Mongolian Regulations Require Strict Identity Verification and KYC Procedures
Combating Money Laundering and Terrorist Financing
The Mongolian government has introduced strict regulations requiring businesses to verify the identity of their customers and maintain accurate records to combat money laundering and terrorist financing.
Identity Verification Procedures
Under the new rules, companies are required to conduct identity verification procedures in multiple instances:
- When onboarding new customers
- Processing transactions above certain monetary thresholds
- Dealing with high-risk clients
- Verifying customer addresses through government documents, utility bills, or bank statements
Screening and Due Diligence
The regulations also require businesses to screen customers against watchlists of global regulatory authorities, foreign and domestic databases, compromised Politically Exposed Persons (PEPs), and sanctioned individuals. The screening service highlights the category of PEPs based on their risk profile and any immediate family members or close associates.
Companies are allowed to rely on external services for measures of due diligence, as long as they collect all necessary data from the third-party provider without undue delay. However, companies remain liable for maintaining compliance with anti-money laundering (AML) and know-your-customer (KYC) obligations.
Data Retention
The regulations require businesses to retain data for at least five years, which is a part of their AML and KYC obligations for due diligence. In cases where this information is processed, collected, and managed by a relevant third-party provider, companies are liable to collect all necessary information without undue delay.
Compliance and Support
Businesses operating in Mongolia must ensure that they comply with these regulations to avoid penalties and reputational damage. Shufti Pro, a leading provider of identity verification solutions, has expressed its commitment to supporting businesses in their AML/KYC compliance efforts: “Our services are designed to help companies navigate the complex regulatory landscape and maintain accurate records,” said a spokesperson for Shufti Pro.
Effective Date and Consequences
The new regulations come into effect immediately. Companies are advised to review their policies and procedures to ensure compliance. Failure to comply may result in severe penalties, including fines and even imprisonment.
By adhering to these regulations, businesses can maintain a strong reputation and avoid costly legal consequences. It is essential for companies to prioritize AML/KYC compliance and stay up-to-date with the latest regulatory requirements.