Mongolia Cracks Down on Money Laundering and Terrorism Financing

New Laws Aim to Combat Financial Crimes

Ulaanbaatar, Mongolia - The Mongolian government has introduced new laws aimed at preventing money laundering and terrorism financing by strengthening its financial system.

Key Provisions of the Law

• Entities subject to the law must report suspicious transactions to the Financial Information Unit (FIU) and implement internal monitoring programs to detect and prevent money laundering and terrorism financing.
• Entities must submit reports on transactions that may be related to money laundering or terrorism financing. If an investigation reveals that a transaction was not intended for these purposes, the suspension decision will be annulled and the entity notified immediately.
• The law provides immunity from liability for entities that submit reports in good faith, even if it is later determined that the information submitted was incorrect or incomplete.

Confidentiality and Disclosure

• Entities subject to the law are prohibited from disclosing confidential information related to customer transactions to anyone other than authorized personnel.
• The FIU’s employees are also prohibited from disclosing confidential information at any time.

Internal Monitoring Programs

• Entities must have an internal monitoring and risk management program in place to detect and prevent money laundering and terrorism financing.
• This program must be implemented by the entity’s board of directors or equivalent management body and must include procedures for:
  • Evaluating risks
  • Conducting customer due diligence
  • Detecting suspicious transactions

Border Declaration Requirements

• Mongolian citizens and legal entities are required to declare cash and bearer negotiable instruments worth over MNT15 million (approximately USD6,000) when crossing the border.

Role of the Financial Information Unit

• The FIU is responsible for receiving information related to money laundering and terrorism financing, analyzing it, and disseminating it to competent law enforcement authorities.
• The unit is also responsible for monitoring the effectiveness of the internal monitoring programs implemented by entities subject to the law.

Aims of the New Laws

The new laws aim to strengthen Mongolia’s financial system and prevent the misuse of its financial institutions for illegal activities.