Financial Crime World

Mongolia’s Anti-Money Laundering Regime Under Scrutiny

Ulaanbaatar, Mongolia - The Mongolian government has been accused of failing to implement effective anti-money laundering (AML) measures, despite receiving technical assistance from international organizations.

Shortcomings in AML Regime

According to a recent report by the Asian Development Bank (ADB), Mongolia’s AML regime is plagued by shortcomings. These include:

  • Lack of political commitment to implementing AML measures
  • Inadequate training for staff
  • High threshold for reporting transactions, set at MNT 20 million (approximately USD 17,000) or more
  • Failure to establish a financial intelligence unit (FIU)
  • Limited momentum to establish an effective AML/CFT system

Key Concerns

The report highlights several key issues that need to be addressed:

  • High Threshold for Reporting Transactions: The current threshold is significantly higher than the accepted international standard, leading to only a handful of cash transactions being reported each day.
  • Lack of Political Commitment: The government’s lack of commitment to implementing AML measures has hindered efforts to establish an effective regime.

Positive Developments

Despite these concerns, the report notes some positive developments:

  • Establishment of Strategic Plan: A strategic plan for implementing the AML regime has been established.
  • Blueprint for IT Services: A blueprint for IT services has been developed.

Recommendations

To address these issues and bring Mongolia’s AML regime in line with international standards, the government is recommended to:

  • Lower the Threshold for Reporting Transactions
  • Establish a Financial Intelligence Unit and provide it with adequate resources and authority
  • Provide Training for Staff on AML/CFT issues
  • Develop a Strategic Plan for implementing the AML regime
  • Increase Momentum to establish an effective AML/CFT system

Conclusion

Mongolia’s AML regime is in need of significant improvement if the country is to meet its international obligations and protect its financial system from money laundering and terrorist financing. The government must take immediate action to address these issues and bring its regime in line with international standards.

Key Issues:

  • High threshold for reporting transactions
  • Lack of political commitment to implementing AML measures
  • Inadequate training for staff
  • Failure to establish a financial intelligence unit
  • Limited momentum to establish an effective AML/CFT system

Recommendations: (see above)