18 June 2021
Mr. Sainzorig, Head of the Legal Policy Department of the Ministry of Justice and Home Affairs of Mongolia, briefed the public on the draft Law on License. The bill is expected to be adopted at the autumn Parliamentary session.
Mongolia adopted the Law on Business Licensing in 2001, the draft Law on License has been submitted to revise this law, which has been in force for 20 years
The Law on License is crucial for legislating how the state regulates certain types of business and economic activities and issues license. In addition to supporting and regulating the economy and business, licensing is a tool to ensure the public interest and to balance policies and interests in the rational use of a public property.
Currently, there are 914 licenses, permits, and certificates are issued in Mongolia and are currently regulated by more than 90 laws, making it difficult to coordinate in a unified manner. This is considered to be an obstacle to businesses and causing bureaucracy. Due to this, it is very difficult for a business person today to know what kind of license to obtain and operate. On the other hand, licenses are being issued by officials’ decision that is beyond the law. The main objective of this law is to cease requiring unnecessary licenses from businesses regarding public official’s decisions and improve the process of issuing, suspending, revoking, and terminating licenses.
Another key objective of the law is the establishment of a list of licenses, a clear definition of the subjects to be issued, and unified control and coordination. Second, the number of licenses will be kept to a reasonable level. Third, citizens and business entities shall be allowed to freely engage in activities not prohibited by law. Fourth, the licensing process will be open and transparent. In addition, an electronic system will be used to minimize human dependence. Also, we are looking for ways to transfer license issuing procedures from a government organization to professional associations. Most importantly, we are establishing a unified database of licenses to ensure transparency.
The current law legalizes the issuance of 210 types of licenses in 19 sectors. However, as of today, 914 licenses are being issued in accordance with other laws and regulations. Many of the licenses that are not specified in the law have been issued by the Citizens’ Representatives Council and relevant public officials.
Activities that may affect economic and financial stability and national security will require licenses from a government organization. For instance, the import, export, production of toxic chemicals, and the establishment of banks are, of course, require licenses. There are many activities today that do not need to have licenses but still require one in accordance with the law. Also, citizens and business entities applying for licenses will not be required to provide duplicate information to the government, which means public institutions will not require information from citizens that can be obtained from other government organizations. Today, more than 50 signatures must be collected from public officials, to obtain a construction permit. Only additional information that is not available to the government will be required from citizens and businesses, which will have a positive impact on reducing red tape and bureaucracy.
Under this law, the licensing procedure will be conducted in electronic form, and human participation will be reduced.
Also, the number of licenses will be halved. However, reducing the number of licenses is not the main goal. The licensing process will be transparent, the documents required will be clear, and citizens and businesses will be able to receive their licenses in a timely manner.
Making the licensing process more transparent, clear, and digital may have a significant positive impact on Mongolia's anti-corruption efforts.
For further information, please contact:
Erkhemjargal Odsuren, Officer, Research and Analysis Division
Independent Authority Against Corruption of Mongolia