Financial Crime World

Mongolia’s AML/CFT Efforts: Room for Improvement

Mongolia has made progress in combating money laundering (ML) and terrorist financing (TF), but significant challenges remain, according to an assessment by the international community.

Despite having a legal framework that aligns with the Financial Action Task Force (FATF) standards, Mongolia’s AML/CFT regime faces several vulnerabilities. The country’s banking sector is exposed to ML risks, particularly due to:

  • Lack of oversight in the non-bank financial sector
  • Inadequate implementation of anti-money laundering measures by designated non-financial businesses and professions

Terrorist Financing Vulnerabilities

Mongolia’s TF vulnerabilities are significant, including:

  • Limited expertise among relevant agencies
  • Gaps in its legal framework related to TF
  • Lack of oversight of the non-profit sector
  • No implementation of TF measures in designated non-financial businesses and professions

Assessment Findings

The assessment highlights that Mongolia has not conducted a comprehensive risk assessment of its ML and TF threats and vulnerabilities. Additionally, there is limited coordination among government agencies and between these agencies and the private sector to combat ML and TF.

Coordination and Implementation

  • The National Cooperation Council (NCC) and the National Counter Terrorism Coordinative Council (NCTCC) are responsible for coordinating Mongolia’s AML/CFT regime, but their effectiveness in operational activities related to ML or TF is limited.
  • There is no coordination on proliferation financing (PF) in Mongolia.

Recommendations

To address these challenges, Mongolia needs to:

  • Conduct a comprehensive risk assessment of its ML and TF threats and vulnerabilities
  • Improve coordination among government agencies and between these agencies and the private sector
  • Implement measures to mitigate PF risks
  • Strengthen the country’s financial intelligence unit to enable effective operational analysis
  • Finalize its national AML/CFT strategy and implement a comprehensive plan to address its ML, TF, and PF vulnerabilities