Legal status and state policy:

The Parlament of Mongolia has approved zonal development view in 2001 and this document includes the provinces that are situated in the west boundary of Mongolia such as Bayan-Ulgii, Gobi-Altai, Zavkhan, Uvs and Khovd.

There has been pursued such as tasks in order let the west zone involve in foreign cooperation actively, to implement the purpose to connect it with trade-economic network of Russian and People’s Republic of China through Tsagaan nuur, Khandgait, Arts village, Bulgan and Burgastai in stages, in the future to research the possibilities to connect state horizontal axis /millenium road/ with the countries of Middle Asia and the nearest East through Tavanbogd, and also at first to establish trade and customs special /free/ zones by supporting on the ports that join Russian Federation “Altanbulag” /Selenge province/, “Tsagaan nuur” /Bayan-Ulgii province/ and the port that joins People’s Republic of China “Zamyn Uud” /Dornogobi province/, to make up the business area to cooperate reciprocal beneficially for the domestic and foreign traders and investors along to international standard in the scope of these zones, to establish a special /free/ zone in the depth of the territory of Mongolia in the field of proper types when the warrant experience collects.

During the Soviet Union, 5 western provinces were supplied with all kinds of imported goods from the Soviet Union and those provinces prepared to export animal and animals’ raw products. Tsagaannuur which was one of a trans-boundary base for exporting products at that time become one of the reasons for establishing a free zone in Tsagaannuur soum.

The purpose of establishing the “Tsagaannuur” free zone is to attract foreign and domestic investors based on regional allowances, to develop international trade, small and medium sized enterprises and tourism, to reduce unemployment and poverty and to stimulate the country’s development.

Established “Tsagaannuur” free zone:

The Parlament of Mongolia approved law about free zone in 2002, law about legislative position of “Tsagaan nuur” trade free zone in 2003.

By the Session held on 12th February of 2015 of the State Great Khural the amended and restated Law on Free zone was ratified.

According to the Government resolution NO 134, 2005 on the organize The Governor,s Working division.

The zone has  a 708.4 ha area in total and is located in Tsagaannuur village of Bayan-Ulgii aimag.

Tsagaannuur free trade zone located 60 km north of the aimag center, 28 km south of the border with Russia, distant from the capital Ulaanbaatar at 1700 km, from the border of China for 212 km, from the border of Kazakhstan / through Russia / 190 km from the center of Hovd aimag to 260 km from the center of Uvs aimag to 224 km and is situated along the AN-32, linking Asia with Europe, the Asian highway AN-4 and located at 490  of south latitude, 900 of east longitude,  2,115 meters above sea level.

After the change made in structure of the Government in 2008 it was shifted under the function of Vice Prime Minister, in 2012 under the Supervision of vice Prime Minister, in August of 2012 shifted under the supervision of the Ministry of Economic Development and since 2015 has been operating under the Ministry of Industry.

Currently Tsagannuur free zone performs its activity under the authority of the Deputy Prime Minister of Mongolia.