The Business Council of Mongolia (BCM) aims to make constructive contributions to enhancing the business environment in Mongolia and works to foster trade and business relations by providing a networking forum for its members.
BCM would like to make following statement in regards to the court verdict following the investigation that lasted nearly 3 years into alleged violations of Mongolian taxation law against three former employees of SouthGobi Sands LLC (SGS) and against SGS as “civil defendant”. SGS's parent company, SouthGobi Resources Ltd., is a BCM member.
According to practices in many other countries as well as clearly defined articles in Mongolian taxation laws, tax dispute can be and usually solved through civil proceedings. BCM regrets that this case has been considered as a criminal case against above legislations and the defendants received very harsh sentences of sentences ranging from 5 years and 6 months to 5 years and 10 months of imprisonment in the correctional facilities of strict regimen in Mongolia.
Additionally, as noted by officials from embassies of foreign countries who attended the trial, there were interpretation problems during the trial which may have resulted in the defendants not understand the interpretation, nor could they express themselves clearly. BCM believes anyone must have right to a fair trial including right to express themselves fully and correctly.
The people and the Government of Mongolia understand the importance of and are working hard to overcome the economic difficulties and restore foreign direct investment that has dropped 85% in recent years. At a time like this, the process of court hearing and the verdict represents how basic legal rights of foreign invested companies and foreign nationals who are working and living here can be abused and undermines all of that hard work. This has sent shockwaves across the Mongolian and international investment community who now not only investing into Mongolia but cancelling their trips to Mongolia. . One of the fundamentals of a good investment climate is certainty and the Court’s verdict has left investors with many questions about transparency, governance and the rule of law, not only for companies but also for individuals. We, as a country, should not underestimate how damaging this verdict is for the Mongolian investment outlook.
As democratic country, independent judicial system is a basis for human rights in Mongolia. However instigating a criminal case into what is considered as a usual business matter, investigating for long period of time, subjecting to travel bans and giving harsh sentences without enough supporting evidences is contrary to democracy and creates suspicion of political motivation amongst investors.
BCM believes that effective cooperation between public and private sectors, equal legal rights, fairness accountability regardless of nationality are key to development and prosperity of Mongolia.
BCM hopes that the judicial organizations of Mongolia will pay attention to this case at the appeal level and provide fair and equal access to the trial for the participants within their legal rights.
THE BUSINESS COUNCIL OF MONGOLIA
Contact:
The Business Council of Mongolia
Express Tower, 12-th floor
Peace Avenue, Ulaanbaatar, 15160, Mongolia
Phone/Fax: 976-11-317027
The Business Council of Mongolia (BCM) aims to make constructive contributions to enhancing the business environment in Mongolia and works to foster trade and business relations by providing a networking forum for its members.
BCM would like to make following statement in regards to the court verdict following the investigation that lasted nearly 3 years into alleged violations of Mongolian taxation law against three former employees of SouthGobi Sands LLC (SGS) and against SGS as “civil defendant”. SGS's parent company, SouthGobi Resources Ltd., is a BCM member.
According to practices in many other countries as well as clearly defined articles in Mongolian taxation laws, tax dispute can be and usually solved through civil proceedings. BCM regrets that this case has been considered as a criminal case against above legislations and the defendants received very harsh sentences of sentences ranging from 5 years and 6 months to 5 years and 10 months of imprisonment in the correctional facilities of strict regimen in Mongolia.
Additionally, as noted by officials from embassies of foreign countries who attended the trial, there were interpretation problems during the trial which may have resulted in the defendants not understand the interpretation, nor could they express themselves clearly. BCM believes anyone must have right to a fair trial including right to express themselves fully and correctly.
The people and the Government of Mongolia understand the importance of and are working hard to overcome the economic difficulties and restore foreign direct investment that has dropped 85% in recent years. At a time like this, the process of court hearing and the verdict represents how basic legal rights of foreign invested companies and foreign nationals who are working and living here can be abused and undermines all of that hard work. This has sent shockwaves across the Mongolian and international investment community who now not only investing into Mongolia but cancelling their trips to Mongolia. . One of the fundamentals of a good investment climate is certainty and the Court’s verdict has left investors with many questions about transparency, governance and the rule of law, not only for companies but also for individuals. We, as a country, should not underestimate how damaging this verdict is for the Mongolian investment outlook.
As democratic country, independent judicial system is a basis for human rights in Mongolia. However instigating a criminal case into what is considered as a usual business matter, investigating for long period of time, subjecting to travel bans and giving harsh sentences without enough supporting evidences is contrary to democracy and creates suspicion of political motivation amongst investors.
BCM believes that effective cooperation between public and private sectors, equal legal rights, fairness accountability regardless of nationality are key to development and prosperity of Mongolia.
BCM hopes that the judicial organizations of Mongolia will pay attention to this case at the appeal level and provide fair and equal access to the trial for the participants within their legal rights.
THE BUSINESS COUNCIL OF MONGOLIA
Contact:
The Business Council of Mongolia
Express Tower, 12-th floor
Peace Avenue, Ulaanbaatar, 15160, Mongolia
Phone/Fax: 976-11-317027