National program single window eng 21 mar-07

THE GOVERNMENT OF MONGOLIA
NATIONAL PROGRAM TO ESTABLISH
A SINGLE ELECTRONIC WINDOW
FOR FOREIGN TRADE FACILITATION
March 2007
Ulaanbaatar, Mongolia

ABBREVIATION AND ACRONYMS
ADB Asian Development Bank
EPRC Economic Policy Reform Competitiveness project
GDNT General Department of National Taxation
ICT Information Communication Technology
ICTA Information Communication Technology Agency
ITPWG/TBG15 International Trade Procedures Working Group
ISO International Organization for Standardization
MASM Mongolian Agency for Standards and Metrology
MCGA Mongolian Customs General Administration
MoES Ministry of Education and Science
MoF Ministry of Finance
MFA Ministry of Food and Agriculture
MNCCI Mongolian National Chamber of Commerce and Industry
MoH Ministry of Health
MoIT Ministry of Industry and Trade
MRTT Ministry of Roads, Transportation and Tourism
SSIA State Specialized Inspection Agency
USAID United States Agency for International Development
UN/CEFACT United Nations Center for Trade Facilitation and e-Business
VAT Value Added Tax
WTO World Trade Organization

TABLE OF CONTENTS
ABBREVIATION AND ACRONYMS.......................................................................................i
TABLE OF CONTENTS............................................................................................................iii
SUMMARY.................................................................................................................................v
INTRODUCTION......................................................................................................................ix
SECTION I: CONCEPT OF A SINGLE WINDOW FOR TRADE FACILITATION...............1
SECTION II: RATIONALE OF THE NATIONAL PROGRAM...............................................7
SECTION III: NATIONAL PROGRAM TO ESTABLISH A SINGLE ELECTRONIC
WINDOW FOR TRADE FACILITATION..............................................................................11
SECTION IV: RECOMMENDATIONS...................................................................................15

SUMMARY
This document has been prepared in response to the tasks given to the Working Group (WG)
to draft a proposed National Program to implement a single electronic window for trade
facilitation (SEWT).
Section I of the document presents the concept of a single electronic window for trade
facilitation, its benefits, successful international experiences and best practices in its
implementation, models of implementation and success factors.
Section II examines the rationale for the establishment of a single electronic window to
facilitate international trade in Mongolia, the current summary status of agencies involved,
favorable conditions for implementation and current challenges.
Section III presents the proposed goals and objectives of the National Program, its phases,
principles of implementation and an action plan.
Based on international best practice research, section IV summarizes key recommendations of
the WG to implement the National Program. These recommendations are:
Recommendation 1: Decision of the “business model” of entity to lead implementation
An early decision on the “business model,” i.e., what kind of entity will take the lead in
implementation of the concept is a key milestone that needs to be decided as early as possible.
Future alternative course of action or possibilities will derive from such decision. After
examining successful international experiences, the WG recommends that a “Build, Operate
and Transfer” (BOT) model can also be applicable to Mongolia. Under this model, a strategic
partner and lead investor implements the system using existing technologies, makes the
necessary investments, operates the system as a concession for a number of years, after which
the system is turned over to the government, as negotiated in a contract. Advantages to the
government are minimal load on the budget, access to cutting-edge technologies and know-
how, and development of local human resources.
Recommendation 2: Establish a separate, joint-stock, commercially run company
Successful international experiences show this to be a common factor to foster inter-
government agency coordination and operate with relative independence from parochial
agency concerns and political influences. Thus, the WG recommends that such a separate
company be established.
Recommendation 3: Structure the new company as a private-public partnership (PPP)
The state has a role to play as a shareholder in the company but not as a controller. The GoM
also has the first real opportunity to use this experience as a pilot case for structuring
commercially viable PPPs in other sectors. Structuring such a venture will not be easy as many
issues in the legal and regulatory environment will need to be addressed. The experience and
lessons learned gained in such structuring will be very valuable for future PPP transactions.
Recommendation 4: After Parliament ratification, re-negotiate project loan from The Asian
Development Bank to modernize customs administration to allow partial use of the loan (i.e.,
equipment) to be valued as the GoM equity contribution in-kind to the new PPP company
As a first step, ratification of the loan agreement as it currently stands should be pursued in
Parliament as early in April as possible. Only after Parliament ratification, adoption of
recommendations 1 through 3, and the initial technical and financial feasibility analyses
outlined in the Action Plan (Exhibit III-1, Activity E1 and E2) are concluded, begin the
process of identification of assets and their valuation as GoM shares in the PPP company.

