Financial Crime World

Money Laundering and Terrorism Financing Threats in Mongolia: A Wake-Up Call for Law Enforcement

Mongolia, known for its vast terrain and natural resources, faces significant risks from money laundering and terrorism financing. A recent national risk assessment report by the Bank of Mongolia revealed these concerns.

Risks in Mongolia: A Haven for Financial Crimes

Mongolia’s economic focus on mining and natural resources attracts organized crime groups and foreign entities, leading to a high-risk environment for financial crimes. The country’s strategic location as a key trading partner with China, Russia, and South Korea further heightens these risks.

Sectors at Risk: Banking, Real Estate, Construction, and Gambling

  • Banking sector: Dominant in Mongolia’s financial industry, with over $3 billion in assets under management in 2016
  • Real estate, construction, and gambling industries: High risk for money laundering and terrorist financing

Unreported, Unregistered, and Incomplete Crimes: A Significant Problem

Corruption, fraud, and tax evasion are common unreported crimes in Mongolia. Law enforcement agencies often face unequal abilities to conduct effective investigations.

Gathering Data: Risk Assessment and Insights from Various Sources

To understand the scope and impact of hidden crimes, the risk assessment report:

  1. Collected data and information from various state authorities, financial institutions, and private sector entities.
  2. Used a comprehensive risk matrix analytical tool.
  3. Conducted focus group discussions and perception surveys.

Predicate Crimes: Fraud and Other High-Risk Activities

  1. Fraud: Most common predicate crime and greatest threat
  2. Environmental crimes: Significant risk
  3. Tax evasion: High risk
  4. Corruption: High risk

Remittance Sector: A Significant Risk

Prevalence and ease of use make the remittance sector a significant risk for money laundering and terrorist financing activities.

Collaboration: Working Together to Combat Financial Crimes

Mongolia is working with the Asia Pacific Group on Money Laundering (APG) and the Financial Action Task Force (FATF) to:

  1. Develop a robust risk-based approach to financial crimes.
  2. Implement effective countermeasures.

Ongoing Efforts: A Global Battle Against Financial Crimes

Threats from money laundering and terrorism financing are an ongoing challenge, and Mongolia’s experience serves as a reminder that no country is immune to these risks.

All stakeholders, including financial institutions, law enforcement agencies, and private sector entities, must remain vigilant and work together to prevent financial crimes and protect the integrity of the global financial system.