Global Investment Firm Cerberus Acquires Stake in Certain MCS Group Companies www.mcs.mn

ULAANBAATAR, MONGOLIA and NEW YORK – 24 August 2020 – MCS Group (“MCS” or the “Company”), which consists of over 20 companies operating in various sectors such as energy, engineering, mining, real estate, telecommunications, and consumer goods, today announced that it has completed a transaction with an affiliate of Cerberus Capital Management, L.P. (“Cerberus”), a global leader in alternative investing. An affiliate of Cerberus has acquired approximately 20% indirect ownership or notes convertible into equity of seven MCS companies operating in the telecommunications and consumer goods sectors.

Founded in 1992, Cerberus manages $45 billion in assets across more than 20 offices around the world. As a long-term investor, Cerberus has a track record of partnering with global companies across sectors, bringing industry-leading operating and technology capabilities and financial expertise to help businesses drive innovation and achieve sustainable growth. Cerberus’ frontier markets platform, Cerberus Frontier, is at the forefront of private investing in some of the world’s fastest growing economies across Asia and Africa. Cerberus Frontier leverages a global platform, in-country presence, and hands-on portfolio management for growing companies in dynamic economies.

Over the past twenty years, MCS has successfully partnered with many foreign investors and brands, introducing new technologies and know-how to the local market as well as adopting international standards of compliance and social responsibility. Odjargal Jambaljamts, Chairman of MCS Group, said, “This partnership will strengthen our financial position and enable us to leverage Cerberus’ operational experience, technology resources, and global best practices as we accelerate MCS’s growth plans. We look forward to working with the global Cerberus team to build on our strengths and market leadership to create an international-calibre Mongolian company, which is an important step as we evaluate future opportunities for a public listing on the domestic and international exchanges.”

Alexander Benard, Co-Head of Cerberus Frontier and Senior Managing Director, commented, “We have an extensive history in Mongolia and are excited about our new partnership with MCS. With Mongolia’s dynamic economy and strong consumer trends, we believe there are many opportunities for MCS’s fast-growing telecommunications and consumer goods businesses. We look forward to bringing our global best practices and industry-leading operating capabilities to help these businesses achieve further success.”

The transaction will not impact the continuity of the businesses or collaboration with MCS’s existing partners. Together with Cerberus, the Company will continue growing its businesses, meeting international standards, and focusing on social responsibility and sustainable growth.

About MCS

Established in 1993, MCS has over 20 subsidiaries involved in energy, engineering, IT, telecommunications, property, mining, consumer goods and healthcare sectors. For more information on MCS Group, visit our website at www.mcs.mn.

About Cerberus

Founded in 1992, Cerberus is a global leader in alternative investing with over $45 billion in assets across complementary credit, private equity, and real estate strategies. We invest across the capital structure where our integrated investment platforms and proprietary operating capabilities create an edge to improve performance and drive long-term value. Our tenured teams have experience working collaboratively across asset classes, sectors, and geographies to seek strong risk-adjusted returns for our investors. For more information about our people and platforms, visit us at www.cerberus.com.

Media Contacts

MCS

Media and press office

Solongo.b@mcs.mn

+976 77778833

Cerberus

Ronald Low / Genevieve White

Sard Verbinnen & Co.

rlow@sardverb.com / gwhite@sardverb.com

+852 3842 2200

What is Article 6.2 and why is there a controversy regarding it in Mongolia? www.medium.com

There is this controversy going on the amended Article 6.2 of the Constitution of Mongolia. The previous Article 6.2 stated:
The land, except that in private ownership of the citizens of Mongolia, as well as the land subsoil, forests, water resources, and fauna shall be the property of the State.
Last year there were several Amendments to the Constitution. The controversy stems from one additional word in the Article 6.2:
The land, except that in private ownership of the citizens of Mongolia, as well as the land subsoil, forests, water resources, and fauna shall be the common property of the State. (my translation)
Last year, several small parties capitalized on one word to make protests. They allege that changing from property of the state to the common property of the state, the big parties are trying to sneak in new provisions of the law. They would use this Article to allow foreign companies and other entities to privatize the land.
In Mongolia a foreign person/company cannot own the land, they can lease or get permission for exploration/extraction of minerals. I wrote in more detail here:
How is land allocated to Mongolian citizens?
The legal scholars on the other hand point out that the protests do not make sense as the next article clearly states that only citizens of Mongolia can own land. The word common comes from the 1996’s Law on State and Local State Properties (Төрийн болон орон нутгийн өмчийн тухай хууль). There is a distinction in terminology between State common property(Төрийн нийтийн өмч)and State property (Төрийн өөрийн өмч)
State common property- all the land, mineral resources etc., are the property of the people and is managed by the state.
State property, on the other hand, is the state property, such as, government buildings, state companies etc.
The reason these two are differentiated is because the state property, such as, state companies can be sold, rented etc. They can be sold to Mongolian or foreign companies. That is not the case with the State Common Property.