International precedent for this exist in the case of Ghana where the value of commodities
procured through a World Bank loan and supplied to the PPP company represented the equity
contribution of the government to the new company. Proceeds from potential revenues of the
company could then be used to pay back the loan and reduce the fiscal burden of debt service.
Recommendation 5: Identification and negotiations with potential strategic partner and
investor
During the course of preparation of the proposed National Program, the WG identified
successful international experiences, technologies and countries. Mongolia can benefit from
these experiences and proven technologies to shorten the implementation cycle. Mongolia
does not need to “reinvent the wheel” so to speak but seek access to these technologies and
operators and negotiate the best possible terms for the country. Thus, the WG recommends
that, after the decision to create an independent joint-stock, commercially-run PPP, the
company enter into negotiations with operators and investors who can provide access to the
technology, have the proven know-how, and the financial resources to make the
implementation of the SEWT concept successful.
Recommendation 6: Identification and attraction of Mongolian private sector investors with
complementary skills
The WG also recommends that the PPP to be-established make every effort to attract
Mongolian private sector investors who, besides capital, bring unique complementary skills to
the company. The Mongolian National Chamber of Commerce and Industry (MNCCI) as the
umbrella organization of businesses in Mongolia could be a representative shareholder of
private businesses but additional Mongolian firms should be identified and given the
opportunity to participate. This recommendation should be implemented after the first four or
five initial recommendations have been effected.
Recommendation 7: Conduct of public education campaign and dialogue on the concept and
experiences in implementation of single windows
The WG recommends that a public education campaign using selected mass media (newspaper
articles and briefings, TV and radio presentations, etc.) be initiated to educate decision makers
and the general public on the issue and gain understanding and support for the concept. The
campaign should be targeted to different constituencies or groups as identified in the proposed
action plan to implement the National Program. Some elements of this public education and
national dialogue campaign can be coordinated with those of the program on one-stop local
licensing services pilot project currently being implemented with Swiss cooperation.
Recommendation 8: Identify changes in legal and regulatory environment to facilitate
implementation of single electronic window concept
Once decisions have been made on the business model and structuring of a joint-stock,
commercially-run PPP company, a legal review of existing laws and regulations needs to be
initiated as soon as possible. This legal review should focus, inter alia, on the following:
• Review of the proposed existing draft law on customs to insure enabling of
implementation of the single electronic window for trade
• Review of existing draft on a concessions law initially developed to help finance
physical infrastructure projects and provide an adequate legal and regulatory framework
for BOT and BOO (“Build, Operate and Own”) among others
• Expedite current review of existing laws and regulations on e-commerce and electronic
transactions within the framework of current efforts to implement e-Government

• Review of legal and regulatory mandate of participating agencies in order to simplify
processes, avoid duplication, and overlapping responsibilities
• General review of existing laws and regulations to enable adequate operations of
electronic windows.

INTRODUCTION
While the scope of foreign trade in the world is expanding, the needs for simplification of
trade-related regulations and procedures, reduction of processing steps, document
harmonization and simplification, improvements in transparency and acceleration of
information exchange are increasing.
Trade facilitation attracted major attention in the 1996 WTO meeting in Singapore and has
become a center pillar of the WTO agenda since the 2003 meeting in Cancún, Mexico. Many
countries have recognized the importance of trade facilitation as a means for integration into
the world economy and have implemented new initiatives to achieve it. Among these
initiatives, countries have selected “a single electronic window” to facilitate trade as one of the
most effective means. Over 30 countries have implemented such measures.
A single window for trade facilitation can play a significant role for Mongolia, as it is a
landlocked country with sparse population. Mongolia can significantly increase its
competitiveness in regional and world markets by eliminating obstacles to trade in imports,
exports and transit of goods.
Aware of the need to facilitate trade and improve country competitiveness, the Government of
Mongolia issued Resolution No 251 of October 18, 2006 to establish a single electronic
window to facilitate foreign trade. This document has been prepared as a National Program to
implement such facility window, as agreed during the WG meeting of 18 December 2006.
The concept of a single electronic window for trade is relatively new in Mongolia. Thus,
Section I of this document examines the concept, benefits, models, successful international
experiences and requisites for success. This section borrows heavily from Recommendation
No. 33 of the United Nations Centre for Trade Facilitation and Electronic Business on
establishing a single window for trade facilitation.1
1
United Nations Centre for Trade Facilitation and Electronic Business. “Recommendation and Guidelines on establishing a
Single Window to enhance the efficient exchange of information between trade and government, Recommendation No 33.”
United Nations. 2005.

SECTION I: CONCEPT OF A SINGLE WINDOW FOR TRADE FACILITATION
A. What is a single window for trade facilitation?
In order to comply with all import, export and transit related requirements, companies
involved in trade have to submit many different kinds of documents to several governmental
authorities each of which has its own procedure, steps and electronic or paper forms to
complete. These intensive requirements together with their associated compliance costs
represent a heavy burden on the government and business community.
To reduce this burden, countries are increasingly turning to establishing a single electronic
window to provide all parties involved in trade and transport to lodge standardized information
and documents in electronic form with a single entry point. Exhibit I-1 shows the typical,
complex, and inefficient procedures of the different agencies and parties involved in foreign
trade.
The procedures involve physical exchange of paper information with one another. In contrast,
as shown in Exhibit I-2, the single electronic window allows the exchange of information in
electronic form through a single entry point.
Exhibit I-I: Typical complex and inefficient foreign trade procedures
Adapted from Chawewan Kongcharoenkitkul 2006 Presentation on ASEAN SW

Participating agencies will have an opportunity for direct information sharing, for single
submission and synchronous processing of documents and for issuing of e-permit, e-license
and e-certificate. In turn, this will facilitate a transition from paper-based to paperless cross-
border trade, save time and effort to business, and increase government revenues.
At present over 30 countries, including South Korea, Singapore, Malaysia, Ghana, Finland,
Mauritius, Germany, the USA and others are implementing single electronic windows for
trade. The results in developed and developing countries are dramatic improvements in lower
transaction costs associated with trade operations, more transparency in government-business
relationships, increased customs revenues and an improved environment favorable to business
development and increased investment flows.
This has been the case in Singapore with its TradeNet system, its adaptation to Mauritius and
Ghana, the Korean KTNET system and its latest movement towards a U-trade platform, the
Malaysia e-Permit system, as well as other initiatives such as the pilot international single
window project between Thailand and the Philippines. These experiences speak of the
increased interest that countries have in promoting trade facilitation as a tool to accelerate
economic growth and reduce poverty through single window mechanisms.
Given the increased level of inquires from many countries, the UN Centre for Trade
Facilitation and Electronic Business in Geneva (UN/CEFACT) has developed a series of
recommendations and guidelines aimed at providing practical guidelines and recommendations
to countries for establishing foreign trade single window. Accordingly, a special Single
Adapted from Chawewan Kongcharoenkitkul 2006 Presentation on ASEAN SW
Exhibit I-2: Single electronic window: An organized network for the trading community

