(2022-10-07-ны өдрийн орчуулга)     Unofficial translation

LAW OF MONGOLIA

July 5, 2022                                                                                              Ulaanbaatar city

on legal status of industrial and technological parks

/Revised edition/

cHapter one

General provisions

Article 1.Purpose of the law

1.1.The purpose of this law is to regulate relations in respect to defining the legal basis of industrial and technological parks, establishing an industrial and technological park, determining its purposes, principles and forms, as well as relations related to its organizational structure, activities and supports to be provided by the State to them.

Article 2.Legislation on the legal status of industrial and technological parks

2.1.The legislation on the legal status of industrial and technological parks consists of the Constitution of Mongolia, this law and other legislative acts enacted in conformity with them.

2.2.If an international treaty to which Mongolia is a party stipulates otherwise than this law, then clauses of the international treaty shall prevail.

Article 3.Scope of application of the law

3.1.This law shall apply to the relations in connection with establishing the industrial and technological parks and defining the legal basis of organizational structure of the operation of its management and units.    

3.2.The relations in connection with urban development, infrastructure and constructing buildings and facilities of the industrial and technological parks shall be regulated by the relevant laws.

Article 4.Definitions of terms

4.1.Terms used in this Law shall have the following meanings: 

4.1.1."Industrial and technological park" /hereinafter referred to as "the park"/ means a complex of production and technology interconnected with the activities in certain sector and which has a specific territory, favorable business environment and infrastructure for the implementation of certain objectives of industrial and technological developments;

4.1.2."Park management" means a legal entity which is a holder of a license to organize and develop the operation of the park;

4.1.3."Park unit" means a legal entity, a business incubator, and/or a research and development organization to be conducted production and service in the territory of the park based on the contract made with the park management;

4.1.4."Research and development organization" means an organization with function to develop products and services through the introducing science and research results into production, the carrying out experiments and designing, and the transfer and localization of advanced techniques and technologies;

4.1.5."Infrastructure of the park " means a complex with power and heat sources, pipelines, clean water supply, disinfection and treatment facilities, roads and railways in the territory of the park;

4.1.6."Development plan of the park" means a development document based on the feasibility study of the unit, technical and technological level, market demand and supply research, and cluster principle.

Article 5.Purpose, form and principle of the park

5.1.The park shall be established for the following purposes:

5.1.1.to implement nationwide projects and programs in order to replace imports and produce export products, which are particularly important for the social and economic development of the country, and improve economic competitiveness;

5.1.2.to transfer, introduce and localize environmentally friendly, new, advanced and high technology;

5.1.3.to develop production without adverse impact on the environment;

5.1.4.to support national and regional social and economic development;

5.1.5.to establish an environment for the development of small and medium industries and services, to create workplaces;

5.1.6.to develop waste sorting, recycling, reuse, disposal, and burial industry.

5.2.The park management shall have the following forms of ownership:

5.2.1.state-owned;

5.2.2.locally owned;

5.2.3. privately owned;

5.2.4. others.

5.3.The Park shall adhere to the following principles in its activities:

5.3.1.not to restrict competition;

5.3.2.to be free of interest;

5.3.3.to be efficient;

5.3.4.to be transparent and open;

5.3.5.to be stable and continuous.

Chapter two

POWERS OF STATE AND LOCAL SELF-GOVERNING BODIES IN RESPECT TO THE PARK

Article 6.Power of State Great Khural

6.1.The State Great Khural shall approve legislation on industrial and technological park and other legislation in connection with thereof and supervise their implementation.