Kuwait is running out of money to pay public salaries www.rt.com

Kuwait is running out of money for the salaries of public servants and will have no money to cover these after November, the country’s finance minister told parliament.
Unless oil prices rise, the money being used now, withdrawals from the General Reserve Fund, will simply be depleted, Middle East Monitor reports, citing the official, Barak Al-Sheeran.

US FDA announces emergency authorization for convalescent plasma to treat Covid-19 www.cnn.com

(CNN)The US Food and Drug Administration issued an emergency use authorization for the use of convalescent plasma to treat Covid-19 on Sunday, saying the "known and potential benefits of the product outweigh the known and potential risks of the product."

The FDA said more than 70,000 patients had been treated convalescent plasma, made using the blood of people who have recovered from coronavirus infections.
"Today I am pleased to make a truly historic announcement in our battle against the China virus that will save countless lives," President Trump said at a White House briefing. "Today's action will dramatically increase access to this treatment."
Last week, Trump accused some health officials of playing politics regarding an EUA for convalescent plasma. When asked about the FDA not having granted an EUA, Trump said the reason was political.
On Sunday, a source who is close to the White House Coronavirus Task Force told CNN the FDA had reviewed additional data to inform its impending EUA decision. This official has not personally reviewed the data. They added the FDA is under no obligation to consult anyone outside the agency about its decision.

Convalescent plasma is taken from the blood of people who have recovered from Covid-19. At the end of March, the FDA set up a pathway for scientists to try convalescent plasma with patients and study its impact. It has already been used to treat more than 60,000 Covid-19 patients.
However, like blood, convalescent plasma is in limited supply and must come from donors. And while there are promising signals from some studies, there is not yet randomized clinical trial data on convalescent plasma to treat Covid-19. Some of those trials are underway.
Impact of an EUA
The New York Times reported last week an FDA emergency use authorization for blood plasma to treat Covid-19 was on hold after NIH officials intervened. The hold came after a group of federal health officials -- including National Institutes of Health Director Dr. Francis Collins, National Institute of Allergy and Infectious Diseases Director Dr. Anthony Fauci and Dr. H. Clifford Lane, NIAID deputy director -- stepped in to argue the emerging data on the treatment was too weak, the Times reported Wednesday, citing two senior administration sources.

In a response to CNN, Dr. Anand Shah, FDA's deputy commissioner for medical and scientific affairs, said he couldn't comment but suggested the NIH was out of line.
"In general, NIH is not involved in the decision-making process at the FDA and does not have the entirety of confidential data the FDA uses to make these regulatory decisions," Shah said in a statement sent to CNN.
"We take seriously our mandate to follow the data and science on the review of medical products to prevent or treat COVID-19 based on the agency's established legal and regulatory standards," Shah added, saying the FDA appreciated the work of NIH and would collaborate with its sister agency.
A senior administration official told CNN's Jim Acosta on Sunday the expected emergency use authorization announcement is an important development.
"If you're one of the 35 people out of a hundred who survive severe COVID symptoms because of convalescent plasma, this is certainly a breakthrough," the official said.
"And it's certainly an advancement that over a 5 month period during a pandemic we've got safety data based on 70,000 COVID patients treated with convalescent plasma," the official added.
Ben Corb, public affairs director for the American Society for Biochemistry and Molecular Biology, said in a statement the President was showing an "unwillingness" to listen to medical experts, and that "breakthroughs require the collection of data" to ensure safety and efficacy of treatments.
"This process is necessary to ensure our safety, and to ensure that a treatment isn't worse than the disease," Corb's statement read. "I am deeply concerned by this action, and concerned about the timing."
Demand for plasma 'exceeded anyone's expectation'
Emergency use authorization from the FDA does not require the same level of evidence as full FDA approval, but it can have a significant effect on demand and use of a treatment during a public health emergency.
Dr. James Musser, chair of the Department of Pathology and Genomic Medicine at Houston Methodist, said an emergency use authorization could simplify giving convalescent plasma to Covid-19 patients.
"If they do issue an EUA, my opinion is that that is a good thing for patients going forward," said Musser, who has studied convalescent plasma in Covid-19 patients. "But once again, that is really going to depend up on the parameters of the EUA."
An EUA, which could open the treatment to more patients, could also have the effect of limiting enrollment in clinical trials that determine whether it's effective.

