Russia lifted restrictions on Mongolian livestock supplies

Russia has just lifted its trade restrictions on Mongolian livestock supplies after EU food exporters started facing billions of losses due to Russia's "full embargo" on a wide range of food and agriculture products imported from the EU, US, Norway, Canada and Australia. The embargo was announced in early August as a response to the Western sanctions over Russia's intervention to Ukraine crisis. List of foods include, but not limited to: fruit, cheese, pork, vegetables, spirits, wine, bakery goods & pasta, poultry meats, live cattle, soy beans, tree nuts, prepared food, frozen and whole fish, sunflower seeds, etc


On September 3, visiting Russian President V.Putin said in Ulaanbaatar that the decision would be made shortly. Mongolia has good possibilities to increase livestock supplies to the Russian market, but it was facing difficulties in the export due to Russia's higher standards on veterinary services. Now, Mongolian and Russian businesses will have no trade barrier in exporting meat into Russian market. Even, previous visa regime was canceled, that will come into effect by January 1, 2015. This is maybe a new opportunity for western companies to eye on Mongolia.

For the record, on June 22, 2014, Altanbulag free trade zone, 335km north of Ulaanbaatar, on the Mongolia-Russia border, was formally opened.

In July, the Government of Mongolia has passed a decision to turn the vehicle crossing checkpoint at the Altanbulag into a 24-hour operation port. The port used to operate between 9 am and 6 pm every day. Now it is 24-hour port.

According to 2002 law on Altanbulag free trade zone, following tax exemptions that businesses can enjoy:

Article 4. Income tax exemptions and relieves 
4.1. The amount of investment of business entities made into the main infrastructure of Altanbulag zone such as electricity, heating and water supply, telecommunications networks, automobile roads and railroads, shall be deducted from the taxable income.
4.2. Business entities that invest into construction of storage facilities, cargo terminals and hotels in the Altanbulag zone shall be granted exemption from the income tax for 5 years from the date of commencement of operations, and a 50 percent income tax relief in the subsequent 3 year period.
4.3. Business entities engaged in the storage and protection of goods and products, or in improvement of packaging and which concluded contracts with the Office of the Governor to operate for 10 or more years, shall be granted exemption from the income tax in the first year from the date of commencement of operations, and a 50 percent income tax relief in the subsequent 3 year period.
4.4. Foreign nationals, business entities and organizations residing permanently in the Altanbulag zone, by having registered with the Governor’s Office, shall be exempt from the immovable property tax.
4.5. Foreign nationals, business entities and organizations residing permanently in the Altanbulag zone, having registered with the Governor’s Office, shall be exempt from the income tax in the case of the sale of immovable property in their ownership to Mongolian business entities, organizations or citizens. 

 Article 5. Exemption and relief from land use fees 
5.1. Exemption and relief from the land use fees shall be granted in Altanbulag zone in the following cases:
5.1.1. Business entities engaged in trading and services shall be granted exemption from the land use fees in the 3 year period from the date of commencement of operations, and a 50 percent relief in the subsequent 3 year period;
5.1.2. Business entities engaged in the construction of the main infrastructure of the Altanbulag zone, as provided in 5.1 and 5.2 of this law, shall be granted exemption from land use fees in the first 5 years from the date of commencement of operations and a 50 percent relief in the subsequent 3 year period.