Article 7.Power of Government

7.1.The Government shall exercise the following powers with respect to the park:

7.1.1.to implement the state policy on the park and to organize the implementation of the legislation;

7.1.2.to issue, extend, suspend, restore and revoke a license for conducting activities of the park based on the proposal of the relevant state central administrative body;

7.1.3.to establish a park management specified in the provision 5.2.1 of this Law and adopt a charter;

7.1.4.to approve and enforce relevant rules, regulations and instructions on the matter of supporting and controlling over the park's activities;

7.1.5.to take and allocate a land for special needs of the state for the purposes specified in Article 16.1.16 of the Law on Land;

7.1.6.to approve the list of industrial sectors, directives of operation, product types and park locations for the park, by taking into account of industrialization, long and medium-term development and innovation policies, infrastructure development, raw materials, labor resources, as well as market demand and needs;

7.1.7.to promote and provide support in selling products produced in the park in foreign markets, and develop commercial, economic, scientific and technical cooperation;

7.1.8.other powers stipulated by law.

Article 8.Power of State central administrative body

8.1.The state central administrative body in charge of industrial and technological park matters as stated in the Law on the Government of Mongolia /hereinafter referred to as the "state central administrative body"/ shall exercise the following powers with respect to the park:

8.1.1.to implement, enforce and monitor the legislation on the park on matters of its jurisdiction;

8.1.2.to create and maintain a park database for the purpose of researching advanced techniques and technologies, determining the price of products and services, and the perspective of demand and needs, and to approve related regulations thereof;

8.1.3.to study, assess, and make conclusions on the social and economic impact of the park;

8.1.4.to cooperate with relevant organizations in the field of forming, preparing and retraining human resources necessary for the park;

8.1.5.to develop a proposal to issue, extend, suspend, restore and revoke a license for conducting activities of the park /hereinafter referred to as "the license"/ and have it approved by the Government;

8.1.6.to enter into an agreement with the park management, to ensure and monitor its implementation, and to make a conclusion;

8.1.7.to establish a non-staff council with function to provide opinions and recommendations on the park development plan and the technical and economic feasibility of the unit, and approve its rule;

8.1.8.to cooperate with professional non-governmental organizations in the field of improving production efficiency, expanding the market, introducing new technologies, setting standards of professional activity, protecting domestic industry, attracting investment, and promoting it;

8.1.9.other powers provided by law.

Article 9.Power of local self-governing body

9.1.Citizens' Representatives Khurals of aimag or capital city shall exercise the following powers with respect to the park:

9.1.1.to determine the territory and location of the park in accordance with the list stipulated in the Article 7.1.6 of this Law;

9.1.2.to take and allocate the land for local special needs for the purposes specified in Article 16.1.16 of the Law on Land;

9.1.3.to resolve the issue of building the park infrastructure in the way of issuing securities, supporting public private partnership, and/or other ways;

9.1.4.other powers provided by law.

Article 10.Power of aimag or capital city governors

10.1.Aimag or capital city governors shall exercise the following powers with respect to the park:

10.1.1.to monitor the adverse impact of park's activities to the environment;

to approve local programs to support park activities in the given territory, and to monitor its implementation;

10.1.2.to resolve matters on land possession and usage to the park management based on the decisions of the relevant competent authorities, and make an agreement;

10.1.3.to resolve matters on possession and usage of the park land specified in the Articles 5.2.3 and 5.2.4 of this Law in accordance with the Law on Land;  

10.1.4.to support the establishment of an industrial and technological park in the given territory;

10.1.5.to inform the public about decisions related to industrial and technological parks, and projects being implemented in the respective territories from time to time;

10.1.6.other powers provided by law.

chapter three

LICENSE FOR CONDUCTING ACTIVITIES OF THE PARK

Article 11.Issue and extend the license for conducting activities of the park

11.1.A legal entity that meets the following requirements shall submit a request to establish a park to the state central administrative body:

11.1.1.to be established in accordance with the legislation of Mongolia;

11.1.2.to be a taxpayer in Mongolia;

11.1.3.to have financial, economic, technological and management capacity to implement the park development plan;

11.1.4.to be state an owned legal entity as of the legal entity which will conduct activities of the park stated in the Article 5.2.1 of this Law;

11.2.The applicant requesting for the license shall submit the following documents to the relevant state central administrative body in addition to the documents stated in the Paragraph 3, Article 561 of the Law on Permits:

11.2.1.park unit feasibility study;

11.2.2.park development plan;

11.2.3.assessment of the technical and technological level of the park unit;

11.2.4.environmental impact assessment;

11.2.5.a list of park units to be contracted;

11.2.6.proposals of the Citizens' Representatives Khural of the respective aimag or capital city.