On Thursday, Dr. Janet Woodcock, director of the FDA's Center for Drug Evaluation and Research, said that doctors have treated so many Covid-19 patients with convalescent plasma, it has been difficult to figure out if the treatment works.
"The problem with convalescent plasma is the great enthusiasm about it," Woodcock said in an online conversation about the latest science behind monoclonal antibody treatments and convalescent plasma. "It exceeded anyone's expectation as far as the demand."
Woodcock, who has shifted to lead therapeutic efforts under the Trump administration's Operation Warp Speed, said plasma has shown some promise in early studies, but said Thursday there is still not yet enough evidence that it works.
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Her team counted 162 prospective studies and several more observational studies, but she said only six met the standard that could produce actionable results. There is no randomized clinical trial data yet, she said, but some of those trials are ongoing.
"We continue to have hints that this is an effective treatment in this particular virus," Woodcock said, adding that the NIH will initiate or boost additional trials to find out for sure, she said.
Even if this approach does work, convalescent plasma has limitations.
"There's a limited donor pool -- it goes away as an epidemic wanes," Woodcock said. "It is not a standardized intervention and requires a blood type match for administration, which can be problematic in many settings."
CNN's Jim Acosta, Elizabeth Cohen, Jen Christensen and John Bonifield contributed to this report.

Mongolia reports 5 more COVID-19 recoveries www.xinhuanet.com

Mongolia reported five more COVID-19 recoveries, bringing its total recoveries to 288, country's National Center for Communicable Disease (NCCD) said Saturday.

Vidit, Humpy lose as India held by Mongolia in Chess Olympiad www.mykhel.com

Chennai, Aug 22: India was held to a 3-3 draw by lower-ranked Mongolia in the sixth round as favourites China grabbed the top spot in Pool A in the FIDE Online Chess Olympiad on Saturday.
After posting wins over Indonesia (4.5-1.5) and Iran (4-2) in the fourth and fifth rounds respectively, the Indians could not put it across Mongolia. Defeats for captain Vidit Santosh Gujrathi and world rapid champion Koneru Humpy meant India suffered a setback in the quest for a sixth successive victory. Also, R Vaishali lost to Tuvshintugs Batchimeg to enable Mongolia hold India to a creditable draw. China had also faced a tough time before overcoming the challenge of Mongolia 3.5-2.5 in the fourth round. However, the Chinese bounced back strongly with convincing wins over Georgia and Germany in the next two rounds, to replace India at the top of the table with 12 points. India is second with 11 points and Germany in third place with nine. Former world champion Viswanathan Anand, who made his first appearance in the third round and was held to a draw by Nodirbek Abdusattorov, settled for half a point in the game against Indonesian Susnato Megaranto in the fourth round. In the fifth round, Anand went down to Parham Maghsoodloo even as India won 4-2 thanks to wins by P Harikrishna, D Harika and Vantika Agrawal, while Humpy and Nihal Sarin settled for draws. India, with an average rating of 2419, is seeded seventh in the championship. The Olympiad is being played online owing to the COVID-19 pandemic. The event has a different structure with each team comprising six players, including at least two women. Results: Fourth round: India beat Indonesia 4.5-1.5 (Viswanathan Anand drew with Susanto Megaranto; Vidit S Gujrathi beat Farid Firman Syah; D Harika drew with Irine Kharisma Sukandar; Bhakti Kulkarni beat Medina Warda Aulia; R Praggnanandhaa beat Gilbert Elroy Tarigan; Vantika Agrawal drew Ummi Fisabilillah). Fifth round: India beat Iran 4-2 (Viswanathan Anand lost to Parham Maghsoodloo; P Harikrishna beat M Amin Tabatbaei; Koneru Humpy drew with Sarasdat Khademalsharieh; D Harika beat Anousha Mahdian; Nihal Sarin drew with Aryan Gholami; Vantika Agrwal beat Anahita Zahedifar). Sixth round: India drew Mongolia 3-3 (Vidit Gujrathi lost to Sumiya Bilguun; Aravindh Chithambaram beat Gombosuren Munkghal; K Humpy lost to Bathkuyag Muguntuul; R Vaishali to Tuvshintugs Batchimeg; R Praggnanandhaa beat Dambasuren Batsuren; Divya Deshmukh beat Davaakhuu Munkzhul).

