Identifier
Created
Classification
Origin
06ULAANBAATAR783
2006-10-17 08:40:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ulaanbaatar
Cable title:  

AMBASSADOR'S INTRODUCTORY CALL ON FINANCE MINISTER

Tags:  EFIN PREL EAID KCOR KMCA MG 
pdf how-to read a cable
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DE RUEHUM #0783/01 2900840
ZNR UUUUU ZZH
R 170840Z OCT 06
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 0467
INFO RUEHBJ/AMEMBASSY BEIJING 5274
RUEHML/AMEMBASSY MANILA 1246
RUEHUL/AMEMBASSY SEOUL 2500
RUEHKO/AMEMBASSY TOKYO 2269
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0374
RUCNDT/USMISSION USUN NEW YORK 0450
RUEKJCS/SECDEF WASHDC
RHEHNSC/NSC WASHDC
RUCPODC/USDOC WASHDC 1111
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 02 ULAANBAATAR 000783 

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/CM AND EB/IFD
TREASURY FOR T.T.YANG; PASS USEDS TO WORLD BANK AND IMF
MCC FOR MONGOLIA COUNTRY DIRECTOR J. HALLMARK
MANILA FOR USED TO ADB

E.O. 12958: N/A
TAGS: EFIN PREL EAID KCOR KMCA MG
SUBJECT: AMBASSADOR'S INTRODUCTORY CALL ON FINANCE MINISTER
BAYARTSAIKHAN

SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION.
UNCLAS SECTION 01 OF 02 ULAANBAATAR 000783

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/CM AND EB/IFD
TREASURY FOR T.T.YANG; PASS USEDS TO WORLD BANK AND IMF
MCC FOR MONGOLIA COUNTRY DIRECTOR J. HALLMARK
MANILA FOR USED TO ADB

E.O. 12958: N/A
TAGS: EFIN PREL EAID KCOR KMCA MG
SUBJECT: AMBASSADOR'S INTRODUCTORY CALL ON FINANCE MINISTER
BAYARTSAIKHAN

SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION.

1.(SBU) SUMMARY: During his October 16 courtesy call, the
Ambassador complimented Mongolia's recent economic and
financial legislation covering tax reforms,
anti-money-laundering, and anti-corruption. Both he and
Minister Bayatersaikhan were hopeful that Mongolia's
Millennium Challenge compact could be concluded in spring
2007, and both saw the compact as a vehicle for significantly
expanding U.S.-Mongolia cooperation and interaction. They
exchanged views on corruption and civil service reform. END
SUMMARY.


2. (U) The Ambassador, accompanied by DCM (notetaker) and
interpreter, called October 16 on Minister of Finance
Nadmidiin Bayartsaikhan. Finance Ministry State Secretary
Khurlbaatar, Advisor to the Minister Hongkor, and his
interpreter also attended the cordial half hour meeting.


3. (SBU) The Ambassador expressed appreciation for the
Minister's reaffirmation, at the October 9-10 donor technical
meeting (septel),of Mongolia's commitment to market
economics and reform. He also expressed appreciation for
passage by the State Great Hural (parliament) of
anti-money-laundering (AML),anti-corruption, and tax reform
legislation. The Ambassador also noted the importance of
State Secretary Khurlbaatar's leadership of Mongolia's
Millennium Challenge Account (MCA) National Council. And he
recalled that the Treasury Department was considering
providing technical assistance through a resident advisor in
the Ministry's Budget Office.


4. (SBU) Minister Bayartsaikhan welcomed the Ambassador and
noted his Ministry's close cooperation with USAID and the
USAID-funded Economic Policy Reform and Competitiveness
project, which provided useful policy analysis, particularly
regarding tax reform. The Ministry would also be active
fleshing out AML regulations and implementing them. He also
expressed thanks for the U.S. Embassy's participation in the
recent donor technical meeting and support for Mongolia's
policies. He said Mongolians eagerly await a Millennium
Challenge compact and he personally sees the compact as a
vehicle to expand Mongolia-U.S. economic and commercial
interactions. He also hoped U.S. investors, along with
Japanese, Korean, and EU investors, would help balance out
investment interest from Russia and China. The Ambassador
responded that the U.S. was also interested in the successful
conclusion of the MCA compact and he promised the Embassy's
support in helping nudge the process along. The Ambassador
also noted that the Finance Ministry was responsible for
leading the mining stabilization and investment agreement
process, a step critical to Mongolia's development of its
mineral resources and it economic future. U.S. technical
assistance to the Ministry could improve cooperation and
coordination on a wide range of issues, including such as
AML, counter-terrorism finance, and counterfeiting. The
Minister welcomed the prospect of increased cooperation
presented by a Treasury technical advisor.


5. (SBU) The Minister noted the DCM (then Charge') had
expressed concern at the donor technical meeting about the
uneven, untransparent implementation of tax and customs
regulations, coupled with bribery and corruption concerns.
(NOTE: During a particularly positive portrayal of
Mongolia's business climate, DCM had noted that U.S.,
international, and Mongolian businesses had observed a
serious up-tick in unwarranted, non-transparent tax audits
coupled with offers to "solve their tax problems" with a
bribe of 10% of the total tax bill.) The Minister said that,
as both Customs and the Tax Authority fall under the
Ministry's purview, he took such charges seriously. Civil
service salaries needed to be increased, as the average
salary was barely US$100 per month and hardly sufficient to
live on. The Ministry was also working with the Asian
Development Bank and World Bank on improving operations and
governance with project of US$5 and US$4 million,

ULAANBAATA 00000783 002 OF 002


respectively. After reviewing the U.S.' own experiences
regarding corruption and civil service reform, the Ambassador
replied that improving systems -- practical arrangements --
along with strong and vocal leadership would be needed to
fight corruption.
MINTON