Working Group to establish a single electronic window for trade facilitation
Window Repository has been created to share best practices and present single window case
studies to make lessons learned and international best practices easily available for adaptation
to local conditions (http://www.unece.org/cefact/single_window/welcome.htm).
B. Benefits of establishing a single window
Benefits for the Government:
• Better harmonization of documentation and processes, elimination of duplication and
cutting of inefficient costs, time saving
• Improved risk assessment brought by enhanced information exchange
• Increased transparency, less corruption and bureaucracy
• Increased customs revenues and improved fiscal treasury function through more rapid
and accurate payment of required duties and other charges
• Reduction of any unintentional errors and increase of trader compliance through updated
information
• Enhanced border security by having more accurate information on cross-border cargos.
Benefits for business entrepreneurs:
• Savings in time and cost through one-time submission of documents and information
required for trade once through a single point
• Simplification of trade processes and elimination of duplications and overlapping
functions of agencies
• Reduction of errors with clearer information
• Reduced pressure with increased transparency and predictability
• Reduction of business risks through enhanced certainty
• Improved partnership trust, predictability, and intensified trade turnover through
reducing of delays
• Reduction in overall costs to business.
C. Models of implementation of the single window
UN/CEFACT International Trade Procedures Working Group (ITPWG/TBG15), in a review
of models of implementation in establishing a single window, distinguishes three basic models
currently in place or being developed:
The single authority model. In this example of implementation, one agency receives
information, either on paper or electronically, disseminates this information to all relevant
governmental authorities, and co-ordinates controls to prevent undue hindrance in the
logistical chain. Sweden’s single window operates this way. Its customs performs selected
tasks on behalf of some authorities (primarily for the National Tax Administration (import
VAT), Statistics Sweden (trade statistics), the Swedish Board of Agriculture and the national
Board of Trade (import licensing).
A single automated system for the collection and dissemination of information. Under this
model a public or private entity integrates the electronic collection, use, dissemination and
storage of data related to trade that crosses the border. For example, the United States has
established a program that allows traders to submit standard data only once and the system
processes and distributes the data to the agencies that have an interest in the transaction. This
system can be an integrated system—data are processed through the system—an interfaced
decentralized system—data are sent to the agency for processing—or a combination of these
two systems.
National program to establish a single electronic window for trade facilitation Page I– 3

An automated information transaction system. Under this model, a trader can submit electronic
trade declarations to the various authorities for processing and approval in a single application.
In this approach, approvals are transmitted electronically from governmental authorities to the
trader’s computer. Such a system is in use in Singapore and Mauritius. Moreover, in the
Singaporean system, fees, taxes and duties are computed automatically and deducted from the
traders' bank accounts. When establishing such a system, consideration should be given to the
use of a master dataset, which consists of specific identities, which are pre-identified and pre-
validated in advance for all relevant transactions.
However, before considering these models, it is important to point out that:
• Although many business and trade practices are common to all countries, each country
will also have its own unique requirements and conditions;
• A single window should represent a close cooperation between all involved
governmental authorities and agencies, and the trading community;
• A single window does not necessarily imply the implementation and use of high-tech
information and communication technology (ICT), although facilitation can often be
greatly enhanced if Governments identify and adopt relevant ICT technologies for a
single window.
D. Lead agency of a single window
The appropriate agency to lead the establishment
and operation of a single window can vary from
country to country depending on legal, political
and organizational issues. The lead agency must
be a very strong organization with the necessary
vision, authority (legal), political backing,
financial and human resources and interfaces to
other key organizations. In some cases, because of
their pivotal role, the information and
documentation they receive, Customs or port
authorities can be the agency best suited to lead a
single window development and implementation.
However, the lead organization does not
necessarily have to be a governmental
organization; it can be a private entity such as a
Chamber of Commerce or a semi-state
organization such as a Board of Trade. However,
private organizations sometimes lack the legal
authority to issue and accept information and
documents and the power to enforce rules. Therefore, in such a scenario, it may be necessary
for the private organization to seek the explicit formal support of a governmental organization
that has such power at its disposal.
One example of a public-private partnership that led to the establishment of a single window
was the Mauritius Network Services Ltd, in Mauritius. This is a tripartite joint-venture
company involving public and private sector representatives and a foreign technical partner.
Ghana followed the Mauritius model and implemented it successfully as shown in the text box.
The WG recommends that this model be structured in Mongolia: a private-public partnership
(PPP) where the government equity can be negotiated as in-kind contributions of equipment
procured through the customs modernization loan from The Asian Development Bank (ADB),
Page I– 4 National program to establish a single electronic window for trade facilitation
GHANA PRIVATE-PUBLIC PARTNERSHIP
MODEL FOR SINGLE ELECTRONIC WINDOW
Established in 1999 as the country’s first private-
public partnership (PPP), its single electronic
window is operated by GCNET with an initial
capitalization of $5.3 million, its shareholders
include:
• Customs, 20% equity, in equipment, provided
through a World Bank loan
• Ghana Shippers Council, 10%
• Two local Ghanaian banks, 10%
• Societé Générale de Surveillance SA, 60%, per
government request.
Results:
• Customs revenues increased over 30 percent in
first year
• Customs review down to 15 minutes
• Bank payments take 10 minutes
• Operation is profitable and self sustaining;
additional capitalization of $2.3 million made in
2002 to upgrade and expand the system
• Significant increase in trade activities
• Became model for PPPs.

