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Joint agreed minutes: 1st Meeting of the European Union – Mongolia Development Cooperation Working Group (informal)

16/12/2020 - 03:23
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MIP 2014-2020

  • Both sides acknowledged a positive dynamic in bilateral relations between the European Union (EU) and Mongolia (MN), and confirmed their willingness to strengthen these relations.
  • Both sides agreed on the need to strengthen donor and sector coordination mechanisms.
  • Both sides recognised the importance of working towards the establishment of effective and well-functioning monitoring and evaluation functions across all line ministries of the Government of Mongolia.
  • MN side confirmed that the Parliament had ratified the agreement on tax exemption for the EU funded projects, which was warmly welcomed by the EU.

Budget support

  • The MN appreciates the timely and increased disbursement of the 1st budget support fixed tranche. It also outlined the main achievements, challenges and ambitions regarding the reforms process in the employment/TVET sector and public finance management.
  • The EU highlighted that it remains committed to support the reform process in the employment/ TVET sector and public finance management.
  • Both sides agreed that in the framework of the Sector Budget Support and the complementary measures, the Ministry of Finance and Ministry of Labour and Social Protection together with the support from the EU will continue working on, among others,: i) an effective monitoring and reporting system of the progress on the relevant reforms in employment, TVET and public finance management; ii) promoting an open policy dialogue and enhancing donor and sector coordination mechanisms; iii) establishing a communication plan for sector reforms; iv) sector financing improvement actions to mitigate the impact of COVID-19.
  • The EU side took note of the Mongolian side’s interest in establishing a partnership with the European Training Foundation (ETF) with EU facilitation, which has been postponed due to COVID-19 restrictions.

Blending (climate change and green energy)

  • The EU highlighted that blending has hitherto been one of preferred EU development cooperation instruments in the areas of climate change and green energy, and illustrated its potential for achieving leveraged development impact through examples of on-going blending projects.
  • At the same time, the EU stressed importance of continuing sectoral policy dialogue with the line Ministries in identifying blending operations in the climate change and green energy as well as to improve business environment and sectoral regulatory framework.
  • Finally, the EU underlined that success of blending operations also depends on the fair and non-discriminatory treatment of investors.
  • MN confirmed that blending operations constitute a means of funding larger infrastructure projects in order to achieve greater social impact, thanks to the financial leverage that the EU grant provides.
  • MN took note of the EU’s concerns about the increasing difficulties and challenges faced by European investors (in particular in the energy sector) due to the unpredictability of the business climate, and is willing to follow-up the issue with the Ministry of Energy in its own capacity and legal jurisdiction. MN also expressed its willingness to engage in dialogue with the EU on improving business environment in Mongolia.

Trade related assistance

  • With a view to ensuring the full benefits of Mongolia’s privileged GSP+ status, the EU highlighted the importance of building on lessons learned from a range of EU trade and value chain development-related projects, with product quality and sustainability being at the forefront of value addition and competitiveness in the EU and global markets. The EU showcased the potential of agriculture and textile value chains (cashmere in particular) and Geographical Indications, and underlined the importance of investments in human capital and MSMEs.
  • In the same vein, the EU emphasised a need for an open policy and sectoral dialogue with a range of stakeholders, including close inter-ministerial/agency cooperation and donor coordination, to identify how best to support quality and sustainability of value chains in a more strategic and integrated way.
  • MN showed appreciation of EU assistance for the trade sector. MN’s focus is on creating a business-friendly environment for the private sector, with the amended taxation law being one example.

Cooperation within the next EU programming cycle 2021-2027

  • The EU presented the context and the next steps of the programming of EU development cooperation post-2020, as well as the main features of the Neighbourhood, Development and International Cooperation Instrument (NDICI). It also highlighted a need for a close cooperation from the Government of Mongolia and line ministries in the 2021-2027 programming consultation process.
  • MN highlighted the prospects for aligning the main sectors of intervention with priority areas and regulatory framework of the Government of Mongolia (in particular the Government Action Plan and Vision 2050), as well as expressing its willingness to actively participate in the consultation process.
  • EU Technical Assistance on Anti-Money Laundering and Countering Financing of Terrorism
  • While recognising the substantial progress made by Mongolia to implement requirements set out in the 2019 FATF Action Plan,
  • The EU confirmed that the process for de-listing of Mongolia from the EU list of high-risk third countries has already started. While recognizing substantial improvement in the legal environment, the EU stressed the importance of appropriate implementation of the legislation, which indeed may require building of the implementation capacity. With this respect, and following the request by the Minister of Finance, the EU funded Global Facility stand ready to begin delivering the technical assistance.
  • MN confirmed dialogue with the Global Facility and initial planning for starting trainings towards the end of November and December. However, due to the COVID situation start of the trainings has been postponed.
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