The Parliament of Mongolia (the “Parliament”) adopted the Law of Mongolia on Violations (the “Violations Law”), along with its procedural law, the Law of Mongolia on the Violations Procedure on May 11, 2017 (the “Violations Procedural Law”) pursuant to the Action Plan of the Government of Mongolia for 2016-2020 and other related legal acts. The Violations Law and the Procedural Law became effective on July 1, 2017. The Violations Law was enacted as a brand new law, as opposed to a revision or amendment of a former law, and has codified sanctions for all violations of Laws that are not criminal or tortious, unless stipulated otherwise in the law.
The purpose of adopting the Violations Law was to develop a liability system with respect to promoting human and property rights, to distinguish between criminal acts and violations that are not considered a crime and to prevent overlapping liabilities from being imposed for the same violation act or omission under different Laws.
This Law has received criticism from society due to its ambiguous language despite its long sighted purpose. For example, Article 6.21 of the Violations Law defines a violation of defamation as the publishing of untrue information which defames an individual’s fame and reputation or a legal entity’s business reputation to the public. However, this provision has been criticized and the media sector deems this provision as a violation of their freedom of press due to its ambiguous terminology and broad scope of application.
B. DISTINGUISHING VIOLATIONS FROM CRIME
Prior to the enactment of the Violations Law, the elements of some violations as defined in the Administrative Violations Law of Mongolia enacted on November 27, 1992 and annulled on July 1, 2017 (the “Administrative Violations Law”), were exactly the same as the elements certain crimes defined in the Criminal Law of Mongolia enacted on January 3, 2002 (the “Criminal Law”) which has since been replaced by the Revised Criminal Law of Mongolia that also became effective on July 1, 2017 (the “Revised Criminal Law”). Consequently, it was possible for a single violation to be sanctioned under the Criminal Law as well as the Administrative Violations Law with differing sanctions for each. In order to address this issue, one of the main purposes of the Violations Law is to prevent these overlaps between laws and to clarify the distinguishing features of criminal acts and violations. In other words, the Parliament intended to create a clear arrangement of the liability system in Mongolia by ensuring a clear divide between criminal sanctions that are to be imposed on those who violate the Criminal Law, or now the Revised Criminal Law and administrative sanctions that are to be imposed on those who have committed the violations provided by the Violations Law.
For example, if an individual or legal entity violates the Minerals Law of Mongolia, then under Article 7.11 of the Violations Law, a state inspection officer would have the jurisdiction and authority to investigate the violation within the statutory period of limitation according to Article 188.8.131.52 of the Violations Procedural Law although some violations may be investigated by police officers. Regardless, if an individual or legal entity is sanctioned under the Violations Law or if their violations are within the jurisdiction of the police authority under the Violations Procedural Law, it will not constitute a criminal offence. Further, such a violation under the Minerals Law of Mongolia or any other violations under the Violations Law would not be covered by the Revised Criminal Law as a criminal offence as the two laws no longer have overlapping offences.
C. OBJECTIVE OF THE LAW
The objective of the Violations Law is to impose sanctions on individuals who are 16 years of age or older, legal entities, branches and representative offices of legal entities including branches and representative offices of foreign incorporated companies, reorganized entities for their unlawful action or omission resulting in a violation within the territory of Mongolia.
The Violations Law, however, does not impose specific sanctions on officials who are in charge of implementing laws and administrative acts within an organization unlike the Administrative Violations Law which had provided for specific sanctions for such individuals, officers and legal entities. Under the Violations Law, the official is sanctioned either as an individual or legal entity depending on behalf of whom it was acting for when a violation was caused.
The Violations Law merged various sanctions defined in about 220 laws of Mongolia that are currently effective. Upon the adoption of the Violations Law, the Administrative Violations Law was annulled and approximately 220 laws, the sanctions of which were merged into the Violations Law were amended accordingly. Consequently, any violation committed within the territory of Mongolia and its corresponding sanction is now to be regulated by the Violations Law.
