President of Russia Vladimir Putin signed off the federal law on writing off the Mongolian financial obligations to Russia; the document was posted on the official legal website on Sunday.

"To ratify the agreement between the Government of Russian Federation and Government of Mongolia on regulation of financial obligations of Mongolia to Russia signed on December 14, 2010 in Moscow ", says the law.

Earlier was reported that the agreement was ratified by the Federal Council. The document writes off the Mongolia’s outstanding debt of US$174,2 m.

Outstanding financial obligations of Mongolia to Russia turned out to be a barrier for development of bilateral investment cooperation, specifically for the involvement of Russian companies in large transportation and mining projects in Mongolia. Negotiations held in July of 2010, parties reached a consensus on finalizing the Mongolian financial obligations of 163,7 m convertible roubles and US$10,5 m with US$ 3,8 m at once.

It means that the debtor shall pay off the debt in convertible currency denominated in units used for credit and commercial transactions during USSR and almost removed from economic circulation of Russia and Mongolia in the last 20 years.

The Government noted that the ratification of the document solves the problem of financial obligations of Mongolia to Russia and removes barriers for future development of bilateral relations in financial and investment fields. According to the contract US$3,8 m will be collected by the Russia’s federal budget as well as gives new wave to the development of Russia’s economic interest in Mongolia.