12 OCTOBER 2020

MONGOLIAN

CUSTOMS PROCEDURES:

CUSTOMS TARIFFS AND RULES OF ORIGIN

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

To safeguard national security, contribute extensively to national

development goals, and to provide high expertise international

class service

• Implementing customs law

• Ensure the safety of foreign trade

• Facilitate legitimate trade

• Improve the effectiveness of RM based on customs control

• Provide an income to state budget

• Pursue code of conduct

• Openness, transparency and fairness

• Be professional and highly skilled

• Be innovative

• Teamwork

MISSION

STATEMENT

VISION

VALUES

VISION, MISSION AND VALUES

CUSTOMS ORGANIZATION

▪ Customhouses –15;

▪ Customs Branches – 3;

▪ Border Ports – 46;

▪ Customs Bonded Zones – 51;

▪ Total Employees – 1462;

▪ Customs Officials – 1106;

▪ Service and Maintenance – 356;

▪ International border crossing points – 12;

▪ Bilateral border crossing permanent points – 8;

▪ Bilateral border crossing temporary points – 20;

▪ Transit points – 4;

CUSTOMS GENERAL ORGANIZATION

Laws, legislations and regulations enforced by Customs

• Mongolian laws – 72;

• Parliament decree – 23;

• Cabinet decree / Government resolution – 27;

• Director General Directives – 43.

CUSTOMS LEGAL BASIS

Customs import/export procedures are governed by two main laws in Mongolia — the2008 Customs Law, which provides the overall framework and the 2008 Law on CustomsTariffs 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 forimports—declaration of the goods, inspection of customs documents, inspection of thegoods and means of transport, levying of any duties or taxes, and release of the goods.

CUSTOMS MAIN PROCEDURES

CUSTOMS CLEARANCE SYSTEM

Customs Control, Step by Step Customs Clearance Procedure

CAIS: Mongolia’s Customs Automated Information System

Customs Duty & Tariff rates

• 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;

Chart 1.Distribution of MFN tariff rates, 2020

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.

Source:

Chart 3.[MNG] Non-preferential rules of origin

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.)

If not

Fully produced [or wholly obtained?] in one

country

• 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;

• 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;

• 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.

Non-preferential

Rules of Origin

Preferential

Rules of Origin

Preferential rules of origin contained in the FTA (EPA) with Japan provide severaldifferent methodologies including wholly obtained, produced entirely in the partyexclusively of originating materials of the party, or pursuant to the product specificrules 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 certificateof origin.

THANK YOU FOR

YOUR ATTENTION