11.3.A license stated in the Article 7.1.2 of this Law shall be issued for the term of up to 15 years.

11.4.Based on the license, the State central administrative body shall enter into an agreement with the park management for the term of the license.

11.5.The State central administrative body shall annually evaluate the agreement specified in Article 11.4 of this Law and present it to the Government.

11.6.Prior to 30 days before expiration of the term specified in Article 11.3 of this Law, a license holder shall submit a request to extend the term of the license together with relevant documents  to the state central administrative body.

11.7.The State central administrative body shall receive the request stated in the Article 11.6 of this Law, evaluate the agreement, and if it considers that it was implemented efficiently, it shall make a proposal to extend the license for the term of up to 15 years, and the Government shall decide whether to extend it or not based on the proposal by the state central administrative body.

Article 12.Suspension, renewal or revocation of the license

12.1.If the authorized organization stated in the relevant law made a conclusion that the following violations have been detected in the park's activities, it shall submit a proposal to suspend the license, issued to the legal entity, to the state central administrative body:

12.1.1.did not operate in accordance with the park development plan, or engaged in activities other than those specified in the plan;

12.1.2.misuse of state support;

12.1.3.has not started its activities within the period specified in the agreement;

12.1.4.other cases specified by law and agreement.

12.2.Based on provisions stated in the Article 13.1 of this Law or Article 6.1 of the Law on Permits, the license shall be suspended in accordance with Article 7.1.2 of this Law.

12.3.The license for conducting park activities shall be revoked on the grounds specified in Article 17 of this Law, or Article 6.2 of the Law on Permits.

12.4.If the suspended conditions stated in the Article 12.2 of this Law were diminished, the period of the license shall be restored in accordance with Article 7.1.2 of this Law.

Chapter four

PARK MANAGEMENT AND UNITS, AND THEIR RIGHTS AND OBLIGATIONS

Article 13.Rights and obligations of park management and park units

13.1.The park management shall be in the form of a company established in accordance with the Law on Company.

13.2.Other relations related to the organizational structure, governance, control and activities of park management shall be governed by the Law on Company.

13.3.The park management shall have the following rights and obligations:

13.3.1.to make an agreement with the central state administrative body, and enforce its implementation;

13.3.2.to make an agreement with the park unit on the basis of the feasibility study, technical and technological level and environmental impact assessment, and enforce its implementation;

13.3.3.to receive a fee for providing services to the park unit by making an agreement in accordance with Article 13.3.2 of this Law;

13.3.4.to implement the development plan of the park, build and possess the required infrastructure, and ensure its normal operation;

13.3.5.to possess and use the special needs land allocated for the purpose of the park in accordance with designation, to have used the land by the park unit on the basis of the agreement;

13.3.6.to provide and receive information related to park activities in the database specified in Article 8.1.2 of this Law;

13.3.7.to receive support to be provided according to this Law;

13.3.8.to intermediate in order to attract investment to the park unit based on the investment plan of the park, to sell products, to form human resources, and to obtain financial services, and to provide other necessary services.

13.4.The park unit shall have the following rights and obligations:

13.4.1.to make an agreement with the park management as specified in Articles 13.3.2 and 13.3.5 of this Law, and require the park management to fulfill its contractual obligations;

13.4.2.to receive support to be provided according to this Law;

13.4.3.to provide and receive information related to the activities of the park unit in the database specified in Article 8.1.2 of this Law;

13.4.4.to pay the relevant fees according to the agreement specified in Article 13.3.3 of this Law;

13.4.5.to ensure the implementation of the agreement made with the park management;

13.4.6.to use of park infrastructure in equal rights.

13.5.The amount, location and period of the land to be used shall be specified in the agreement stated in Article 13.3.5 of this Law.

