Financial Crime World

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Mongolia’s Financial Crime Investigation Agencies: A Key Player in Combating Money Laundering and Terrorism Financing

In the ongoing battle against money laundering and terrorism financing, financial crime investigation agencies play a crucial role in identifying and disrupting illegal activities. In Mongolia, the establishment of the Financial Information Unit (FIU) has been instrumental in combating these crimes.

The Role of FIU in Combating Money Laundering and Terrorism Financing

The FIU is responsible for receiving reports of suspicious transactions from financial institutions, other natural persons, and entities, analyzing them, and disclosing the results to local law enforcement organizations and foreign FIUs. To effectively carry out its functions, the FIU must have an independent status, free from unnecessary interference and influences.

History of FIU in Mongolia

Mongolia’s FIU was established in 2006 following the approval of Parliament’s “Law on Combating Money Laundering and Financing of Terrorism.” The agency is based on the principles and definition issued by Egmont, an informal international group of Financial Information Units. The law also aligns with the recommendations of the Financial Action Task Force (FATF), which calls upon countries to establish and operate FIUs.

Types of FIU in Mongolia

The FIU in Mongolia has been structured into three types:

  • Law-enforcement-type: Conduct operations under Egmont principles within a police agency responsible for undercover operations and investigations.
  • Administrative-type: Perform duties within the structure of the Central Bank or financial supervisory committee, focusing on compliance with preventive measures for banks and financial institutions.
  • Judicial or mixed-type: Combine elements from both law-enforcement-type and administrative-type FIUs.

Impact of Law-Enforcement-Oriented FIU

The establishment of the law-enforcement-oriented FIU has been crucial in supporting the development of Mongolia’s banking and financial system, as well as maintaining citizens’ trust in the financial sector. As a result, the country’s FIU has been recognized by Egmont Group as one of the leading agencies in Central Asia and Asia.

Conclusion

With its independent status and commitment to implementing international principles and standards, Mongolia’s Financial Information Unit is a vital component in the fight against money laundering and terrorism financing.