Mongolia Struggles to Combat Money Laundering and Terrorism Financing

Ulaanbaatar, Mongolia - A recent report has highlighted serious shortcomings in Mongolia’s efforts to combat money laundering and terrorism financing.

Insufficient Involvement of Audit Committee and Internal Audit Unit

The audit committee and internal audit unit have been found to be insufficiently involved in the process. Without their active participation, it is challenging for Mongolia to effectively prevent these crimes.

Inadequate Bank Monitoring Activities

• Banks’ specialized monitoring activities are inadequate.
• There is a lack of coordination and oversight.
• Transaction quantity monitored by banks is below par, particularly when it comes to high-risk transactions such as those involving:
  • Politically exposed persons
  • Individuals from countries with weak anti-money laundering regulations

Lack of Effective Risk Assessment

There is a lack of effective risk assessment in place. No systematic approach exists for identifying and mitigating risks.

High-Risk Areas

• Non-profit sector: Only 3,862 out of 18,943 non-government organizations submitted their tax statements on time in 2017.
• Transportation and freight forwarding sector: Only 100 out of 300 licensed companies are actively engaged in operations. A lack of a robust monitoring system and inadequate supervision by authorities have raised concerns about the potential for money laundering and terrorism financing.

Recommendations

To strengthen its anti-money laundering and counter-terrorism financing measures, Mongolia needs to take immediate action:

• Improve coordination between government agencies
• Increase transparency and accountability in the non-profit sector
• Enhance risk assessment and monitoring activities

Overall, the report concludes that Mongolia must prioritize strengthening its measures to prevent money laundering and terrorism financing.