James Liotta, Partner, MAHONEY LIOTTA LAW FIRM
Could you introduce MahoneyLiotta to our international audience?
MahoneyLiotta was established in Ulaanbaatar in 1997 as one of the first law firms comprised of Mongolian and international lawyers. We see ourselves as a local firm and have worked with all major international law firms, banks, companies and non-governmental organizations regarding inbound investment and projects as well as outbound projects for our Mongolian clients.
What do you make of the government’s efforts to attract investors?
Unfortunately, the two main political parties in Mongolia tend to engage in big PR exercises without enough underpinning action. I think the key for any prospective investor is to talk with the private sector companies doing business in Mongolia, and not rely heavily on government PR.
The government should also define what it means by investment. When asked, there never seems to be an answer as to whether this means foreign investors incorporating and doing business in Mongolia, as was the case in the past, or more restricted to foreigners lending into Mongolia. As noted above, the key to attract investors once again will be a legislative ecosystem that incentivizes and protects investment into the private sector, as well as a demonstrated period of successful implementation of, and adherence to, the laws conducive for investment. Overall, I am optimistic and encouraged by the government’s pivot toward attracting investors once again. The investment and business community will do our best to help them to achieve that goal.
Do you have a final message to share with our readers?
As with any jurisdiction, investors need to do their due diligence before making decisions. I have seen too many people skipping this part because they were in a hurry to come here and get that contract, or because they think they know somebody who is connected and can get things done, or because they had a good meeting with a government official during a promotional conference. Mongolia is workable, the people are welcoming especially to Western businesses, and there is no doubt about the country’s minerals potential.
Dunnaran Baasankhuu, Managing Partner, DUNNARAN + PARTNERS
Could you elaborate on Dunnaran + Partners’ areas of expertise?
Our foundational expertise lies in minerals law, which distinguishes us from local law firms. However, the cyclical nature of the mining industry led us to diversify our legal practice. Since 2014, we have been advising clients on their employment and industrial relations matters, which has become one of our key practice areas today. In addition, our expertise also encompasses investment and corporate law. We also assisted oil and gas players in the market successfully raising funds on LSE and ASX. Another area that differentiates us from other foreign investment law firms in Mongolia is that we do litigations. This would indicate that our firm provides clients with full legal services, except for tax and felony criminal matters. How has the change in the employment law in 2022 impacted the minerals sector?
The change affected, among others, roster agreements, mandating two weeks on and two weeks off arrangements for mining companies. This shift has caused significant financial burdens and management related regulatory challenges. Given Mongolia´s workforce deficiency, the country heavily relies on foreign workers for mining. Previously, companies commonly applied a 28-day on-site and 14-day off arrangement. The new 14-14 has forced companies to introduce additional shifts and employ more people. Bringing expats from around the world only to let them return after two weeks is, naturally, disruptive.
What are the areas of improvement in the legislative framework of the mining industry?
Mongolia has all necessary legislation on paper, but the challenge is their application and enforceability, mainly due to inconsistent interpretation and application of laws by government officials. Do you have a final message?
Mongolia has significant untapped potential for minerals and is situated in a strategic location next to the world´s largest buyer market in terms of minerals. Mongolia faces its share of challenges like any other country, but those are not deal-breaker matters. These issues can be navigated and resolved in the hands of the right professional advisors.