Mongolia Violating Oyu Tolgoi Agreement

This article in the New York Times says that a new tax proposal in Mongolia will hit the project with an additional $300 million a year in costs, in direct violation of the Investment Agreement.

This is an unfortunate development. It will not be helpful in securing any further investment in the country if investors get the impression that they can’t rely on promises of the Mongolian government.

On the other hand, this may possibly show how efficient the enforcing mechanisms of the Investment Agreement are. It will be interesting to follow the international arbitration ahead.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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