Financial Crime World

Mongolia Enhances Anti-Money Laundering and Combating Financing of Terrorism Efforts

Strengthening the Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) Regime

In a bid to strengthen its anti-money laundering (AML) and combating financing of terrorism (CFT) regime, Mongolia has taken significant steps to enhance information exchange, supervision, and compliance.

Enhancing Information Exchange

  • 274 public and private sector institutions are now connected to an online electronic system, accelerating the exchange of information and strengthening the AML/CFT framework.
  • The system stores data from 108 government organizations, enabling swift and secure sharing of information between entities.

Strengthening Supervision and Compliance

  • The Parliament of Mongolia recently approved the Law on Regulating Money Loans, which applies to entities that provide collateral loans, such as pawnshops.
    • Legal entities with a share capital of 100 million MNT or more in provincial areas and 300 million MNT or more in the capital city are required to register with the Financial Regulatory Commission (FRC).
    • As reporting entities under the AML/CFT Law, they must comply with AML/CFT requirements.
  • The Criminal Code was amended to strengthen sentencing policies for corruption crimes, identified as high-risk predicate offenses in the Second National Risk Assessment of Money Laundering/Terrorism Financing.
    • The amendment introduces stricter penalties, including lifetime deprivation of the right to hold public positions.

Improving Report Processing and Analysis

  • FIU-Mongolia has introduced the goAML software developed by the United Nations Office on Drugs and Crime since July 1, 2022.
    • This software enables entities to submit suspicious transaction reports, cash settlement transactions, and foreign exchange transactions in a more efficient manner.

Ongoing Supervisory Activities

  • Supervisory authorities, including the Bank of Mongolia, FRC, and professional associations, have continued conducting:
    • Risk assessments
    • Off-site and on-site supervision
    • Monitoring compliance with AML/CFT and TFS obligations
  • Outreach activities have been organized for reporting entities, disseminating knowledge and feedback, while awareness-raising activities have been held for the general public.

Regulatory Revisions

  • The Bank of Mongolia has revised its Regulations on Conducting Off-Site and On-Site AML/CFT/CPF Supervision of Banks.
    • Enabling supervisors to update risk assessment tools and procedures on an ongoing basis.
  • The FRC has also revised its Regulation on Off-Site and On-Site Supervision to Non-Banking Sector Reporting Entities in the Field of Combating ML/TF.

Virtual Asset Service Providers (VASPs)

  • The Financial Regulatory Commission has approved eight regulations related to the registration process and operational requirements for VASPs.
    • Ensuring that these entities comply with AML/CFT rules.
  • Eleven VASPs have been registered, while 19 others were sent rectification notices for failing to meet registration requirements.

Ongoing Efforts

  • The working group established by the Governor of the Bank of Mongolia in April 2022 is tasked with amending the AML/CFT Preventive Measures Regulation in compliance with the AML/CFT Law and Law on VASP.
    • Consisting of officials from the Ministry of Justice and Home Affairs, among others.

These developments demonstrate Mongolia’s commitment to strengthening its AML/CFT regime, enhancing transparency, and combating financial crimes.