MNCCI and private Mongolian investors (potentially banks, shipping companies, etc.) are
attracted as shareholders and a strategic foreign investor provides the bulk of the equity and
acts as the operator through a Build, Operate and Transfer (BOT) concession model.
E. Success factors
Review of international experience in the implementation of a single electronic window for
trade shows common factors that impact on success:
Political will. The existence of strong political will on the part of both government and
business to implement a single window is the foundation stone upon which all the other
success factors have to rest.
Strong lead agency. A strong, resourceful and empowered lead organization both to launch the
project and see it through its various development stages is required. This organization must
have the appropriate political support, legal authority, human and financial resources, and links
with the business community. In addition, it is essential to have a strong individual within the
organization who will be the project champion.
Partnership between government and trading community. A single window is a practical
model for co-operation between agencies within government and also between government
and the trading community. It presents a good opportunity for a public-private partnership in
the establishment and operation of the system. Consequently, all participating agencies should
be invited to cooperate in all stages of the project, from the initial development of project
objectives, situational analysis, and project design through to implementation. The ultimate
success of the single window will depend critically on the involvement, commitment and
readiness of these parties, to ensure that the system becomes a regular feature of their business
process.
User friendliness and accessibility. Comprehensive operating instructions and guidelines
should be created for users. A Help Desk and user support services, including training, should
be established, especially in the early implementation phase of the project. The Help Desk can
be a useful means for collecting feedback information on areas of difficulty and bottlenecks in
the system and this information can be a valuable tool in its further development. It is essential
that the design of the system be attuned to the real ICT capacities of the country or region in
which it will operate. Bearing in mind potential future technological developments, the system
should aim for a maximum number of users to utilize the single window from the moment it is
launched.
Legally-enabling environment. Establishment of the necessary legal environment is a pre-
requisite for single window implementation. Related laws and legal restrictions must be
identified and carefully analyzed. Changes in legislation can sometimes be required in order to
facilitate electronic data submission/exchange and/ or an electronic signature system. Further,
restrictions concerning the sharing of information among authorities and agencies,
organizational arrangements for the operation of a single window as well as power and
authority of a lead agency may need to be regulated.
International standards and recommendations. The implementation of a single window
generally entails the harmonization and alignment of the relevant trade documents and data
sets. In order to ensure compatibility with other international systems and applications, these
documents and data models must be based on international standards and recommendations.
This is true even if the single window is designed to operate without using electronic data
communications. Whenever electronic data interchange is involved, the harmonization,
simplification and standardization of all data used in international trade are an essential
National program to establish a single electronic window for trade facilitation Page I– 5

requirement for smooth automatic operation of the single window. The harmonization of data
used by different participants in their legacy system can be one of the biggest challenges for
automated single window implementation.
Financial model. A decision on the financial model for the single window should be reached
as early as possible in the project. This could range from a system totally financed by
government (e.g. the Netherlands) to an entirely self-sustainable model (e.g. Mauritius and
Ghana). Also, possibilities for public-private partnerships should be explored, if this is deemed
a preferred approach. Clarity on this point can significantly influence decision-makers to
support the implementation of the system.
Payment possibility. Some single windows (e.g. Thailand) include a system for payment of
government fees, taxes, duties and other charges. This can be a very attractive feature for both
government and trade, and is especially important when the system is required to generate
revenue. However, it should be noted that adding payment features often requires a
considerable amount of additional work with harmonization and especially the security of
financial transactions.
Promotion and marketing. Promotion of the single window is important at all stages of its
development. This will assist in improving knowledge of all participating agencies, attracting
investors and will help potential users to plan their related operations and investments
according to this schedule.
Communication strategy. Establishing a proper mechanism for keeping all stakeholders
informed on project goals, objectives, targets, progress (and difficulties) creates trust and
avoids the type of misunderstanding that can lead to the undoing of an otherwise good project.
Within this context, it is extremely important to handle stakeholders’ expectations properly.
Solving simple practical problems can generate significant goodwill to carry the project
through difficult patches along the development path.
Page I– 6 National program to establish a single electronic window for trade facilitation

SECTION II: RATIONALE OF THE NATIONAL PROGRAM
A. Need for Mongolia to establish a foreign trade single window
According to a World Bank survey in 2005 Mongolia was ranked 131st
in exports and 150th
in
imports value among 180 countries. Although the country has a small share relative to world
markets, Mongolia’s foreign trade is expanding rapidly and its importance in the national
economy is growing. As of 2005 Mongolia had trade relationships with 98 countries and total
trade turnover was $2.2 billion, equivalent to 153 percent of GDP. In 2005 in terms of
destination markets, Mongolia exported products to 69 countries including Asian countries
(56.7%), the American continent (25.9%) and European countries (16.1%). Mongolia imported
goods originating from 91 countries including European countries (48.7%) and Asian
countries (44.5%).
A total of 32,870 export customs clearances and 79,860 import customs clearances were
processed in Mongolia in 2005. There are about 560 private enterprises actively engaged in
foreign trade operations out of which 135 are active exporters and 327 are active importers.
Additionally, there are more than 50 registered freight forwarders and the same number of
accredited laboratories in Mongolia.
Mongolia holds an impressive position under the World Bank’s 2006 Doing Business Report;
it is ranked 45th
out of 175 countries rated in the overall ease of doing business indicator. This
superior performance underscores the significant advances that the country has made over the
last decade. Indeed, Mongolia has achieved strong marks vis-à-vis its regional neighbors in six
of the ten categories measured in the World Bank’s Doing Business rankings (see Table No.1).
A below average position was only observed for the Hiring and Firing, Paying Taxes, Trading
Across Borders and Closing a Business indicators. But within these indicators, Mongolia’s
performance is the worst within the region, and one of the worst in the world—at position
162nd
from 175 countries—for the “trading across borders” indicator under the Doing Business
Report.
Mongolia’s landlocked position, sparse
population, small economy and underdeveloped
infrastructure represent significant challenges
to the development of a vibrant and competitive
enterprise sector. To compensate at least
partially for the natural barriers that Mongolian
and foreign firms operating in the country are
facing, there is a need for Mongolia to establish
a sound trading environment aimed at
facilitating trade, improving firms’
competitiveness, attracting foreign direct
investment and leveraging transit trade for
rapid economic development to increase
economic opportunities for the population.
Therefore, addressing the serious shortcomings in trading across borders indicator through
trade facilitation reforms and the establishment of innovative mechanisms such as the single
window for trade, represents an important step toward business development, economic
growth and poverty reduction in Mongolia. To be successful, a concerted effort that includes
both the public sector and the private sector in Mongolia will add to the sustainability and
effectiveness of a sound trading environment in the country.
Table No.1
Doing Business
Indicator
Mongolia’s
Global Rating
Mongolia
Regional
Position**
Ease of Doing
Business
Starting a Business
Dealing w/ Licenses
Hiring & Firing
Registering a Property
Getting Credit
Protecting Investors
Paying Taxes
Trading Across Borders
Enforcing Contracts
Closing a Business
45
55
34
61
17
65
19
56
162
41
115
7
8
8
14
3
7
4
12
23
3
13
** Compared to 23 countries in the East Asia & Pacific
region