For example, the sanctions provisions at the end of the Minerals Law refer directly to the Violations Law. In relation to this, Article 7.11 of the Violations Law provides for the violations of the Minerals Law and the applicable sanctions which are fines along with compensation for losses in certain circumstances.
The Violations Law classifies all of its enforceable sanctions into three categories: main sanctions, additional sanction and compulsory remedies. These sanctions and compulsory remedies are imposed by considering the nature of a violation as well as the age and condition of the violator.
The main sanctions comprise of ‘fines’ and ‘detentions’ and only one of them is to be imposed in regards to a particular violation. However, both of the aforementioned may be imposed along with an additional sanction or any of the compulsory remedies if the law enforcement authority deems it necessary to do so.
- The amount of the fine is calculated in Mongolian togrogs (‘MNT”) that equals to ten to twenty thousand units for a violation by individual (approximately MNT 10,000-20,000,000), one hundred to two hundred thousand for a violation by legal entity (approximately MNT 100,000-200,000,000). A single unit equals to MNT 1,000.
- An individual committing a violation may be detained for a period of a week, up to thirty days.
Compared to the Administrative Violations Law, where the fines ranged from MNT 100-50,000 for individuals, MNT 1,000-60,000 for officials and MNT 50,000-250,000 for legal entities with a detention of 6 months up to 2 years, the Violations Law has introduced an increase in the amount of fines heavily but has decreased the detention periods.
- Additional sanction comprises of a suspension of the right to conduct certain professional or licensed activities or other rights.
- Compulsory remedies are (a) confiscation of property and its revenue accrued in result of violation, (b) seizure of equipment used to conduct the violation, (c) compensation to recover aggrieved individual or entity’s damages or loss, (d) mandatory rehabilitation and (e) mandatory training. (c) and (d) are new types of remedy introduced by the Violations Law.
The main body of the Violations Law consists of the following twelve groups of violations assorting violations by their nature and type that were once defined and scattered in about 220 separate legislations. This division into groups has made it easier to identify violations of which specific law is covered under the Violations Law.
- Violation of the public order and safety;
- Violation of the rule of public morality, health and hygiene of the population;
- Violation of the protection of environment, animals and plants including, but not limited to, violations of the Minerals Law of Mongolia, Petroleum Law of Mongolia and the Law of Mongolia on Water;
- Violation of public property and ownership rights including, but not limited to, violations of the Law of Mongolia on Land and the Law of Mongolia on Patents, Copyright and Trade Marks;
- Violation of education, culture, science and operation of technology regulations;
- VIolation of the business activities including, but not limited to, the Advertisement Law of Mongolia, the Consumer Protection Law of Mongolia, the Competition Law of Mongolia, the Company, Partnership and Corporation Laws of Mongolia and the Law of Mongolia on the Health and Safety of Work Sites;
- Violation of security, bank, finance, custodian, tax and insurance regulations including, but not limited to, Laws of Mongolia on Audit, Banks, NGO, Securities Market, Insurance, Accounting and Bookkeeping, Taxation, Customs, Investment, Anti-Money Laundering and Currency;
- Violation of construction, manufacturing and energy regulations including, but not limited to, the Construction and Energy laws of Mongolia;
- Violation of agriculture and farming regulations;
- Violation of information, communication, transportation, vehicle operation and traffic safety regulations including, but not limited to, the Road Law, Transportation Law and Traffic Safety Laws of Mongolia;
- Violation of regular operation of the government agencies; and
- Violation of regulations with respect to border safety, foreign citizens and individuals without citizenship travelling to Mongolia.
In short, the Violations Law provides clarification by codifying and merging all violations under most of the laws that are in force in Mongolia and by distinguishing them from criminal offences in order to provide certainty to the public.
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 Laws mean any other laws, rules, regulations, instruments, administrative acts and other legal acts of Mongolia.