The tax investigation trial against three former SouthGobi Sands employees and charges of 35 billion MNT in taxes was held at the 2nd stage primary court of the District Criminal Court last week. The trial took three days and resulted in a guilty verdict, fines, and sentencing of up to 5 years and 10 months in prison.

On January 30, 2015, judges found U.S. citizen Justin Kapla and Philippine citizens  Hilarion Cajucom, Jr. and Cristobal David guilty of tax evasion charges, and SouthGobi Sands has been found financially liable as a "civil defendant". 

The Embassy of the United States made a statement last Friday concerning the conviction of U.S. citizen, Justin Kapla, former president and executive director of SouthGobi Sands.

Several embassy officials attended the trial, in particular Ambassador Piper Campbell. The statement from the U.S. Embassy states that the ambassador noted that there were interpretation problems during the trial, and because of these problems, the defendants stated during the trial that they could not understand the interpretation, nor could they express themselves clearly. 

"Mr. Kapla’s case has lasted nearly three years and the repeated delays and exit ban have caused him enormous hardship.

"Economic Advisor to the Prime Minister Mr. Chuluunbat recently reiterated what international investors have long made clear – that exit bans on foreign business executives whose companies are involved in business litigation in Mongolia have had significant, detrimental impacts on foreign direct investment.

"Mr. Kapla’s lawyers have informed us that the United Nations Human Rights Committee has accepted his petition to review what he alleges to be the violation of his intrinsic human rights by Mongolian authorities.  The U.S. Embassy will continue to monitor the situation closely."

The Embassy of the United States has stated on their official site that the embassy will continue to monitor the situation closely.