In recent years the Mongolian government has been very active in the area of trade facilitation.
One clear proof of this has been establishment of the legal framework for the operation of
“one-stop-service” aiming at reducing the steps in the issuance of local permits, licenses and
registration by passing the Government Resolution No. 35 of 2002 and Resolution No. 134 of
2004 accordingly. Based on these resolutions, with the purpose to support business and attract
investment the MoIT and its affiliated agencies, GDNT, SSIA and other agencies have
introduced one-stop service.
Moreover, in the Action Plan 2004-08, the Mongolian Government committed itself to
supporting economic growth through active trade policy reform. A new Customs Law and
Customs Tariff Law have been drafted and are undergoing discussion which will allow MCGA
to align customs legal environment to the international best practices, identify tariff and non-
tariff policies properly, implement customs clearance procedure for the economic benefits;
apply modern technologies for customs inspection to ensure fast and efficient service.
Additionally, Mongolian authorities have adopted an e-Government initiative aimed at
enhancing national competitiveness and improving the quality of public services through the
establishment of efficient, effective, systematic and productive government services.
Notwithstanding these efforts, traders in Mongolia yet have to deal with multiple and complex
regulations and trade-related procedures carried out through a large number of entities.
B. Current situation of participating agencies
There are 460 private companies currently involved in foreign trade in Mongolia. Government
is involved in foreign trade through six ministries, six government agencies and 240 local
branches and departments engaged in some 63 types of activities, including permits and
inspections. One non-government entity, the Mongolian National Chamber of Commerce and
Industry (MNCCI) provides certificates of origin.
The legal environment of foreign trade activities are regulated by over 100 laws, regulations,
procedures, inter-government treaties, international conventions and protocols including Laws
on Customs (in process of being redrafted), Law on Customs Tariff, Law on Excise Tax, Law
on Licensing, Law on Quarantine Inspection of Raw Materials and Products of Animal and
Vegetable Origin Crossing the Borders, Law on Standardization and Conformity Assessment,
Law on Chamber of Commerce and Industry, Law on Protection of the Environment, Law on
State Inspection and Control, Law on Border, Law on Food, Law on Firearms, Law on
Protection from Chemical Toxics and other regulations.
The MCGA, SSIA and MASM are in charge of inspection and control activities of exported
and imported goods crossing Mongolian borders, the MoIT, MFA, MoE, MoH, SSIA and
MNCCI provide appropriate licenses, permits and certificates for some goods. The MCGA is
in charge of collection of customs duties.
Use of information technology varies widely. For example, MoF, MoIT, MRTT, MCGA,
GDNT, MCGA and MNCCI are connected through fiber optical cable while SSIA, MoE and
MASM are connected to the internet through the government communication network but
their information technology infrastructure is inadequate.
Currently the MCGA uses GAMAS, an applications software developed locally. The system is
connected with 11 border and inland customs offices through fiber optical cable and satellite.
About 92% of total customs clearances are processed in those offices and account for 74% of
total revenue. One-stop service has been implemented in 5 freight customs inspection places in

