Financial Crime World

Mongolia’s Anti-Money Laundering and Countering Financing of Terrorism Regulations Face Scrutiny

Mongolia has recently been assessed on its progress in implementing anti-money laundering (AML) and countering financing of terrorism (CFT) regulations. The assessment, which reflects the extent to which the country has implemented the technical requirements of the Financial Action Task Force (FATF) Recommendations, reveals some areas where Mongolia falls short.

Compliance Status

According to the report, Mongolia is:

  • Largely compliant with FATF Recommendation R.1 on assessing risk and applying a risk-based approach
  • Partially compliant with R.2 on national cooperation and coordination
  • Making progress in implementing measures to prevent money laundering and terrorist financing offenses, as outlined in Recommendations R.3 and R.5

Challenges

However, Mongolia faces challenges in implementing several other recommendations, including:

  • Non-compliance with Recommendation R.9 on financial institution secrecy laws, which requires that financial institutions not be prohibited from reporting suspicious transactions or disclosing information to authorities
  • Lack of regulation and supervision of DNFBPs (designated non-financial businesses and professions), as outlined in Recommendations R.22 and R.28
  • Powers of supervisors and law enforcement and investigative authorities are not fully compliant with FATF standards

Progress

Despite these challenges, Mongolia has made some significant strides in implementing AML/CFT regulations, particularly in the areas of:

  • Customer due diligence (Recommendation R.10)
  • Record keeping (Recommendation R.11)

However, more work needs to be done to address remaining gaps and weaknesses.

Conclusion

The report’s findings are likely to inform Mongolia’s efforts to strengthen its AML/CFT framework and improve its overall compliance with FATF standards. The country will need to take concrete steps to address the identified deficiencies and continue to work towards a fully compliant AML/CFT system.