Mr. D. Mandakh, Chairman, Authority for Fair Competition and Consumer Protection of Mongolia

1. D.Mandakh
Chairman
05-24-2010
Ulaanbaatar

2.  About AFCCP
 Current situation of competition law and
policy
 Current situation of consumer protection law
and policy

3.  In 1993, ‘Law of Mongolia on Prohibiting Unfair
Competition’ was promulgated
 In 2000, Amendments to the ‘Law on Prohibiting
Unfair Competition’ approved
 In 2004, Government Regulatory Agency,
‘’Unfair Competition Regulatory Authority’’ by the
Government resolution #222
 In 2008, the authority has changed its former
name from UCRA to AFCCP and responsible for
enforcing and regulating both Competition and
Consumer Protection Laws and Policies.

4. First Deputy Prime
Minister
Chairman
Unfair Competition
Regulation Board
Board of
Directors
Vice Chairman
Departmentof
Public
Administration
Departmentof
International
Cooperation
Departmentof
MarketStudy
Departmentof
consumer
protection
Departmentof
Justice,
Investigationand
Regulation

5. To maintain sustainable
economic growth and
improve public well-being
through creating fair and
free competitive market
environment in the
Mongolian economy

6.  To enforce the Prohibiting Unfair Competition and
Consumer Protection laws in nationwide
 To conduct inspections, to issue conclusions and to take
measures in order to ban the activities of businesses
regarding implementation of legislation in business
entities as well as individuals, whose conducts are harmful
to consumers’ life, health, wealth and environment
 To receive and resolve the disputes and complaints related
to unfair competition and consumer protection issues
 To make product quality and safety test analysis by
authorized laboratories
 To conduct inspections, issue conclusions regarding the
activities of individuals and business entities
 To determine a business entity’s dominant or natural
monopoly positions or loss of such positions
 To control over the decisions by Government and local
administrative organizations that restricted competition

7.  To improve adequate legal framework for competition
regulation and consumer right
 To enhance public awareness toward better understanding
of fair competition and consumer protection
 To enforce the Law on Prohibiting Unfair Competition and
Consumer Protection legislations
 To establish a comprehensive database on market
competition and consumer protection for efficient law
enforcement
 To create structural and systematical improvements for
better competition and consumer protection legal
enforcement activities
 To continue strengthening of organizational capacity and
maintain the consistency of well-trained staff members

8.  Member of International Competition Network
 Observer member of International Consumer
Protection Enforcement Network
 Member of Consumer International
 We have been actively cooperating with
competition authorities: US Federal Trade
Commission, Bundeskartellamt, Federal
Antimonopoly Service of Russian Federation,
State Administration of Industry and Commerce
of China, Taiwan, Korea and Japan Fair Trade
Commission , Turkish Competition Authority
etc…

9. Activities 2005 2006 2007 2008 2009 By April,
2010
Conducted
investigation
number
2 18 18 26 35 25
Conducted
market study
number
4 23 39 15 35 5
The number of
received and
resolved claims
and requests
4 48 81 84 79 51
The number of
fined entities
2 13 2 8 24 68
Total fine 500,0
tugrugs
2.660,0 810,0 1.750,0 1.840,5 12.670,0

10.  Era of autonomous government
 Few monopolistic merchandisers dominated in
the whole as well as local markets selling
commodities with extremely high prices
 During the socialist economy
 Restricted foreign trade transactions
 State owned enterprises have monopolistic
power
 Consumers have no freedom of choice
 Their actual demands were not supplied

11.  Market principles introduced
to the economy
 Freedom of choice allowed and
supply increases
 Thus, competition
environment urged

12. Private monopolies created in place of state
monopolies
So:
 To restrict monopolistic power
 To establish free and fair market principle,
the Law on Prohibiting Unfair Competition
enacted in 1993

13. First Stage Second Stage
•Comprehensive
competition law
between 1993-
2004
•No enforcement
authority
•Since launching
AFCCP from
2005

14. Purpose of the Law on Prohibiting Unfair
Competition of 1993:
 Necessity to introduce state regulation on
market competition
 To regulate abuse of monopoly power and
unfair trade behaviors

15.  It was only infant stage of market economy
when competition law was adopted
 According to first competition law, it was
declared that dominant entities are those
market share of which exceeds more that 50%
and is approved by court decision
 In 2000, it was upgraded the competition law
of 1993, with aims to improve interlinks with
other laws and enforcement effectiveness.

16.  In this new amendment, it was legitimated to
establish enforcement agency
 Untouched issues in that amendments:
 Sanctions to those who violated the law
remained the same
 It was not comprehensively legitimated
monopolistic positions and conducts

17. While comprehensive competition law exists
there is no enforcement agency until 2005.
While lack of enforcement authority,
complaints were submitted to:
 Courts – 2 cases
 The Ministry of Justice and Home Affairs-1
case

18.  Government resolution:#222 of the year 2004
 Status: Government Regulatory Agency
 Name of organization: ‘’Unfair Competition
Regulatory Authority’’

19.  65 entities are announced as natural
monopolies,
 71 companies are identifies as entities with
dominant position in their market place
 More that 80 companies are investigated for
enforcement of the law, and
 25 breaches were identified

20.  1. to expand scope of the law application
 2. to improve provisions of dominant entities
 3. to further improve merger and acquisition
provisions with considering of economic
development and national companies’
competitiveness
 4. to further improve substantive cartel
regulation and introduce leniency program
 5. to increase sanctions level to those who
breached the law

21.  In 1991, the Law on Consumer Protection was
adopted
 In 1992, the Government accepted the ‘Basic
Principals of Consumer Protection’ approved at the
UN General Assembly
 In 1993, the Declaration on Consumer Rights of
Mongolia was adopted
 In 2003 the Law on Consumer Rights was amended
 Until December 2008, the Association of consumer
protection /NGO/ and local associations were
established as the first unit representing consumers.
 Since 2009, AFCCP has been responsible for
consumer protection issues in Mongolia

22.  The economic crisis and the poor purchasing
capacity of the individuals affect on supply of low
quality goods, works and services as well as
diminish the opportunity to choose cheap8 bad
quality products, works and services
 There is vital need to protect the rights of every
citizen of Mongolia8 to create efficient
mechanism targeted at improvement of safety
issue in all areas like trade, service, production,
goods, information without causing damage to
consumer life8 health, property and surrounding
environment.
 Recommendation and advices of international
experts

23.  Adopted the ‘National Program on Consumer
Protection’
 The purpose of this program: ‘To create
favorable legal environment to protect
consumer rights, raise awareness of the
public about culture of consumption and
consumer rights, protect their rights and
improve participation and involvement of
government and non-government
organizations, business entities and the
community in these activities’.

24.  Implementing the ‘National Program on
Consumer Protection’
 Conducting trainings, seminars, workshops
on Consumer Protection as well as
exhibitions of fake products in all districts of
the Ulaanbaatar and some main provinces of
Mongolia6
 Established the ‘Educational center for
Consumers’
 Consumer hot line: 1284 /to receive
complaints and disputes/

25.  Case on milk products /false information on
labeling/
 Case on construction sector
 Case on jewellery companies

26.  To conduct a market study on consumer
protection issues
 To draft a projects on consumer protection
and implement them


27. Thank you for your
attention!!!