged arise in relation with
calculating the loss caused to health,
mental and privilege, expected income.
2.7. The following conclusion has
been made regarding the implementation
of Article 17.1.2, 17.1.3, 18.4, 19.1-
19.6 of Law on National Human Rights
Commission within the framework
of execution of requirements and
recommendations of commission
members. It includes:
In Mongolia, there has not been
much done to increase the amount
of accountability to be charged to the
individual who does not satisfy or execute
the requirements and recommendations
issued by the Commission member. This
is one of the key factors for insufficiency
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for implementation of requirements and
recommendations. In other countries,
an ombudsman is an official who is
charged with representing the interests of
the public by investigating and addressing
complaints of maladministration or
a violation of rights. Ombudsmen
sometimes also aim to identify systematic
issues leading to poor service or breaches
of people’s rights. At the national level,
most ombudsmen have a wide mandate
to deal with the entire public sector, and
sometimes also elements of the private
sector (for example, contracted service
providers).
But in practice, the reply to the
requirement and recommendations of
the Commission member do not receive
within the timeframe set by the law.
Commission officer has to make personal
phone call to the entity, organizations or
officials who received the requirement,
recommendation to demand for a reply.
The uncertainty over the timeframe of the
deadline set by the law on requirements
and recommendations seems to be the
problem. Such as, it is unclear when
sending requirement, recommendation
to the soum or aimag, whether time
period is to be counted from the date
such organizations or officials received
such document or the date shown in the
document sent from the Commission.
NHRC has sent total 229 requests
to the authorized authorities, officials
to take measurement to the officers
who are considered to violated human
rights, freedom between 2001-2016.
Actions taken under these requirements
are relatively slow in terms of execution
and in some cases, liabilities imposed is
minimum in comparison with violation.
Implementation of the regulation does
not reach appropriate level and result is
weak regarding the evaluation, trust from
the public, communities for fair inquiry of
the violation. This is due to the fact that
law enforcement authority itself verify its
officers and employees’ violation.
 A Research Carried out by the National Legal Institute in 2017
There is no system or mechanism for
accountability, solutions or arrangements
for non-receipt of requests from the
Commission, not to respond to the
requirements or to return with a ground of
unreasonable.
It is difficult to assess the
implementation of requirements and
recommendations submitted by the
Commission. For instance, it is providing
an opportunity to further worsen the
violation of the human rights and falsely
judge the information delivered by the
organizations explaining the action is
expected or attempted to be taken to
cease the violation of human rights or such
violation is not detected through internal
inspection rather than taking immediate
actions to stop the violation.
2.8. The following conclusions
have been made for the study of Article
17.1.4 of the Law on National Human
Rights Commission within the framework
of conciliation from the Commission. It
includes:
Article 17.1.4 of the law about
Commission reflected the issues resolved
through conciliation of the parties. But
there is still no detailed regulation about
how this process is done. That is why
it is unclear for what complaints are
resolved by way of conciliation, what
status the commission officers will have
in the conciliation process (reconciliation
mediator), what are their power and
functions and what method is to be used.
Accordingly, the legal environment for
implementing the reconciliation activities
set forth in Article 17.1.4 of the Law on
National Human Rights Commission is
incomplete. It is unknown that how how
to evaluate conciliation agreements and
the results of conciliation or whether any
legal consequences arise when a contract
is breached or refused by the contract.
There is still a number of issues that have
not been taken into account in relation to
the Law on Reconciliation Law approved
in 2012. Therefore, the legalization of this
173
regulatory purpose is inadequate and in
practice, it is not feasible.
Suggestions and
recommendations
In order to improve the law on
National Human Rights Commission and
to constitute the legal environment for
implementation of the law, the following
measures can be taken. It includes:
1. Reform the Law on National
Human Rights Commission in conformity
with the Paris Principles;
2. Organize the nomination and
selection of the NHRC to the public
in a transparent and open manner in
conformity with the Paris Principles;
3. Include the knowledge, expertise
of candidates on human rights nominated
for the member on the recommendations
submitted from other authorized
authorities;
4. Make amendments to the
regulation of this law about gender
equality;
5. Pay more attention into preparing
a report about human rights, freedom
in Mongolia, support the execution of
International human right treaties and
drafting of report of the Government and
to ensure the availability of professional
personnel and budget sufficient for
assessment, research and inspection
required for drafting a recommendation
relevant to the reality;
6. Clarify the agenda of the
Commission’s report, for example to have
parliamentary session of the parliament to
discuss over, to make relevant decisions
and to have the Commission informed
about the measures and results it has
taken;
7. Coordinate the activities of
organizations that promote legislation
and international treaties and conventions
about human rights.;
8. The budget of the Commission
shall be approved by the Parliament;
LAW REVIEW
9. Confirm the rights to be enjoyed
during data collection process by the
officer acting on behalf of and in the
function of the Commissioner within the
timeframe of resolving a complaint at the
Commission, resolve the issues to protect
the officer under legal protection;
10. Process assessment
methodology for actions implemented by
the organization received requirement,
recommendation in order to satisfy the
execution of requirement, recommendation
delivered by the Commission, finalize the
scale and type of accountability system
to be followed when violating individual
or organizations delays the execution of
the requirement and recommendation or
fail to take immediate actions to stop the
violation of human rights;
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11. Make amendments for
administrative dispute to the regulation
under this law regarding the transfer of
criminal and civil disputes to the related
authorities and officers according to the
jurisdiction;
12. Clarify the legal environment for
the Commission’s conciliation process
and the harmonization of the Law on
Reconciliation.
The recommendations suggested
by research team are processed within
the framework of eliminating challenges,
violations, gaps and overlaps detected
in the results of assessment performed
on the implemented of law on National
Human Rights Commission of Mongolia.
These recommendations can be used for
reforming the law.