Ulaanbaatar providing customs clearance, collection of duties and inspection processing at
single entry point. Declarants can make e-customs clearance by using GAMAS system or
through customs brokers. MCGA’s IT infrastructure is in need of modernization to improve
assessments at border points. Similarly, the logistics management systems to facilitate transit
of goods need substantial improvements.
Being connected to the MCGA through fibre optical cable it became possible for the MNCCI
to issue e-certificate of origin and use customs e-training software. If the SSIA is connected to
the MCGA network, it will be possible to connect it to the border ports by using the current
existing infrastructure. The WG has been established by these organizations to resolve this
issue.
The current weak cooperation among the border inspection organizations, inconsistency of
procedures and regulations, and operational red tape are main challenges for the public and
private sectors. Lack of necessary equipment and information for the specialized inspectors at
the border, inadequate solution of their social problems are the major obstacles for efficient
and sustainable operation.
MASM reports the existence of over 4,900 national standards in Mongolia, about 40 percent of
which are in compliance with international standards and a very small percent of which is
related to foreign trade. The agency needs to update its standards for commonly imported and
exported goods and bring them into compliance with international norms. Re-engineering its
internal processes for reviewing proposed standards and verification of export goods are high
on the agenda of agency priorities.
C. Favorable conditions for the program implementation
On October 18, 2006 the Government of Mongolia passed Resolution No 251 on the
establishment of a foreign trade single window and assigned the Minister for Finance to
regulate this work. According to the Decree of the Minister for Finance a working group led
by a chair of ICTA was established with the following members: Vice Minister for the MoIT,
Vice Minister for the MoE, Director of MCGA, Vice Director of SSIA, Chairman of the
MNCCI and Director of MASM. All members of the WG have recognized the urgent need to
establish a single window and have expressed their support for its implementation.
Recently the Government of Mongolia has agreed together with the ADB to implement the
customs reform project with $6.76 million funding and signed a new 3-year trade facilitation
program. The project will be financed jointly by the ADB, e-Asia and Knowledge Partnership
Fund and the Government of Mongolia and it will focus on identifying guidelines of the
modernization of customs, ensuring trade security, facilitation of foreign trade, improvement
of infrastructure at selected major customs houses and border posts, and institutional
strengthening. The ADB Board has approved the project and it is currently pending Parliament
ratification. The WG recommends that the Minister of Finance and Cabinet exercise their best
efforts to have Parliament ratify the loan as early as possible in the spring session of
Parliament. Once ratified, a preliminary technical and financial feasibility for the
establishment of the single window is concluded and an assessment of equipment needs and
valuation are performed under the customs project, the GoM should engage in negotiations
with ADB to enable it to use the equipment as contributions in kind towards government
equity as a shareholder in the PPP company that could be established to implement the single
electronic window.
Additionally, the MNCCI has recently started a project to connect to customs through a two-
kilometer fiber optic cable that will allow customs officials at the borders to confirm the
validity of Certificates of Origin issued by the Chamber.
National program to establish a single electronic window for trade facilitation Page II– 9

These recent efforts pave the way towards the establishment of a foreign trade single window
in the country. Nonetheless, effective trade facilitation will require a concerted effort involving
all key government trade-related agencies and the private sector.
Accordingly, there is a need to promote open forums bringing together all government
controlling agencies and the private sector stakeholders to discuss the government efforts in
promoting trade facilitation and in aligning Mongolian trade-related practices and procedures
to international best practices. To this end, the WG for the establishment of a single electronic
window will take the necessary actions needed to implement the project. The USAID funded
Economic Policy Reform and Competitiveness project (EPRC) has offered technical
secretariat services for the WG. This assistance should provide additional technical resources
for the successful implementation of the single window program.
D. Existing challenges
Challenges that need to be overcome in the process of establishing a single electronic window
in Mongolia include:
• Lack of knowledge among government officials and the general public on the concept
and advantages of a single electronic window, particularly concerning time, financial and
human resources, institutional framework, and legal environment
• Resource constraints and weak capacity in some government agencies that will require
significant financial resources, professional training, re-engineering of processes and
harmonization of procedures
• Lack of risk-based inspection guidelines as historical data are not used, resulting in an
onerous drain of human resources, at the agencies and high transaction costs to the
enterprise sector
• As new products are traded in international markets, MASM is struggling to adopt
appropriate quality and packaging standards as well as address slow and cumbersome
procedures currently in force for their review and adoption
• Most government agencies, including SSIA, MASM, MoE, and others lack the ICT
capabilities to interconnect with the Customs’ network system, limiting their effective
participation in the single electronic window; in effect, this requires that parallel efforts
be made for these agencies to improve their internal operating procedures as the Customs
moves forward with its modernization efforts
• The ICTA of Mongolia has developed an e-Mongolia Initiative under which specialized
IT core units are been established in each government agency but actual implementation
depends on the agency’s ability to obtain donor support given the scarce resources of
government
• Concepts like e-Certificate, e-License and e-Signatures are comparatively new for
Mongolia and there is a need to review the legal and regulatory framework, diffuse skills
in these areas, and train professionals in these areas
• Private sector exporters and importers feel relatively isolated from current government
activities to facilitate trade and efforts need to be made to increase their active
involvement.
Overall, however, the WG believes that a high level of political commitment, the creation of a
PPP company controlled by private sector shareholders and run as BOT concession with a
strategic foreign partner offers the best option. This model has been successful in international
practices and can be adjusted to specific Mongolian conditions.
Page II– 10 National program to establish a single electronic window for trade facilitation

SECTION III: NATIONAL PROGRAM TO ESTABLISH A SINGLE ELECTRONIC
WINDOW FOR TRADE FACILITATION
A. Goal and objectives of the Program
The goal of the National Program is to establish a single window for foreign trade facilitation
where all import, export and transit-related documents and information are lodged with a
single entry point which should create possibilities of single electronic submission and
processing of documentation and issuing e-permit, e-license, e-certificate for trade-related
government and private authorities, business community involved in trade, transport, storing
and financial services.
The objectives of the program are to:
1. Facilitate cross-border trade by moving to a paperless trade environment and increasing
Mongolia’s competitive participation in regional and world markets
2. Improve economic efficiency by reducing transaction costs, harmonizing agencies’
systems and procedures internally and in conformance with international standards
3. Enable Mongolia to link in the future with other countries and regional economic
cooperation organizations in an electronic trade environment
4. Develop a modern logistics management system for transit goods to compensate for
Mongolia’s landlocked status and take advantage of its geographic position
5. Improve transparency, fiscal revenues, controls, and reduce red-tape
6. Based on international best practices, develop and implement the first commercially-run
and financially self-sustained public-private partnership in Mongolia operated as a BOT
concession to serve as a model that can be replicated to finance infrastructure with
private sector participation to reduce the fiscal burden on the state budget and improve
efficiencies.
B. Scope of the Program
The following government and non-government agencies and private companies will
participate in the implementation of the National Program:
Government agencies:
• Ministry of Finance
• Mongolian Customs General Administration and its affiliated branches
• Mongolian Agency for Standards and Metrology
• State Specialized Inspection Agency
• General Department of National Taxation
• Ministry of Roads, Transport and Tourism
• Ministry of Environment
• Ministry of Health
• Ministry of Food and Agriculture
• Ministry of Justice and Internal Affairs
• Laboratories
Non-government agency:
• Mongolian National Chamber of Commerce and Industry
Private companies:

