Cooperation Between International Organizations Yields Practical Results in Fighting Money Laundering and Terrorist Financing

In a significant demonstration of cooperation between international organizations, the International Trade Centre (ITC) and the Asian Development Bank (ADB) have collaborated on a Technical Assistance (TA) project to combat money laundering and terrorist financing in Mongolia.

The Project

The TA project, which was completed in September 2006, aimed to establish an effective anti-money laundering and combating the financing of terrorism (AML/CFT) regime in Mongolia. The project involved a team of international consultants who worked closely with local authorities to develop a blueprint for implementing AML/CFT measures in the country.

Challenges and Shortcomings

Despite the efforts made, the enacted law has significant shortcomings that depart from the accepted international standards. These shortcomings were discussed in detail in the report. The lack of political commitment and the absence of a lower reporting threshold for cash transactions were major obstacles to establishing an effective AML/CFT system.

• The team encountered difficulties in providing training as intended due to the delay in passing the law, which was not in place during most of the project period.
• This resulted in limited progress in setting up the Financial Intelligence Unit (FIU) and implementing other post-legislative activities.

Third On-Site Visit

During their third visit to Mongolia from August 25 to September 17, 2006, the international consultants, John Broome, Hugh Dixon, and Pat O’Sullivan worked closely with local authorities to finalize the project. They were assisted by two domestic consultants, Mr. Bayardalai Bat-Ireedui and Mr. Erdenechuluun Sukh-Erdene.

• The team occupied office accommodation in the main Bank of Mongolia building, which provided them with necessary facilities for their work.
• The team was able to set up an IT system using equipment provided for in the TA budget, which was later made available to the FIU upon completion of the project.

Conclusion

Despite the challenges faced, the cooperation between ITC and ADB has yielded practical results in fighting money laundering and terrorist financing in Mongolia. The project has contributed to raising awareness about the importance of implementing effective AML/CFT measures in the country. However, it is essential that the authorities take immediate action to address the shortcomings identified and ensure the implementation of the AML/CFT regime in line with international standards.

• The report highlights the need for continued cooperation between international organizations and local authorities to strengthen Mongolia’s efforts in combating money laundering and terrorist financing.