Financial Crime World

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Mongolia Fights Financial Crime and Terrorism Financing

Ulaanbaatar, Mongolia - The Mongolian government has made significant strides in combating financial crime and terrorism financing, according to the latest Mutual Evaluation report. While there are areas for improvement, the country’s efforts have earned it a rating of “partially compliant” with the Financial Action Task Force (FATF) Recommendations.

Progress Made

The report highlights Mongolia’s progress in:

  • Assessing risk and applying a risk-based approach to combating financial crime
  • Strengthening national cooperation and coordination mechanisms to combat terrorism financing
  • Criminalizing money laundering and terrorist financing offenses
  • Introducing measures to confiscate and freeze assets related to these crimes

Challenges Ahead

However, the report notes that Mongolia still faces challenges in:

  • Financial institution secrecy laws remaining a concern
  • Customer due diligence and record-keeping requirements being inadequate
  • High reliance on third parties for certain financial services increasing the risk of financial crime

Areas for Improvement

The report identifies areas where Mongolia has failed to meet FATF standards, including:

  • Lack of transparency and beneficial ownership information for legal persons and arrangements
  • Inadequate regulation and supervision of designated non-financial businesses and professions (DNFBPs)

Government Commitment

Despite these challenges, the Mongolian government is committed to further strengthening its anti-money laundering and counter-terrorism financing regime. The country has implemented a number of measures to address the deficiencies identified in the report, including the introduction of new regulations and guidelines for financial institutions.

Key Findings

  • Mongolia has made significant progress in assessing risk and applying a risk-based approach to combating financial crime.
  • The country has strengthened its national cooperation and coordination mechanisms to combat terrorism financing.
  • Mongolia’s criminal justice system is still developing, and there are concerns about the effectiveness of its confiscation and provisional measures.
  • The country’s financial institution secrecy laws remain a concern, as do its customer due diligence and record-keeping requirements.
  • Mongolia’s reliance on third parties for certain financial services remains high, which increases the risk of financial crime.

Recommendations

To further strengthen its anti-money laundering and counter-terrorism financing regime, Mongolia is recommended to:

  • Continue to strengthen its national cooperation and coordination mechanisms to combat terrorism financing
  • Improve its criminal justice system, including its confiscation and provisional measures
  • Address concerns about its financial institution secrecy laws, customer due diligence, and record-keeping requirements
  • Reduce its reliance on third parties for certain financial services

By addressing these deficiencies, Mongolia can further strengthen its anti-money laundering and counter-terrorism financing regime and meet international best practices.