Research of Law and Regulatory Environment for Transit Transportation

1. Research of Law and Regulatory Environment for Transit Transportation Purev NARANTSETSEG 11 March 2008 Ulaanbaatar

2. Content Research Objective Research scope Structure and form of Research Results Actual issues in transit transportation Recommendations

3. Research Objective • To determine difficulties and barriers in entities of Mongolia for the conducting transit transportation services, • To define problems related to bilateral agreement implementations for transit transportation and to formulate recommendations,

4. Research scope • Belonging companies: - International freight forwarding companies - International Auto transportation companies - Foreign Trade companies • Date: - from 15 January to 18 February 2008

5. Research Structure and Forms • International Convention Ratification • Comparative Analysis • Total four chapters, 48 questions -General information of companies -Transit transportation and foreign trade of Mongolia -Transit transportation through territory of Russia -Transit transportation through territory of China • Direct Interview • Questionnaries

6. International convention ratification

7. Results of comparative analysis

9. Results of analysis Transit transportation and foreign trade of Mongolia: International convention ratification and implementation -Doesn’t ratify some conventions, so have difficulties. 87.5% Regional and bilateral agreement and implementations -Doesn’t sign some agreement, so have difficulties. 75% Laws implementation related to foreign trade and transportation and implementations -Doesn’t approve some laws, so have difficulties. 87.5% Implementation of rule and procedure related to foreign trade and transportation -Doesn’t approve some rules and procedures, so have difficulties.62.5%

10. Implementation of standard and norms related to foreign trade and transportation-Doesn’t approve some standards and norms, so have difficulties.62.5%Awards of state and administrative organizations related to foreign trade and transportation and implementation Resolutions of state and administrative organizations are difficult in works of us in some times.87.5%Convenience to receive information related to laws and regulations-To buy brochures.87.5%Delivery of laws and legal acts from state organizations-Give it to consumers, when they ask. 62.5%How much time do they spend to for the composing documentations?- 7-12 hours 50%

11. Level of single window service in the composing documentation-Some services are slip, but this is better than others.50%in which locating country do you compose documentations easy?-Started country 50%in which country do you have difficulties related to documentations?-Arriving country 87.5%-Transit country 75%What measurements are related to difficulties to compose documentations?-For time 75%-Communicate to many organizations 62.5%Language problems in the using documentations-There are problems and barriers related to documentations, so should follow carriage and goods. Very difficult. 50%

12. Transit transportation through territory of Russia: Auto transportation scope for transit through territory of Russia-To the European country or sea port 62.5%Auto road conditions of Russia-it is ok, but difficult in some place. 75%Regulations in road traffic-Have difficulties depending on the policemen.50%Tax and dues related to transportation-Road fees and dues 62.5%What is difference of this fee and dues from domestic transporter fee and dues?-High.50%

13. Unofficial tax, dues and bribes-Pay to customs officials.50%-Pay to professional auditing officials.50%-Pay to policemen.50%Transit transportation by railway-Have not discounts for land locked countries. 50%Agreement between the Mongolian Government and Government of Russian Federation on the transit transportation to have access to the sea through Russian territory and implementations. -The provisions to give extra discounts in transit transportations and services are not implemented. (5th article 3) 50%Boundary, customs and professional auditing-Relationships between departments and board have not been.50%Äàìæèí ºíãºðºõ òýýâýðòýé õîëáîîòîé ýðõ ç¿éí áàðèìò áè÷ãèéí ìýäýýëýë -Õèëèéí áîîìò äýýð àâäàã.62.5%

14. Transit transportation through territory of China: Transit transportation by railway-There are not discounts of land locked country.75% Agreement between the MPR Government and Government of Chinese Republic on the transit transportation to have access to the sea through Chinese territory and implementation.-The provision about opportunity for transit transportation by vehicles' of Mongolia is not implemented. (4th article a) 62.5%-Opportunity to use port sea and storage is not implemented. (7th article 1) 62.5%-The provisions to impose export and import taxes, other tax and preliminary tax in goods, luggage is not implemented. (7th article 3) 50%Law and legislation information related to transit transportation-Receive information in boundary port.62.5%China auto road condition-well.50%

15. Actual issues • Transit transportation and foreign trade of Mongolia • Difficulties relating to the documentations. (for timeframe and relating to the arriving countries) • Not ratifying relevant international conventions and agreements. • Not approving some laws relating to the foreign trade and transportation. • Difficulties of awards of the state and administrative organizations. • Transit transportation through territory of Russia • Information relating to the transit transportation is taking in the boundary ports. • Customs and auditing officials and policemen have taking unofficial fees, payments, dues and bribe. • The provision on tariffs with extra discounts in transit transportation and services are not implemented. (5th article 3) • Transit transportation through territory of China • Land locked countries have not discounts in transit transportation through railway. • The opportunity to use sea ports and storages is not implemented. (7th article 1) • Law and regulatory Information relating to the transit transportation is taking in the boundary port only. • The provision about opportunity to conduct transit transportation through automobile of Mongolia is not implemented. (4thartcle a à)

16. Implementing measures • From side of laws and regulations • To ratify the relevant international conventions, • To reflect and to amend the land locked countries discounts and rights in regional and bilateral agreements, • To approve laws relating to the foreign trade and transportation and to create law and regulatory favorable environment. • Institutional • To create conditions to provide implementations of international conventions and bilateral agreement, • To formulate rules, procedures, norms and standards to support foreign trade and transit transportation, • State and administrative decisions should be optimum, easy to understand and without difficulties for businessmen. • To create the information intensive providing system on the international laws and regulations of the transit transportation and trade for businessmen. • Unofficial dues, fees and bribe • To decide by support and participation of the international organizations , • To create the monitoring system for the implementing discounts and rights of land locked states, • To relate with relevant professionals and governments of contracting countries.

17. Explaining: + There is regulation to regulate this problem- There is not regulation to regulate this problem√ Bilateral agreement between government is fitting to the provision of multilateral conventions-√ Bilateral agreement between government is not fitting to the provision of multilateral conventions ° Article of Mongolia laws is not fitting to the international conventions THANKS