• Exporters
• Importers
• Freight forwarders
• Accredited private laboratories
• Transport carriers
• Customs brokers
• Logistics and others.
C. Principles of implementation
The WG has applied the following principles in the preparation of the proposed Action Plan to
implement the National Program:
1. Create and maintain a strong level of political commitment by:
a. Developing a communication strategy at the initial phase of the National
Program and implementing it carefully to raise awareness about the concept of
the single electronic window among participating agencies, government
decision makers, Parliament, and the general public
b. Organizing regular and frequent meetings for officers and technical staff of
agencies involved to provide opportunities for exchanging information and
solving common problems of implementation.
2. Awareness and application of current best international practice and technologies and
careful adaptation to specific Mongolian conditions by:
a. Harmonizing documentation, procedures, and information in compliance with
international standards and recommendations to meet the requirements of the
international system and partner countries
b. Using proven, tested technologies and models to shorten Mongolia’s
implementation cycle to establish the single electronic window for trade.
3. Minimize fiscal load of capital and recurrent operating costs and increase expected
efficiencies in implementing the single window by leveraging Mongolian and foreign
private investment through a PPP company.
4. Seek and negotiate with a strategic foreign partner to operate the PPP company on a
BOT basis.
5. Strengthen the PPP and create opportunities for Mongolian investors by:
a. Involving the private sector and potential investors from the beginning
b. Enlisting the participation of strategic Mongolian investors with unique skills.
6. Review, develop and maintain a legal and regulatory environment conducive to the
implementation of concessions and BOT to help finance needed infrastructure by
mobilizing private investment.
D. Action plan to implement the Program
Based on these principles, Exhibits III-1 and III-2 present the action plan to implement the
program. The action plan considers three phases of implementation:
1. Phase One: Preparations for the establishment of a single window (2007)
2. Phase Two: Structuring the private-public partnership company (2008)
3. Phase Three: Formal launch of the private-public partnership company (July 2008).

The definition of the phases is largely for conceptual purposes as some of the activities will
overlap the phases. Similarly, the timing of phases two and three is largely dependent on the
speed of implementation and completion of key milestones of prior phases and decisions on
the business model to implement the single window. For example, assuming that the concept
of a PPP is endorsed to operate on a BOT concession basis, the legal review and necessary
package of specific amendments would have to be submitted for Parliament’s consideration in
its fall session and Parliament would have to act on these. As discussion of the general budget
proposal takes place in the fall session of Parliament, it is difficult to predict if these measures
would be promulgated by then. As these are conditions precedent to structuring the company,
phase two would be delayed.
D1. Phase One: Preparations for the establishment of a single window (2007)
As shown in Exhibit III-1, this phase has five major groups of activities:
A. Elaboration and approval of National Program document
B. Development and implementation of a public communications and education campaign
C. Review and amendments to the legal environment and regulatory environment for trade
facilitation and single electronic window implementation
D. Information technology infrastructure needs assessment for MASM and SSIA
E. Conduct of preliminary technical and financial feasibility analyses to assess current
systems and procedures at participating agencies and resource requirements of the PPP
company.
The objectives of this phase are to:
• Determine roles and responsibilities of government and non-government participating
agencies and establish a mechanism for regulating cooperation
• Assess technical capacity of government and non-government participating agencies and
determine technical requirements
• Perform initial review of trade documents currently in use and determine needs for
harmonization
• Conduct needs assessment and requirements to align MASM’s standards with
international norms
• Create a favorable legal environment required for establishment of the single window
• Select the most effective business model giving due consideration to the establishment of
a separate PPP company run commercially and on a concession basis
• Implement a wide campaign of public education during the process of establishing the
single window to involve stakeholders, decision makers, and the general public.
D2. Phase Two: Structuring the private-public partnership company (2008)
Assuming Parliament promulgates the package of legal and regulatory measures to enable
better structuring and operations of concessions, BOT models, and electronic commerce in its
fall session, phase two can be initiated.
Major groups of activities of Phase Two, as shown in Exhibit III-2, are:
A. Conduct of a second-stage financial and technical feasibility analysis to provide more
detailed documentation of current systems and procedures at participating agencies and
estimation of initial capitalization requirements of the PPP company based on business
plan.
B. Legal structuring of the company including the formulation of legal options of
incorporation and registration.
National program to establish a single electronic window for trade facilitation Page III– 13

C. Enlist participation of selected Mongolian private investors who bring complementary
skills and resources to the PPP company.
D. Continuation of the campaign of public communications, education, and national
dialogue to keep decision makers and the general public informed and involved in a
transparent way about progress in the implementation of the single window.
The objectives of this phase are to:
• Get more detailed assessment of technical and financial requirements to prepare a
business plan for the PPP company, assuming all prior stages yield favorable results.
• Structure and register the PPP company with participation from Mongolian selected
private investors, MNCCI, and government shareholding with equity provided by the in-
kind contributions in equipment from the ADB loan.
• Secure the participation of a strategic foreign investor and operator to operate the PPP
company on a concession basis.
• Continue to inform, educate and involve all stakeholders, decision makers and the
general public in a transparent manner.
D3. Phase Three: Formal launch and operations of the PPP Company (July 2008)
As shown in Exhibit III-2 and assuming all prior stages have been completed satisfactorily, the
formal launch of the PPP company can be expected for early July 2008, before Parliament
ends its spring session and before the Naadam holidays.
As shown in the action plan for this phase and if all goes according to plan, the company is
expected to initiate operations in August or September 2008. At that time, the WG will have
concluded its tasks, issue a final report and dissolve. Management and implementation of the
single electronic window will be in the hands of the public-private partnership company, its
shareholders, and directors.
Page III– 14 National program to establish a single electronic window for trade facilitation

