MONGOLIAN

CUSTOMS PROCEDURES:
CUSTOMS TARIFFS AND RULES OF ORIGIN

12 OCTOBER 2020
 PRESENTATION STRUCTURE

- Customs Organization

- Customs legal basis & Customs Procedures

- Customs Duty & Tariff rates

- Rules of Origin

- Non-preferential Rules of Origin

- Preferential Rules of Origin

 VISION, MISSION AND VALUES

To safeguard national security, contribute extensively to national

VISION development goals, and to provide high expertise international
class service

• Implementing customs law

• Ensure the safety of foreign trade
MISSION • Facilitate legitimate trade
STATEMENT • Improve the effectiveness of RM based on customs control
• Provide an income to state budget

• Pursue code of conduct

• Openness, transparency and fairness
VALUES • Be professional and highly skilled
• Be innovative
• Teamwork
 CUSTOMS ORGANIZATION

▪ Customhouses –15; ▪ International border crossing points – 12;

▪ Customs Branches – 3; ▪ Bilateral border crossing permanent points – 8;
▪ Border Ports – 46; ▪ Bilateral border crossing temporary points – 20;
▪ Customs Bonded Zones – 51; ▪ Transit points – 4;

▪ Total Employees – 1462;

▪ Customs Officials – 1106;
▪ Service and Maintenance – 356;
CUSTOMS GENERAL ORGANIZATION
 CUSTOMS LEGAL BASIS

Laws, legislations and regulations enforced by Customs

• Mongolian laws – 72;

• Parliament decree – 23;

• Cabinet decree / Government resolution – 27;

• Director General Directives – 43.

 CUSTOMS MAIN PROCEDURES

Customs import/export procedures are governed by two main laws in Mongolia — the
2008 Customs Law, which provides the overall framework and the 2008 Law on Customs
Tariffs and Customs Taxes that covers the customs tariff, customs valuation, rules origin,
and the payment and collection of customs duties.

The main procedures for importation are:

• preparing and providing customs documents for the declaration of goods;

• customs inspection of customs documents;
• inspection of the goods and means of transport;
• levying customs duties and other taxes and payments thereto;
• granting permission and release of goods to cross the border.

Customs clearance procedures for exports involve essentially the same procedure as for
imports—declaration of the goods, inspection of customs documents, inspection of the
goods and means of transport, levying of any duties or taxes, and release of the goods.
 CUSTOMS CLEARANCE SYSTEM

Customs Control, Step by Step Customs Clearance Procedure

CAIS: Mongolia’s Customs Automated Information System

 Customs Duty & Tariff rates

Chart 1.Distribution of MFN tariff rates, 2020

• Import Duty:

– MFN tariff rates – 5% (Chart 1);

– Preferential tariff – /under Mongolia – Japan EPA/
– Normal tariff, double the rate of MFN tariffs.

• Excise duty on specific commodities;

• VAT – 10%;

• Seasonal duty 5% – 15% on specific commodities;

• Export duty – 0% specific duties on selected commodities;

 Rules of Origin

Rules of origin

Non-preferential rules of origin Preferential rules of origin

Non-preferential rules of origin:

Mongolia’s non-preferential rules of origin is in its 2008 Law on Customs Tariffs and Customs Taxes, which
provides the basic framework for rules of origin in Chapter 7: Article 26 – 31.

Preferential rules of origin:

Preferential rules of origin contained in the FTA (EPA) with Japan provide several different methodologies
including wholly obtained, produced entirely in the party exclusively of originating materials of the party, or
pursuant to the product specific rules as outlined in the Annex.
Non-preferential Fully produced [or wholly obtained?] in one
country
Rules of Origin • Mineral products extracted from the country,
its subsoil, territorial water and its bottom;
• Vegetables harvested in the country;
• Live animals born and raised in the country;
• Products of animal origin of the country;
• Hunting and fishing products hunted in the
territory of the state;
If not
• Marine fishing products and other products
extracted from the sea by a ship of that
country;
• Products manufactured on a ship of that
country by the marine fishing products and
other products extracted from the sea noted
above;
• Mineral products extracted from the seabed
that are not related to the water of the
territory of the country;
• Used items, industrial wastes and wastes
collected in the country for raw materials;
Produced in two or more countries
Determined by significant processing
• The commodity classification code has
changed at the item level of the
Harmonized System due to the
processing or production of goods;
• If the production and technological
activities of the goods are sufficient to
consider the country as the country of
origin of the goods;
• The value of materials or value added
used in the goods is 50 percent or
more of the cost of the final product.
(The following activities shall not be
included in the criteria for significant
processing of goods: activities aimed at
ensuring the integrity of goods during
storage and transportation; activities to
prepare goods for sale and transportation;
simple assembly operation; and the act of
mixing goods of different origin.)

• Goods manufactured in that country by the

products specified above.

Special provisions:

• Goods shipped in several shipments or not assembled or disassembled, as well as goods received
separately from several shipments can be considered as one good under certain conditions.

• The goods shall be considered as one commodity if the reasons for not assembling or disassembling
are provided, if they are supplied from one country and one consignor, if they are declared to one
Customs, and if they will be delivered to the Customs territory within 3 months after receiving the
Customs declaration.

• If machinery, equipment, apparatus and means of transport are supplied together with spare parts,
equipment and tools required for their use, their country of origin shall be the same.
• The packaging of goods imported shall be of the same origin as the goods, except for its separate
declaration.

• The country of origin of electricity, machinery, equipment and tools used in its production and
processing shall not be taken into account.
 Preferential
Rules of Origin

Preferential rules of origin contained in the FTA (EPA) with Japan provide several
different methodologies including wholly obtained, produced entirely in the party
exclusively of originating materials of the party, or pursuant to the product specific
rules as outlined in the Annex.

The product specific rules are defined by HS code and are of three basic types,
often with an option:
Change in Tariff Classification (at the HS 2-, 4-, or 6-digit levels);
Qualifying Value Content (either 40% or 50%);
Specific Manufacturing Process (for textile goods only, HS chapters 50-63).

The agreement also has provisions for accumulation, di minimus, and a certificate
of origin.
THANK YOU FOR
YOUR ATTENTION