13.6.The amount of fees to be paid by the park unit to the park management and the payment procedure shall be determined by the Government.

Article 14.Income from park management activities

14.1.Park management activities shall be financed from the following income:

14.1.1.income from own activities;

14.1.2.fee for providing services to the park unit;

14.1.3.others permitted by law.

CHAPTER FIVE

PARK REQUIREMENTS AND STATE SUPPORT

Article 15.Requirements to be set to the Park

15.1.The Park shall meet the following requirements:

15.1.1.to be based on open, transparent and fair competition in order to support business;

15.1.2.to meet urban development norms, rules and standards;

15.1.3.to create a favorable and stable environment for the persons operating in the territory of the park to attract investment and conduct operations;

15.1.4.not to have an adverse impact to the environment;

15.1.5.to support and mutually protect the public and private partnerships and investments;

15.1.6.to have the necessary infrastructure, such as roads and railways, in the territory of the park, or be able to develop these infrastructures;

15.1.7.to be provided with a water supply and reliable source of energy necessary for the projects and programs to be implemented in the territory of the park, and their infrastructure and development;

15.1.8.to have a detailed plan to support the national and local sustainable development and economy, reduce unemployment, and train professional workers;

15.1.9.others prescribed by law.

15.2.The park may have units that provide training, research and development, and business incubator services.

Article 16.State support to be provided for park activities

16.1.The state may provide the following types of support for the park activities:

16.1.1.to provide tax support for park management and unit activities;

16.1.2.to issue securities and make capital guarantees for discounted foreign loans in order to create the funding sources required to support the activities of the park by the state;

16.1.3.to support public-private partnership, private sector investment and participation in the construction of park infrastructure and buildings;

16.1.4.to finance the construction of park infrastructure from state and local budgets, government bonds and other related sources;

16.1.5.to establish a special customs zone and a customs-guaranteed factory in the territory of the park;

16.1.6.to support obtaining necessary permits in connection with projects and programs;

16.1.7.to increase the number and amount of labor force and specialists to be hired from abroad, and to issue relevant permits in a simplified manner;

16.1.8.to provide with work office to the foreign citizen in order to train and practice production workers of the park management and unit, and to exempt from payment of employment working place if a foreigner provided income-generating work or service;

16.1.9.to issue a stabilization certificate and make an investment contracts in accordance with the Law on Investment;

16.1.10.other support provided by law.

16.2.The support specified in Article 16.1 of this Law shall apply only to activities carried out in the territory of the park.

16.3.The support specified in Article 16.1 of this law shall be provided in accordance with relevant legislation.

16.4.In the following cases, the state support to the park unit shall be canceled and the tax expenses incurred in the budget shall be refunded within 30 days from the date of determination of such cases:

16.4.1.if it is liquidated for reasons other than bankruptcy before the expiration of the license of the park;

16.4.2.if the park unit has not started its activities within 12 months from the date of making the agreement;

16.4.3.if the park unit has started its operation, but its operation has been interrupted or stopped for more than 24 consecutive months;

16.4.4.if the license was revoked according to Article 12.3 of this law.

16.5.The park unit shall not refund the tax expenses if the situation specified in clauses 16.4.1, 16.4.2, 16.4.3, and 16.4.4 of this Law is caused by unexpected or force majeure factors.

Chapter SIX

MISCELLANEOUS

Article 17.Prohibited activities to the park

17.1.The following activities are prohibited to the park:

17.1.1.production of alcoholic beverages;

17.1.2.tobacco production;

17.1.3.production of narcotic drugs and psychotropic substances;

17.1.4.production using toxic and radioactive chemicals prohibited by law;

17.1.5.activities that are not possible to reduce and rehabilitate an adverse impact on the environment;

17.1.6.other activities prohibited by law.

Article 18.Liabilities for violators of the law

18.1.A person or legal entity that violates this Law shall be subject to liability specified in the Criminal Code or the Law on Violations.

Article 19.Entry into force of the law

19.1.This Law shall enter into force on August 1, 2022.

CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIA ZANDANSHATAR.G