Financial Crime World

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Mongolia’s Center for Enabling Secure and Efficient Information Exchange

Ulaanbaatar, Mongolia - In a major boost to the country’s efforts against money laundering and terrorist financing (ML/TF), Mongolia’s Center for enabling secure, efficient, transparent, and prompt information exchange has made significant progress in connecting public and private sector institutions.

Current Status

Currently, 274 institutions are connected to the system, which stores information from 108 government organizations. This accelerated information exchange has a major positive impact on strengthening the ML/TF regime, particularly for supervisions and investigations.

New Laws Enacted to Fight Money Laundering and Terrorist Financing

In November 2022, Mongolia’s Parliament approved the Law on Regulating Money Loans, which applies to entities that provide collateral loans. The law also amended the AML/CFT law, requiring entities that provide money loan services to register with the Financial Regulatory Commission (FRC).

Amendments

  • The Criminal Code was also amended in December 2022 to strengthen sentencing policies for corruption crimes identified as high-risk predicate offenses.

Improvements in Reporting and Analysis

To improve the quality and timeliness of reports received, the FRC introduced the goAML software developed by the United Nations Office on Drugs and Crimes. This has enabled entities to submit suspicious, cash, and foreign settlement transaction reports using the software.

Supervisory Activities

  • Supervisory authorities have continued conducting ML/TF risk assessments, off-site and on-site supervision, and monitoring compliance with AML/CFT and TFS obligations of regulated reporting entities.

Updates to Supervision Regulations

The Bank of Mongolia revised its regulations on off-site and on-site AML/CFT supervision to enable supervisors to update risk assessment tools and procedures on an ongoing basis. The Financial Regulatory Commission also revised its regulation on off-site and on-site supervision for non-banking sector reporting entities.

Registration of Virtual Asset Service Providers

The FRC has approved eight regulations related to the registration process and operational requirements for Virtual Asset Service Providers (VASPs). Eleven VASPs have obtained official registration, while 19 others were sent rectification notices for failing to meet registration requirements.

AML/CFT Supervision of VASPs

  • The FRC is continuously monitoring registered VASPs through on-site and off-site supervision and has introduced blockchain analytics programs to effectively monitor compliance.
  • VASPs are reporting entities legally required to comply with AML/CFT rules, including reporting suspicious transactions.

Conclusion

Overall, Mongolia’s efforts to combat ML/TF have made significant progress in recent years, with improvements in information exchange, reporting, and analysis. The country continues to work towards strengthening its AML/CFT regime and enhancing international cooperation to prevent financial crimes.