A/HRC/43/45/Add.2
terrorism. 84 It is worth underscoring the country’s high-level political commitment to
addressing money-laundering challenges through its national action plan, under which it is
addressing a number of issues, including demonstrating increased numbers of investigations
and prosecutions, demonstrating further seizure and recovery of assets, monitoring
compliance by designated non-financial businesses and professions, and demonstrating
cooperation and coordination between authorities to prevent the evasion of sanctions.
78.
Base erosion and profit shifting, which the Organization for Economic Cooperation
and Development (OECD) has defined as planning strategies used by multinational
enterprises that exploit gaps and mismatches in tax rules to avoid paying tax,85 is an issue of
paramount importance given the size and complexities of multinational businesses, including
those involved in the mining sector.
79.
While underlining the important step forward taken by Mongolia in joining the
Inclusive Framework, the Independent Expert recommends that the State ensure that it has
clear and concise laws and regulations that make it illegal to intentionally incorrectly or
inaccurately state the price, quantity, quality or other aspect of trade in goods and services
in order to move capital or profits to another jurisdiction or to manipulate, evade or avoid
any form of taxation, including customs and excise duties. Customs officials should be
required to use available databases of information about comparable pricing of world trade
in goods to analyse imports and exports and identify transactions that require additional
scrutiny.86
80.
Of note is the introduction of the “ultimate holder” concept in the legislative
framework, which provides that any changes to title ownership should be treated as a
commercial transaction, with a 30 per cent corporate income tax rate.87 The adoption of this
measure is an additional effort towards a greater transparency and more robust tax
mobilization.
81.
The Independent Expert is also concerned about the past occurrence of criminal
amnesties, including for economic and tax-related offences with a direct impact on a number
of judicial cases. For example, in 2015, an amnesty was granted in connection to a significant
number of offences: while no money-laundering investigations were dropped under the
amnesty, a total of 80 inquiries, investigations or judicial proceedings related to economic
crimes were dismissed.88
2.
Corruption
82.
Mongolia has been a State party to the United Nations Convention against Corruption
since 11 January 2006. A national anti-corruption strategy was adopted in early 2017 to
reinforce efforts deployed.89
83.
While Mongolia climbed from 103rd to 93rd in its ranking on the Transparency
International Corruption Perceptions Index in 2018, many interlocutors expressed their
concerns about the vulnerability of public services to corruption and its potential impact on
public revenues, development and human rights.90 These concerns unfortunately echo the
concluding observations of the Committee on Economic, Social and Cultural Rights on the
84
85
86
87
88
89
90
See Financial Action Task Force, “Improving global AML/CFT compliance: ongoing process”, 18
October 2019. Available at www.fatf-gafi.org/publications/high-risk-and-other-monitoredjurisdictions/documents/fatf-compliance-october-2019.html.
See www.oecd.org/tax/beps/about/.
A/HRC/31/61, para. 87 (c).
See http://taxsummaries.pwc.com/ID/Mongolia-Corporate-Taxes-on-corporate-income.
Asia/Pacific Group on Money-Laundering, Anti-money-laundering and Counter-terrorist Financing
Measures: Mongolia – 2017 Mutual Evaluation Report (Sydney, 2017), p. 51. Available at www.fatfgafi.org/media/fatf/documents/reports/mer-fsrb/Mongolia%20MER%202017%20%20published%20version.pdf.
See Transparency International, “Mongolia: overview of corruption and anti-corruption”, 8 June
2018.
Asia Foundation, 2018 Study of Private Sector Perceptions of Corruption (San Francisco, 2018), p.
53.
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