D.MandakhChairman

05-24-2010Ulaanbaatar

About AFCCP

Current situation of competition law and policy

Current situation of consumer protection law and policy

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.

First Deputy Prime Minister

ChairmanUnfair Competition Regulation Board

Board of Directors

Vice Chairman

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To maintain sustainableeconomic growth andimprove public well-beingthrough creating fair andfree competitive marketenvironment in theMongolian economy

To enforce the Prohibiting Unfair Competition andConsumer Protection laws in nationwide

To conduct inspections, to issue conclusions and to takemeasures in order to ban the activities of businessesregarding implementation of legislation in businessentities as well as individuals, whose conducts are harmfulto consumers’ life, health, wealth and environment

To receive and resolve the disputes and complaints relatedto unfair competition and consumer protection issues

To make product quality and safety test analysis byauthorized laboratories

To conduct inspections, issue conclusions regarding theactivities of individuals and business entities

To determine a business entity’s dominant or naturalmonopoly positions or loss of such positions

To control over the decisions by Government and localadministrative organizations that restricted competition

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

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…

Activities 2005 2006 2007 2008 2009 By April, 2010

Conductedinvestigation number

2 18 18 26 35 25

Conducted market studynumber

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

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

Market principles introduced to the economy

Freedom of choice allowed and supply increases

Thus, competition environment urged

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

First Stage Second Stage

•Comprehensive competition law between 1993-

2004

•No enforcement authority

•Since launching AFCCP from

2005

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

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.

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

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

Government resolution:#222 of the year 2004

Status: Government Regulatory Agency

Name of organization: ‘’Unfair Competition Regulatory Authority’’

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

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

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

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

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’.

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/

Case on milk products /false information on labeling/

Case on construction sector

Case on jewellery companies

To conduct a market study on consumer protection issues

To draft a projects on consumer protection and implement them

Thank you for your attention!!!