Mongolia Country Situationer www.adnasia.org

On paper, Mongolia looks like a country that would have trouble with Covid-19. It is a small, developing country with just over 3 million people, most of whom live in its capital, Ulaanbaatar. Though its population is scant (a little over 3 million), it is locked in place by Russia to the north, and by China everywhere else. Both of its powerful neighbors have struggled with the pandemic: China, the epicenter, had resorted to drastic restrictions to stem the outbreak, while Russia’s response has been slow, marred by lack of transparency. But to date, Mongolia hasn’t seen community transmission of Covid-19, and its cases have yet to surpass 300. None have died yet from the infection.

Mongolia, China triumphant in FIBA U17 Skills Challenges www.fiba.basketball

MIES (Switzerland) - The FIBA U17 Global Skills Challenges concluded on Sunday, with China and Mongolia claiming the top honors for an impressive Asian double in the first-time event.

Mongolia-U.S. relations: One of the most underrated partnerships www.moderndiplomacy.eu

It has been exactly nine years since former U.S. Vice President Joe Biden visited Mongolia. Mr. Biden’s visit to the only functioning democracy in the entire Eurasia signaled strong moral support from the US. To mark the importance of his historic visit, Mongolians gifted a horse to Mr. Biden whom he called “Celtic.” It was an auspicious choice because Mr. Biden recently also picked Celtic as his new Secret Service codename.

During his visit, Mr. Biden remarked that Mongolia is “an emerging leader in the worldwide democratic movement and a close friend and partner of the United States.” In this time of global democratic recession, the role of Mongolia is becoming more important than ever. As the only steadfast democracy in the entire region, Mongolia still serves as a proof that democracy can flourish in this part of the world.

Mongolians know that democracy does not come cheaply. Starting from 2003, over 17,000 Mongolian military personnel have served in Afghanistan and other global hotspots alongside with the US and NATO forces. Through risking their lives, our soldiers have proved Mongolia’s commitment to global peacekeeping and counterterrorism. Throughout these deployments Mongolian military personnel have improved their interoperability with the US and other international forces for peacekeeping missions.

When the Trump Administration invited President Battulga to Washington for a historic visit in July 2019, our bilateral relations was elevated to the strategic partnership level. Both Democrats and Republicans have warmly welcomed us on the Capitol Hill. This was proof that our two countries have grown stronger and closer based on common strategic interests, shared democratic values, and principles of sovereignty. Achieving tangible results from this partnership should be the priority of both our nations’ leaders.

In our partnership, one area that is still lagging behind is economic cooperation. Acknowledging the importance of progress in this area, last year, a bipartisan bill Mongolia Third Neighbor Trade Act was introduced both in the House and in the Senate. If passed, this bill will grant Mongolian cashmere duty-free access to the US.

Valued for their extraordinary softness and warmth, Mongolian cashmere is produced from goats that graze in high altitude and do not exist in the US. Mongolia produces over 50% of the global raw cashmere, and the industry overwhelmingly employs women. The products of these women’s hard work and craftsmanship will finally reach American consumers—only cheaper and more ethical this time.

Mongolians were delighted that the Mongolia Third Neighbor Trade Act bill had one of the highest numbers of cosponsors in the Congress in 2020. We hope that as soon as the global Covid-19 pandemic is taken under control, the Congress will pass this bill.

Despite its dire economic conditions, Mongolia has recently donated $1 million worth of PPE to the US to support its fight against Covid-19. This is an affirmation that both our nations will support each other with our best abilities.

Whatever the outcome of the upcoming election, we hope that Mr. Biden will get to visit Mongolia again soon—the birthplace of another Celtic.

By: Enkhbold Zandaakhuu

Enkhbold Zandaakhuu was Speaker of the State Great Khural, the Parliament of Mongolia, from 2012 to 2016. During the historic August 2011 visit of then Vice President Joe Biden to Mongolia, he was a member of parliament serving as Chairman of the Standing Committee on Security and Foreign Policy. He recently retired as Chief of Staff to the President of Mongolia.

2020 Trafficking in Persons Report: Mongolia www.state.gov

he Government of Mongolia does not fully meet the minimum standards for the elimination of trafficking but is making significant efforts to do so. The government demonstrated overall increasing efforts compared to the previous reporting period; therefore Mongolia remained on Tier 2. These efforts included convicting significantly more traffickers and identifying more victims than the previous reporting period. However, the government did not meet the minimum standards in several key areas. Authorities did not identify any foreign or male victims, nor did they dedicate sufficient resources toward establishing standard identification or referral procedures. With the exception of forced child begging cases prosecuted under laws carrying insufficient penalties, officials did not detect or initiate any investigations or prosecutions of forced labor.

