Draft Amendments to the Law on Pledge of Movable and Intangible Property

On the 23rd of August 2016, Byambatsogt.S, Member of Parliament and Minister of Justice and Internal Affairs of Mongolia, submitted a draft amendment to the Law on Pledge of Movable and Intangible Property ("Draft Law") to the Parliament of Mongolia.

The Law on Pledge of Movable and Intangible Property was originally ratified on the 2nd of July 2015 ("Movables Pledge Law") and was to become effective on September 1, 2016 in accordance with Article 59.1 of the Movables Pledge Law.

However, the Draft Law seeks to amend Article 59.1 and postpone the day on which the Movables Pledge Law becomes effective to March 1, 2017.

We understand that the main reason for the postponement of the entry into force date is due to the requirement of the electronic registration system for the filing of pledge/security interests which forms an integral part of the Movables Pledge Law. According to the introductory document attached to the Draft Law, the project to set up the electronic registration system in collaboration with the International Finance Corporation will not be completed on time. The process requires finalizing the budget on the technical resources necessary as well as setting up a request for tender for development of the registration system which has not been finalized yet. We will notify you regarding any new updates on the Draft Law on a timely manner.

If you have further queries, do not hesitate to contact us.

SOLONGO.B, Partner (solongo@gtsadvocates.mn, tel+976 331020)

KHULAN.B, Paralegal (khulan@gtsadvocates.mn, tel+976 331020)

gtsadvocates: 25 8 2016