OECD kpcdb

1. Competition Law

 

The Law of Mongolia on Prohibiting Unfair Competition was first adopted in 1993 and been amended a number of times, the last of which in 2015. Currently, it is being implemented under the name: the Law of Mongolia on Competition (“Competition Law”). 

The purpose of this law is to regulate matters related to the creation of conditions for fair competition in the market for entities conducting business activities, identification and implementation of legal and organisational basis for prohibition, restriction and prevention of any activities impeding competition.

 

According to Article 2, legislation on competition consists of the Constitution, Civil Code of Mongolia, the 2010 Competition Law, and other legislation adopted in conformity with the Competition Law. 

 

General exclusion: There is no sector excluded from the application of the Competition Law other than those set out in the section Other Regulators, below.

 

The Competition Law is applicable to legal entities and government and local administrative organisations, unless these are activities related to government assistance in case of natural disasters and other emergencies. 

 

Extra-territorial application: According to Article 3, the Competition Law is applicable to enterprisers that conduct illegal activities outside of Mongolia if it has an effect in a market in Mongolia. 

 

2. The Authority for Fair Competition and Consumer Protection

 

The Authority for Fair Competition and Consumer Protection” (“AFCCP”)) was established in 2004 by Decree 222 of the Government of Mongolia (2004) to implement and enforce Competition Law. 

 

The AFCCP is responsible for the supervision of the implementation of legislation on competition and the comprehensive implementation of policy on competition, and seeks to protect the interests of businesses and consumers.

 

The AFCCP is the sole body to investigate and adjudicate with regards to suspected anti-competitive behaviours. 

 

The AFCCP is also responsible for the regulation of prices of natural monopolies in Mongolia, under Article 6 of the Competition Law. 

 

The AFCCP is also responsible for enforcement of the Law on Consumer Protection, Advertisement Law (unfair competition), Law on combating drugs and alcoholism, the Law on Amendments to the Law on State and Local Property, and the Law on Procurement of Goods, Works and Services with State and Local Funds.

 

Organisational structure of the AFCCP: Located in Ulaanbaatar, the AFCCP has 36 staff members. 

 

The AFCCP is established under the direction of First Deputy Prime Minister. The board of the AFCCP consists of a Chairman and eight members (two full time and six part-time members). The Chair, two standing members and three non-standing members are nominated by the Prime Minister. Other members are nominated by the National Chamber of Commerce and Industry, Mongolian Labour Union and by non-governmental organisations which operate activities related to consumer protection.

 

In accordance with Article 18 of the Competition Law, the Chairman and members of the AFCCP serve a 4-year term in office and can be re-elected once.

 

The AFCCP has the following departments: Administration Department; Competition Policy, Regulation Department; International Cooperation; and Market Studies Department. 

 

Under Article 14.5, the Chairman of the AFCCP plays the role of General State Inspector, and the AFCCP has state inspectors. 

 

Other regulators with competition powers: The Communications Regulatory Commission, Financial Regulatory Commission, Energy Regulatory Commission, and the Ministry of Construction Urban Development have exclusive competition powers in their regulatory sectors.

 

Competition advocacy: According to Article 15.1.7 of the Competition Law, the AFCCP has the power to submit proposals to a superior government body or administrative court to set aside decisions of public administration, local self-government and local administrative organisations in violation of the Competition Law.

 

Moreover, the AFCCP performs market studies, which may include an opinion or recommendation to the government to remove or reduce any obstacles to competition. AFCCP has carried out two major market studies in the fuel supply and meat trade sectors.

 

International co operation: Mongolia has concluded Memorandums of Understanding with Inner Mongolia, China, Japan’s JFTC, Indonesia’s KPPU, Federal Antimonopoly Service of the Russian Federation, and Turkish Competition Authority.

 

3. Investigation

 

Initiation of investigation: According to Article 22, an investigation may be conducted upon receipt of a complaint, information reported by media or on its own initiative and other basis provided by law.

 

Powers of investigation: Under Article 20, it is for the State Inspectors of the AFCCP to investigate each violation of the Competition Law. The inspectors may freely obtain information and documents, from the concerned organisation, officer and enterprise, necessary for research and inspection. 

 

The inspector may also examine persons, offices, factories, storehouses, computers, item of persons, and confiscate necessary document materials and items temporarily.

 

The AFCCP has carried out unannounced inspections within the past 5 years.

 

Failure to comply with investigation: Individuals and enterprisers refusing or disturbing an inspection, or destroying or producing false documents may be subject to a fine equal to 2 to 5 times of minimum salary.

 

4. Remedies and sanctions

 

The AFCCP investigates and adjudicates. Article 20 provides that a state inspector may take decisions regarding the imposition of administrative sanctions, without prior approval by the Board. 

 

Remedies and administrative sanctions

 

Remedies include cease and desist orders. Fines can be applied but depend on the violation (see respective sections below). 

 

According to Article 27, administrative penalties are imposed by a state inspector if a breach of the Competition Law is found. 

 

Criminal sanctions

 

Article 27 mentions the existence of criminal sanctions, however it does not indicate what may constitute a criminal offence nor what sanctions may be imposed.

 

5. Appeal

 

Under Article 26, a person may file a complaint against a decision of the state inspector to the AFCCP within 30 days after receiving the decision. With respect to the review, the AFCCP could request a recommendation or report by an independent arbitral audit body. The decision of the AFCCP may be appealed to the Administrative Court within 30 days after receiving the decision.

 

6. Private Enforcement

 

The Competition Law does not provide private damage action. Formally, Mongolian physical and legal persons can apply to the Civil Court for anti-trust damages.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).