PRIORITIZED RECOMMENDATIONS:
Increase efforts to investigate and prosecute trafficking offenses using Articles 12.3 and 13.1 of the criminal code, rather than under alternative criminal provisions that prescribe significantly lower penalties. • Increase efforts to detect, investigate, prosecute, and secure convictions for forced labor crimes. • Impose adequate sentences on convicted traffickers to include time in prison. • Amend relevant laws to ensure victims’ access to protection services regardless of whether officials initiate formal criminal proceedings against their alleged traffickers. • Systematize and fully implement formal procedures to guide government officials, including police, immigration, and labor authorities, in victim identification and referral to protective services, especially among foreign workers, domestic and foreign nationals transiting major border crossing areas, women and children living in mining communities, and LGBTI persons. • Strengthen interagency coordination to combat trafficking and protect victims. • Amend Articles 16.1 and 16.4 of the criminal code to increase prescribed penalties such that they are in line with penalties for other child trafficking crimes. • Allocate additional resources for, and increase efforts to train officials on, implementation of anti-trafficking provisions of the criminal code, especially among rural prosecutors’ offices. • Allocate increased funding to support and expand both government and NGO-run shelters and other forms of tailored victim assistance and protection, including for male victims and children. • Expand the availability of assistance funds to all Mongolian victims identified abroad, regardless of what form of trafficking they experience. • Strengthen efforts to monitor the working conditions of foreign laborers employed in Mongolia, and screen them for labor trafficking indicators, including by increasing funding and resources for labor inspectors and allowing them to conduct unannounced inspections.

PROSECUTION
The government maintained enforcement efforts. Article 13.1 of the criminal code criminalized sex trafficking and labor trafficking; it prescribed penalties of two to eight years’ imprisonment for offenses involving an adult victim and five to 12 years’ imprisonment for those involving a child victim. These penalties were sufficiently stringent and, with respect to sex trafficking, commensurate with those prescribed for other grave crimes, such as rape. Article 12.3 of the criminal code criminalized sexual exploitation offenses, including some forms of sex trafficking; penalties ranged from two to eight years’ imprisonment for trafficking offenses involving individuals older than the age of 14, and 12 to 20 years’ imprisonment for those involving children younger than the age of 14. As in prior years, authorities sometimes prosecuted trafficking crimes under statutes carrying lesser penalties. Articles 16.1 and 16.4 criminalized “inducing a child to the committing of a crime” and “forcing a child into begging,” respectively; they both prescribed penalties of a travel ban for one to five years or one to five years’ imprisonment. Some prosecutors reportedly charged child forced begging cases as misdemeanors, rather than as criminal offenses. Observers noted complex case initiation and referral procedures, coupled with restrictions on contact between anti-trafficking police and prosecutors, at times hindered investigations and prosecutions.

During the reporting period, the government initiated 10 investigations involving 24 alleged perpetrators (compared to 17 investigations involving 62 alleged perpetrators in 2018). The National Police Agency (NPA) maintained an anti-trafficking unit, which conducted all 10 of these investigations (11 in 2018 and none in 2017). Six investigations of alleged sex trafficking crimes initiated in the previous reporting period were ongoing. Authorities did not initiate any new investigations or prosecutions of alleged forced labor crimes during the reporting period, but they concluded three forced labor prosecutions cases initiated in a prior year. They newly prosecuted three defendants under Article 12.3 and six under Article 13.1 (compared to six and 15, respectively, in 2018). Of the prosecutions initiated in 2018, 12 cases under Article 12.3 and 13 cases under Article 13.1 remained in process at the end of the reporting period; authorities referred two of the former and four of the latter for full trial in 2019. Courts convicted 12 individuals under anti-trafficking articles in 2019—three for forced labor and nine for sex trafficking—compared to six total in 2018 and none in 2017. Courts also convicted 10 individuals under Article 16.1 and two under Article 16.4 (unreported in 2018). Authorities did not report full sentencing data, but Judicial General Council officials reported courts sentenced nine traffickers to prison terms ranging from five to eight years’ imprisonment and restitution payments to at least one victim amounting to 798,400 Mongolian tugriks ($290).

