Financial Crime World

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Mongolia Grapples with Financial Crimes and Terrorism Funding Concerns

In a move to strengthen its fight against financial crimes and terrorism funding, Mongolia has been assessed by international authorities on its compliance with key recommendations.

Compliance Assessment Highlights

According to the latest report, Mongolia faces several challenges in implementing the necessary measures to prevent money laundering and terrorist financing. The report highlights areas where Mongolia is considered:

  • Largely Compliant (LC):
    • Assessing risk and applying a risk-based approach (R.1)
    • National cooperation and coordination (R.2)
    • Confiscation and provisional measures (R.4)

However, it also identifies several gaps, particularly in the areas of:

  • Targeted Financial Sanctions Related to Terrorism and Proliferation:
    • R.6
    • R.7

Challenges Identified

Mongolia is considered:

  • Partially Compliant (PC):
    • Implementing measures to prevent terrorist financing, including targeting non-profit organizations (R.8) and regulating financial institutions secrecy laws (R.9)
    • Maintaining customer due diligence (R.10), keeping records (R.11), and relying on third parties (R.17)

The report notes that Mongolia has made progress in implementing measures to prevent money laundering, including:

  • Targeting Correspondent Banking (R.13)
  • Wire Transfers (R.16)

However, it also identifies areas where the country needs to improve, such as:

  • Implementing Targeted Financial Sanctions Related to Terrorism and Proliferation:
    • R.6
    • R.7
  • Strengthening Regulation and Supervision of Financial Institutions (R.26)

Conclusion

The report concludes that Mongolia has a long way to go in fully implementing the necessary measures to prevent financial crimes and terrorism funding. The country’s authorities must take concrete steps to address these concerns and ensure that it is not used as a conduit for illicit funds.

Expert Warning

Experts warn that failure to comply with international standards could have serious consequences, including:

  • Increased scrutiny from international partners
  • Potentially even sanctions

Mongolia’s efforts to combat financial crimes and terrorism funding are closely watched by the international community, and its progress will be monitored closely in the coming years.