Consultative meeting of customs and businesses held

Law on customs tax to be fully changed

Meeting participants express their ideas on streamlining customs procedures

On January 14, 2014, a meeting entitled “Customs-Business Consultative Meeting-2014” was held in the Soyombo Hall of the Tuushin Hotel in Ulaanbaatar.

In association with the US Agency for International Development, the Customs General Administration of Mongolia arranged the meeting which has been organized annually organized since 2008. The meeting focused its attention on facilitating external trade and creating favorable conditions for businesses. The event was attended by Ch.Ulaan, Minister of Finance, O.Ganbat, Chairman of the Customs General Administration, Richard Chen, Deputy Representative at USAID Mongolia, G.Bayanmunkh, President of the Mongolian Institute of Certified Public Accountants and over 80 representatives from the largest companies that actively participate in foreign trade as well as about 50 individuals and small and medium sized entities dealing in external trade. 

At the meeting, Mr. Ganbat said, “The Customs General Administration and business entities should have close cooperation and support each other constantly. The main objective of our organization is to invest in Mongolia’s economy through facilitating trade and creating convenient conditions for businesses. The key impetus to facilitate trade is risk management.

Commencing 2013, we are marking goods under the status of green, orange and red. Products involved in green status are passed without customs inspection, while, orange status goods pass with only document examination. Cars are included as a product with orange status. Goods involved in red status are subject to physical examination of the goods. We are mainly interested in passing goods under green status. This offers the possibility of not only being convenient for economic circulation of corporate products, but also the country’s economic development. However, some business entities fail to pursue the customs law and other related regulations by seeking possibilities to not pay taxes. For example, after conducting a customs post clearance audit, there were breaches revealed by 137 of 170 entities. We imposed a fine of Tgs4.2 billion on these companies and demanded compensation in the amount of Tgs 6 billion. Looking at this situation, there is a need to improve trade facilitation and increase business people’s knowledge on customs laws and rules. 

The business circle opened up three key issues such as improving legal acts, turning attention to morale and ethics of customs inspectors and eliminating long delays in the physical examination of large volumes of goods.

In response to this request, Ch.Enkhee, Head of the Law Department of the Customs General Administration, said, “We carried out a study on the customs tax law. We intend to fully change the law on customs tax. The revised version of this law will be developed and submitted to the government this year.” “We are paying more attention to communication skills and the morale and ethics of customs inspectors. Also, we are making efforts to improve the knowledge and education of our inspectors” said O. Davaasuren, Chairman of the State Administration and Management Department of the Customs General Administration.

“Work was launched to introduce special equipment to examine large amounts of goods in a short time. We are installing a screening apparatus to examine a 100 ton of containers in three minutes. The assembly work will be accomplished in the third quarter of this year”, stressed O.Ganbat, Chairman of the Customs General Administration.

According to customs authorities, the delay in turnover is not caused by customs organizations. This problem is connected with transportation. Goods shipped to Mongolia are delayed in Tianjin port in China for 30-40 days. 

In order to improve freight forwarding, the Customs General Administration plans to conclude agreements with some border organizations in China.

In the course of the consultative meeting, a Memorandum of Cooperation was signed between the Customs General Administration and the Mongolian Institute of Certified Public Accountants to strengthen the partnership between customs and businesses.