Upon enactment of the new criminal code in 2017, prosecutors dismissed as many as 26 trafficking cases filed under a defunct criminal code article, rather than assessing each case to determine whether the relevant allegations fell under Articles 13.1 and 12.3. The Prosecutor General’s Office then established a working group to reassess and consider formally reinstating these cases in 2018; authorities did not provide information on its findings during the reporting period, nor did they reopen any of the cases. In previous reporting periods, international observers expressed concern that the government’s provision of early release to some incarcerated traffickers was excessively lenient and possibly contributed to continued incidence of the crime.

Due to the misconception among many government officials that traffickers only exploit women and girls, authorities rarely used Articles 13.1 or 12.3 to prosecute cases in which traffickers targeted male victims and instead used provisions with less stringent penalties. The government continued organizing, facilitating, and providing funding and in-kind support for specialized training courses for law enforcement officers and social workers on trafficking. However, law enforcement authorities noted judiciary officials’ general unfamiliarity with trafficking-specific provisions of the criminal code continued to lead to lesser charges in some cases. Contacts described an acute need for additional training, resources, and dedicated personnel to properly handle trafficking cases. Mongolia maintained mutual legal assistance agreements with China, Thailand, and Malaysia. As in prior years, authorities did not report any investigations, prosecutions, or convictions of government employees complicit in trafficking offenses.

PROTECTION
The government increased some efforts to protect victims. The government provided little victim protection; NGOs continued to provide the vast majority of victim services, which remained limited. Two NGO-operated shelters were the main victim service providers in the country; only one could accommodate male victims, and neither was accessible to persons with disabilities. The government ran at least two shelters that housed trafficking victims alongside victims of domestic violence and other forms of abuse; contacts reported child sex trafficking victims experienced further sexual abuse within two of these shelters due to poor oversight and lack of specialized care. NPA investigators reported using a trafficking risk assessment checklist containing 11 questions to identify victims; however, contrary to prior reporting, this process did not include screening of vulnerable groups. In practice, NGOs indicated victim identification and referral procedures were vague, not sufficiently systematic, and often depended largely on the awareness and initiative of individual officers.

Neither the government nor the primary service provider NGO identified any foreign or male victims during the reporting period, despite the prevalence of trafficking observed among both groups. Authorities did not maintain complete statistical records on victim identification or service provision. According to available data, police identified 68 female trafficking victims, including 20 girls, an increase from 20 total victims identified in 2018. Authorities referred five Mongolian victims to NGO shelter services during the reporting period (eight to psycho-social and medical care in 2018) and 11 to NGO-provided legal assistance (unreported in 2018). One NGO assisted 34 Mongolian victims of sex trafficking (one victim of forced labor and 38 victims of sex trafficking in 2018). These included one victim returned from the Philippines, one returned from China, and 32 whom traffickers had exploited within Mongolia. The same NGO, in turn, formally supplied information on 12 cases involving 20 of the victims to the NPA for criminal investigations into the relevant suspects. The NPA’s Victim and Witness Protection Department reportedly staffed psychologists who were equipped to handle domestic violence cases, but they did not provide services to any trafficking victims in 2019. Among victims identified in 2019, 25 received protection services under the auspices of a South Korea-funded project focused primarily on preventing violence against women and providing assistance to victims of sexual exploitation; this included direct assistance for 12 individuals, referral to social programs for 10, and vocational training for three. Another NGO conducted screenings for at-risk women and girls at a key border crossing with China, at times advising some of them not to travel and providing them with information on available assistance options. However, border authorities and law enforcement officials did not report using this information in proactive identification or referrals.

Mongolia maintained a National Anti-Trafficking Program (2017-2021) and work plan aimed at improving prevention and protection efforts; the government allocated 509 million tugriks ($186,210) to implement this program (709 million tugriks ($259,370) in 2018 and no funding in 2017). This budget allocation allowed border authorities to continue using immigration software to screen for trafficking indicators among hundreds of Mongolian children traveling internationally with and without their parents or legal guardians; although they did not identify any victims among these children, border authorities prevented 105 of them from traveling as a result of detected vulnerabilities (none in 2018).