SECTION IV: RECOMMENDATIONS
This document has been prepared in response to the tasks given to the Working Group (WG)
to draft a proposed National Program to implement a single electronic window for trade
facilitation (SEWT). Based on analyses of international best practices, successful examples of
implementation of the SEWT in other countries and examination of Mongolia’s current
conditions, the WG proposes key recommendations for action, as follows:
Recommendation 1: Decision of the “business model” of entity to lead implementation
An early decision on the “business model,” i.e., what kind of entity will take the lead in
implementation of the concept is a key milestone that needs to be decided as early as possible.
Future alternative course of action or possibilities will derive from such decision. After
examining successful international experiences, the WG recommends that a “Build, Operate
and Transfer” (BOT) model can also be applicable to Mongolia. Under this model, a strategic
partner and lead investor implements the system using existing technologies, makes the
necessary investments, operates the system as a concession for a number of years, after which
the system is turned over to the government, as negotiated in a contract. Advantages to the
government are minimal load on the budget, access to cutting-edge technologies and know-
how, and development of local human resources.
Recommendation 2: Establish a separate, joint-stock, commercially run company
Successful international experiences show this to be a common factor to foster inter-
government agency coordination and operate with relative independence from parochial
agency concerns and political influences. Thus, the WG recommends that such a separate
company be established.
Recommendation 3: Structure the new company as a private-public partnership (PPP)
The state has a role to play as a shareholder in the company but not as a controller. The GoM
also has the first real opportunity to use this experience as a pilot case for structuring
commercially viable PPPs in other sectors. Structuring such a venture will not be easy as many
issues in the legal and regulatory environment will need to be addressed. The experience and
lessons learned gained in such structuring will be very valuable for future PPP transactions.
Recommendation 4: After Parliament ratification, re-negotiate project loan from The Asian
Development Bank to modernize customs administration to allow partial use of the loan (i.e.,
equipment) to be valued as the GoM equity contribution in-kind to the new PPP company
As a first step, ratification of the loan agreement as it currently stands should be pursued in
Parliament as early in April as possible. Only after Parliament ratification, adoption of
recommendations 1 through 3, and the initial technical and financial feasibility analyses
outlined in the Action Plan (Exhibit III-1, Activity E1 and E2) are concluded, begin the
process of identification of assets and their valuation as GoM shares in the PPP company.
International precedent for this exist in the case of Ghana where the value of commodities
procured through a World Bank loan and supplied to the PPP company represented the equity
contribution of the government to the new company. Proceeds from potential revenues of the
company could then be used to pay back the loan and reduce the fiscal burden of debt service.
Recommendation 5: Identification and negotiations with potential strategic partner and
investor
During the course of preparation of the proposed National Program, the WG identified
successful international experiences, technologies and countries. Mongolia can benefit from
these experiences and proven technologies to shorten the implementation cycle. Mongolia

does not need to “reinvent the wheel” so to speak but seek access to these technologies and
operators and negotiate the best possible terms for the country. Thus, the WG recommends
that, after the decision to create an independent joint-stock, commercially-run PPP, the
company enter into negotiations with operators and investors who can provide access to the
technology, have the proven know-how, and the financial resources to make the
implementation of the SEWT concept successful.
Recommendation 6: Identification and attraction of Mongolian private sector investors with
complementary skills
The WG also recommends that the PPP to be-established make every effort to attract
Mongolian private sector investors who, besides capital, bring unique complementary skills to
the company. The Mongolian National Chamber of Commerce and Industry (MNCCI) as the
umbrella organization of businesses in Mongolia could be a representative shareholder of
private businesses but additional Mongolian firms should be identified and given the
opportunity to participate. This recommendation should be implemented after the first four or
five initial recommendations have been effected.
Recommendation 7: Conduct of public education campaign and dialogue on the concept and
experiences in implementation of single windows
The WG recommends that a public education campaign using selected mass media (newspaper
articles and briefings, TV and radio presentations, etc.) be initiated to educate decision makers
and the general public on the issue and gain understanding and support for the concept. The
campaign should be targeted to different constituencies or groups as identified in the proposed
action plan to implement the National Program. Some elements of this public education and
national dialogue campaign can be coordinated with those of the program on one-stop local
licensing services pilot project currently being implemented with Swiss cooperation.
Recommendation 8: Identify changes in legal and regulatory environment to facilitate
implementation of single electronic window concept
Once decisions have been made on the business model and structuring of a joint-stock,
commercially-run PPP company, a legal review of existing laws and regulations needs to be
initiated as soon as possible. This legal review should focus, inter alia, on the following:
• Review of the proposed existing draft law on customs to insure enabling of
implementation of the single electronic window for trade
• Review of existing draft on a concessions law initially developed to help finance
physical infrastructure projects and provide an adequate legal and regulatory framework
for BOT and BOO (“Build, Operate and Own”) among others
• Expedite current review of existing laws and regulations on e-commerce and electronic
transactions within the framework of current efforts to implement e-Government
• Review of legal and regulatory mandate of participating agencies in order to simplify
processes, avoid duplication, and overlapping responsibilities
• General review of existing laws and regulations to enable adequate operations of
electronic windows.

National program single window eng 21 mar-07

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (7)

Semelhante a National program single window eng 21 mar-07

Semelhante a National program single window eng 21 mar-07 (20)

Mais de Bayar Tsend

Mais de Bayar Tsend (20)

Último

Último (20)

National program single window eng 21 mar-07