The Government of Mongolia is working to reduce the number of business licenses to under 400.
In 2001 for the first time, Mongolia adopted the Law on Business entities activity licensing. Under this law 210 organizations issue licenses. Since then, it has become common for local authorities to issue licenses for certain activities, which are not authorized by law and impose fees. Although it is not authorized by law, following the decision of local authorities it has become common practice. This is due to inconsistencies in the licensing legislation. Therefore, it is necessary to eliminate duplicates, conflicts, and gaps between laws, and to prohibit the creation of illegal categories and types of licenses that hinders citizens and business entities. It is also necessary to establish a unified regulation of the state licensing process.
However, in 2019, approximately 1,400 licenses were being issued, and in 2020 it increased to about 1,500. In general, businesses have criticized the increase in the number of government licenses as a breeding ground for corruption and bribery.
Article 4.1.2.2 of the National Anti-Corruption Program provides for the simplification of licensing procedures, the establishment of a monitoring system, and the transfer of certain types of licensing and oversight functions to non-governmental organizations.
To reduce the difficulties and pressures faced by businesses and in order to implement the National Anti-Corruption Program, 22 members of parliament, including Mr. Byambatsogt, submitted a draft law to revise the Law on Licenses in 2019. Also in that year, the government submitted the draft of this law. In May 2021, the Speaker of the Parliament established a working group to consolidate the two draft laws. The working group made a list of licenses, reducing the number of licenses from more than 1,500 to 358.
During the preparation of the draft Law on Licenses, the Mongolian National Chamber of Commerce and Industry (MNCCI) organized a discussion on the Law of Licenses on June 18 of 2021, with the participation of business representatives and professional associations, including MPs Mr. Gankhuyag and Mr. Enkhbayar. The purpose of the workshop was an introduction of the consolidated draft of the Law on Licenses and participants were asked to comment and to make suggestions in the draft law.
In addition, for public comments and discussions, the draft Law on Licenses was posted on the website Forum.parliament.mn. Subsequently, the Law on Licenses was submitted to Parliament on September 16 of 2021 and is included in the list of laws to be discussed.
Currently, the government is focusing on facilitating and digitalizing the licensing process. For instance,
A working group was established by the decree of the Capital City Governor. It is estimated that there are more than 600 licensed services from 42 state organizations in the capital city. All of these permits will be revoked after analysis, except as required by law. On the other hand, it is planned to facilitate and repeal unnecessary administrative acts and administrative norms that create bureaucracy and red tape. 600 types of permits are only the tip of the iceberg. Behind this, there might be an unplanned and bureaucratic services. Therefore, the working group would like to ask citizens, small businesses, and companies to actively cooperate with them.
