Financial Crime World

Preventing Financial Crime in Mongolia

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In today’s global economy, financial crime poses significant threats to economic security and sustainable development. Money laundering and terrorism financing are two of the most pressing concerns, often linked to illegal activities such as human trafficking, drug smuggling, and corruption.

The Risk to Mongolia

Mongolia is not immune to these risks, with its financial sector vulnerable to exploitation by criminals using it as a transit center for illicit funds. In recent years, Mongolia has been identified as a “high-risk” country by international organizations due to its weak anti-money laundering and combating terrorism financing (AML/CFT) system.

Historical Context

In 2006, Mongolia introduced the Law on Combating Money Laundering and Terrorism Financing, but despite efforts to strengthen its AML/CFT framework, the country was still identified as a “high-risk” jurisdiction in 2014. However, after the passage of new laws and regulations, Mongolia was removed from the “grey list” by the Financial Action Task Force (FATF) in June 2014.

International Concerns

Despite these efforts, international organizations such as the International Monetary Fund (IMF) and Asian Development Bank (ADB) have continued to urge Mongolia to further strengthen its AML/CFT framework to comply with FATF recommendations. The country’s financial sector remains at risk of exposure to money laundering and terrorism financing if it fails to implement these recommendations.

National Strategy

To address this issue, the Mongolian government has developed a National Strategy for anti-money laundering and countering financing of terrorism (2017-2020), aimed at strengthening its AML/CFT capacity and implementing FATF recommendations. The strategy outlines measures to:

  • Improve cooperation between law enforcement agencies
  • Enhance transparency in financial transactions
  • Increase public awareness about the risks of money laundering and terrorism financing

Prevention Measures

To prevent financial crime in Mongolia, experts recommend that the government takes a comprehensive approach by implementing the National Strategy, increasing international cooperation, and strengthening its AML/CFT framework. By doing so, Mongolia can:

  • Reduce its risk exposure to money laundering and terrorism financing
  • Promote economic stability
  • Ensure sustainable development

Conclusion

Preventing financial crime in Mongolia requires a collaborative effort between government agencies, law enforcement organizations, and the private sector. By implementing the National Strategy and strengthening its AML/CFT framework, Mongolia can reduce its risk exposure to money laundering and terrorism financing, promote economic stability, and ensure sustainable development.