Article 8.1 of the criminal procedural code included language that reportedly denied trafficking victims’ access to protective services until prosecutors had initiated cases against their alleged traffickers, thereby obstructing access to protective services for some victims. In an effort to address this issue in 2018, the Ministry of Justice and Home Affairs (MOJHA) created a working group and instituted an intra-governmental comment period to consider amendments to the Law on Victim and Witness Protection. However, authorities did not report on the outcome, status, or projected timeframe of that review process, and some officials claimed victims were able to access protection services regardless of whether relevant prosecutions had begun. Article 15 of the anti-trafficking law stipulated victims were entitled to compensation for damages wrought by their traffickers, but officials and non-government observers agreed inconsistencies between the criminal code and the civil code made this provision impossible to fully implement. Mongolia’s Immigration Agency, the General Authority for Border Protection (GABP), and the Consular Department within the Ministry of Foreign Affairs (MFA) shared responsibility for handling cases involving Mongolian trafficking victims abroad. The latter maintained a fund to assist Mongolian victims, but it was only available in cases involving organized crime syndicates or “grave harm.” In 2019, authorities repatriated three Mongolian victims—one each from China, Kyrgyz Republic, and the Philippines—a significant decrease from a total of 20 in 2018. Authorities did not report providing psycho-social or other rehabilitative services to any of these victims.

Unlike in 2018, authorities reportedly did not arrest any minors as part of anti-prostitution raids during the reporting period. However, Mongolia’s Law on Petty Offenses, which allowed authorities to detain anyone apprehended on suspicion of prostitution for seven to 30 days, reportedly continued to place some victims at risk of penalization for crimes committed as a direct result of unlawful acts their traffickers compelled them to commit. Contacts also noted some victims were hesitant to self-report or testify due to fear they may face prosecution for such crimes. Mongolian law did not provide legal alternatives to the removal of foreign victims to countries in which they could face retribution or hardship. The Immigration Agency deported more than 1,500 foreign nationals to 26 countries during the reporting period; as screening procedures were neither universally implemented nor sufficient to detect all cases of trafficking, it is possible this figure included undetected trafficking victims.

PREVENTION
The government maintained efforts to prevent trafficking. It decreased funding to the National Anti-Trafficking Program (2017-2021) and corresponding work plan. Under the management of a National Sub-Council, the program aimed to provide technical guidance on trafficking prevention and coordinate interagency efforts to implement relevant legislation; however, some contacts continued to express concern over insufficient interagency coordination. With funding from the Government of South Korea, the Ministry of Labor and Social Protection (MLSP) partnered with an NGO to conduct a survey on “vulnerability to prostitution and sexual exploitation” that included trafficking elements. The General Authority for Specialized Investigation (GASI) also conducted three large-scale surveys on child labor and protection issues during the reporting period. The Family, Child, and Youth Development Agency began assembling a large database containing information on at-risk populations, and it collaborated with an international organization to establish multidisciplinary committees focusing on at-risk children’s rights and protections at the district and provincial capital levels; some of this work included anti-trafficking equities. The government also provided 20 million tugriks ($7,320) to an NGO for maintenance of a hotline system, through which one sex trafficking investigation was initiated.

Officials continued to disseminate a daily trafficking-themed public service announcement (PSA) on social media and television, and they expanded the PSAs to key rail lines connecting Mongolia to Russia and China. Authorities also continued to distribute PSAs to police stations in all provinces. Border officials provided approximately 50,000 Mongolian nationals with passport inserts explaining trafficking vulnerabilities and listing information on victim assistance options; recipients included nearly 1,000 Mongolian children traveling abroad for sporting competitions and cultural events known to feature trafficking vulnerabilities, including horse racing, acrobatics, and contortionism. In the south, authorities also continued conducting anti-trafficking awareness-raising activities for hundreds of students and local medical professionals specializing in adolescent care in an effort to address trafficking vulnerabilities among youth crossing into China for employment opportunities.

The MLSP’s General Agency for Labor and Social Welfare had the authority to monitor labor agreements for foreign nationals working in Mongolia, as well as those for Mongolians working in countries that had bilateral work agreements with Mongolia. The government maintained such agreements with South Korea, Czech Republic, and Japan; observers noted these agreements were not always sufficiently implemented to prevent labor abuses, including trafficking. GASI had the authority to inspect labor contracts, monitor compliance with the law for all workers in Mongolia, and conduct inspections of working conditions in Mongolian formal sector establishments. Officials and NGOs noted funding and resources for the inspectors were too low to provide comprehensive oversight, and the government did not report statistics on, or the outcomes of, these inspections. Moreover, GASI was required to give employers five days’ advance notification before conducting an inspection in most cases, raising concerns that employers may have been able to conceal violations in the interim. Authorities reportedly began a formal process to consider amendments outlining unannounced inspections, but it had not concluded the process at the end of the reporting period. Unlike last year, the government did not take measures to reduce the demand for commercial sex acts. In 2018, the government worked with an international organization to jointly launch a campaign to raise awareness on, investigate, and intervene in fraudulent online recruitment leading to sex trafficking and forced labor; authorities did not continue this campaign during the reporting period.

