Financial Crime World

Financial Inclusion and Financial Crime in Mongolia: A Growing Concern

The Financial Action Task Force (FATF) has issued a Follow-Up Report for 2023 assessing Mongolia’s efforts to combat financial crime, including anti-money laundering and combating terrorist financing measures, as well as its commitment to achieving greater financial inclusion.

Assessing Risk and Applying a Risk-Base Approach

Mongolia is largely compliant with FATF requirements, having established a risk-based approach to assess the risks associated with different types of transactions and customers. However, there are areas where improvements can be made, such as enhancing the accuracy of customer due diligence.

Key Findings:

  • Mongolia has established a risk-based approach to assessing the risks associated with different types of transactions and customers.
  • There is a need for greater emphasis on verifying the identity of customers and monitoring their transactions.

National Cooperation and Coordination

Mongolia has made significant progress in coordinating its efforts to combat financial crime, with various agencies working together to share information and resources. While there is still room for improvement, Mongolia’s coordination efforts are largely compliant with FATF requirements.

Key Findings:

  • Mongolia has made significant progress in coordinating its efforts to combat financial crime.
  • There is still room for improvement in the effectiveness of these efforts.

Money Laundering Offence

Mongolia has a dedicated money laundering offence on the books, which is largely compliant with international standards. However, further work is needed to ensure that the offence is effectively enforced and that sufficient resources are allocated to investigating and prosecuting money laundering cases.

Key Findings:

  • Mongolia has a dedicated money laundering offence.
  • There is a need for greater enforcement and resource allocation to combat money laundering.

Confiscation and Provisional Measures

Mongolia’s laws provide for confiscation of assets linked to financial crime, but there are concerns about the effectiveness of these measures in practice. Additionally, provisional measures such as freezing and seizing assets could be improved by providing greater clarity on their application and scope.

Key Findings:

  • Mongolia has laws that provide for confiscation of assets linked to financial crime.
  • There is a need for greater clarity and effectiveness in implementing these measures.

Terrorist Financing Offence

Mongolia has a dedicated terrorist financing offence, which is largely compliant with international standards. However, more work is needed to ensure that the offence is effectively enforced and that sufficient resources are allocated to investigating and prosecuting cases of terrorist financing.

Key Findings:

  • Mongolia has a dedicated terrorist financing offence.
  • There is a need for greater enforcement and resource allocation to combat terrorist financing.

Mongolia has implemented targeted financial sanctions related to terrorism and terrorist financing, but there are concerns about the effectiveness of these measures in practice. Further work is needed to ensure that the sanctions are properly enforced and that sufficient resources are allocated to monitoring and implementing them.

Key Findings:

  • Mongolia has implemented targeted financial sanctions related to terrorism and terrorist financing.
  • There is a need for greater enforcement and resource allocation to combat terrorism and terrorist financing.

Non-Profit Organisations

Mongolia’s non-profit organisations are largely compliant with FATF requirements, but there is a need for greater transparency and accountability in their operations.

Key Findings:

  • Mongolia’s non-profit organisations are largely compliant with FATF requirements.
  • There is a need for greater transparency and accountability in the operations of these organisations.

Reporting of Suspicious Transactions

Mongolia’s financial institutions generally report suspicious transactions in a timely manner, but there are concerns about the effectiveness of these reporting mechanisms. Further work is needed to ensure that these reports are properly investigated and prosecuted.

Key Findings:

  • Mongolia’s financial institutions generally report suspicious transactions in a timely manner.
  • There is a need for greater effectiveness in investigating and prosecuting reported suspicious transactions.

Conclusion

Mongolia has made significant progress in implementing anti-money laundering measures, but there are still areas where further work is needed to ensure effective implementation and enforcement of these measures.