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Mongolia’s Financial Institution AML Policies Under Scrutiny: FATF Follow-Up Report Reveals Mixed Results

A recent report from the [Financial Action Task Force (FATF)] has shed light on Mongolia’s efforts to combat money laundering and terrorist financing through its financial institution anti-money laundering (AML) policies. The report, which assesses Mongolia’s progress in implementing the technical requirements of the FATF Recommendations, reveals a mixed bag of results.

Assessment Highlights

• Mongolia has made significant strides in implementing certain AML measures, such as:
  • Assessing risk and applying a risk-based approach
  • National cooperation and coordination
  • Regulation and supervision of financial institutions
• However, other areas require improvement, including:
  • Confiscation and provisional measures related to money laundering
  • Targeted financial sanctions related to terrorism and terrorist financing
  • Transparency and beneficial ownership of legal persons

Progress in Strengthening AML Framework

Mongolia has made efforts to strengthen its AML framework by introducing new technologies, such as:

• Digital identification
• Electronic know-your-customer requirements Additionally, the country has made progress in implementing:
• Customer due diligence
• Record-keeping
• Reporting of suspicious transactions

Areas Requiring Further Attention

The report identifies several areas that require further attention, including:

• Lack of clarity on financial institution secrecy laws
• Inadequate implementation of correspondent banking measures
• Insufficient transparency regarding the beneficial ownership of legal arrangements

Conclusion

The FATF report concludes that Mongolia has made significant progress in implementing its AML policies but requires continued efforts to address outstanding issues. The country’s financial institutions must prioritize strengthening their internal controls and improving cooperation with law enforcement authorities to effectively combat money laundering and terrorist financing.