TRAFFICKING PROFILE
As reported over the past five years, human traffickers exploit domestic and foreign victims in Mongolia, and they exploit victims from Mongolia abroad. Traffickers may also use Mongolia as a transit point to subject foreign individuals to trafficking in Russia and China. Traffickers subject Mongolian men, women, and children to forced labor in China, Kazakhstan, Norway, Sweden, and Turkey, and to sex trafficking in Belgium, Cambodia, China, Germany, Hong Kong, Japan, Macau, Malaysia, the Philippines, South Korea, Sweden, Turkey, and the United States, as well as in Mongolia. Traffickers sometimes use drugs, fraudulent social networking, online job opportunities, or English language programs to lure Mongolian victims into sex trafficking. Most sex trafficking of Mongolian victims from rural and poor economic areas occurs in Ulaanbaatar, provincial centers, and border areas. One recent civil society survey found domestic violence drove the vast majority of Mongolian trafficking victims to seek and accept unsafe employment opportunities that left them vulnerable to traffickers. Traffickers exploit women and girls in sex trafficking in Mongolian massage parlors, illegal brothels, hotels, bars, and karaoke clubs, sometimes through the permissive facilitation of local police. Transgender women are reportedly at higher risk of sex trafficking due to pervasive social stigma barring them from employment in the formal sector. Tourists from Japan and South Korea have reportedly engaged in child sex tourism in Mongolia in prior years; some civil society groups believe this practice persists.

The ongoing development of the mining industry in southern Mongolia continues to drive growing internal and international migration, intensifying trafficking vulnerabilities—especially along the China-Mongolia border. Truck drivers transporting coal across the Chinese border in Omnogovi Province are often more vulnerable to labor traffickers due to an arrangement under which employers confiscate their passports as collateral for their vehicles. These drivers often wait in truck lines with minimal sleep for weeks or months at a time until they receive permission to cross and make deliveries in China, where customers impose wage deductions for the delays; this loss of income reportedly makes them further vulnerable to labor exploitation. Traffickers are increasingly exploiting women and girls in sex trafficking in these border crossing truck lines, along the coal transport roads connecting mining sites to the Chinese border, at nightlife establishments in mining towns, and at entertainment sites across the border in Inner Mongolia. Mining workers sometimes leave their children at home alone while on extended shift rotations, during which time the children are at elevated risk of sex trafficking. Child forced labor also occurs in connection with artisanal mining.

Traffickers force some children to beg, steal, or work in other informal sectors of the economy, such as horseracing, herding and animal husbandry, scavenging in garbage dumpsites, and construction. Some families are complicit in exploiting children in sex trafficking and forced labor. In previous years, traffickers have forced Mongolian girls to work as contortionists—often under contractual agreements signed by their parents—primarily in Mongolia and Turkey, and to a lesser extent in Hong Kong and Singapore. Mongolian boys are at high risk of forced labor and sex trafficking under visa regimes that enable them to work indefinitely as horse jockeys and circus performers across the Chinese border, provided they return with a chaperone once a month; this frequent facilitated transit also makes them more vulnerable to trafficking. Traffickers compel women and girls to work in domestic service and engage in commercial sex acts after entering into commercially brokered marriages with men from China and, to a lesser extent, South Korea.

Chinese companies increasingly are hiring Mongolian men and boys to work at agricultural operations for compensation far below minimum wage and under ambiguous immigration status, placing them at high risk of trafficking. Some Chinese micro-lending institutions reportedly retain Mongolians’ passports as a form of collateral, leaving them vulnerable to immigration status-related coercion.

Chinese workers employed in Mongolia are vulnerable to trafficking as contract laborers in construction, manufacturing, agriculture, forestry, fishing, hunting, wholesale and retail trade, automobile maintenance, and mining. Some of them experience contract switching when they enter the country, making them especially vulnerable to coercion due to resultant immigration violations. In previous years, North Koreans also experienced forced labor in these industries; they reportedly did not have freedom of movement or choice of employment, and companies allowed them to retain only a small portion of their wages while subjecting them to harsh working and living conditions. Pursuant to a 2017 UN Security Council resolution requiring the repatriation of all North Korean nationals earning income overseas by the end of 2019, subject to limited exceptions, the government reportedly repatriated all North Korean labor migrants covered under the relevant provision. Some Russian and Ukrainian women entering Mongolia through Chinese border crossings for short visits under visa-free regimes may be sex trafficking victims. Observers report corruption among some Mongolian officials facilitates sex trafficking in illicit establishments and impedes the government’s anti-trafficking efforts.

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