Financial Crime World

Mongolia’s AML/CFT Regime Fails to Meet International Standards

A recent assessment by the Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) authorities has revealed that Mongolia’s legal framework is inadequate in preventing money laundering and terrorist financing. The country’s lack of a comprehensive risk assessment, limited private sector involvement, and absence of coordination mechanisms have raised concerns about its ability to combat these threats.

Vulnerabilities and Concerns

According to the assessment, foreign trusts are not a significant threat in Mongolia, but the country still faces numerous vulnerabilities related to money laundering and terrorist financing. These include:

  • Limited expertise among relevant agencies
  • Significant gaps in its legal framework
  • Negligible implementation of anti-money laundering and counter-terrorism financing measures in non-bank sectors

The assessment also highlighted that Mongolia has exposure to proliferation finance-related sanctions evasion, particularly due to the presence of Democratic Republic of North Korea citizens working in the country. The country’s limited trade with Iran and North Korea is a concern, as it increases the risk of being used for financial transactions that may be related to weapons of mass destruction.

National Cooperation Council (NCC) Limitations

The NCC is responsible for ensuring the implementation of Mongolia’s AML/CFT regime, but its coordination mechanisms are limited. The country also lacks a national AML/CFT strategy, which is essential for guiding efforts against money laundering and terrorist financing.

Conclusion

In conclusion, Mongolia’s AML/CFT regime requires significant improvements to meet international standards. The country must address its vulnerabilities, enhance its risk assessment capabilities, and strengthen its coordination mechanisms to effectively combat money laundering and terrorist financing.