Financial Crime World

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Mongolia Fails to Sanction Unlicensed Entities in Anti-Money Laundering Efforts

Ulaanbaatar, Mongolia - A Shocking Revelation

The Financial Regulatory Commission (FRC) has failed to conduct anti-money laundering (AML) and combating the financing of terrorism (CFT) supervision for non-banking financial institutions (NBFIs), leaving the sector vulnerable to illegal activities.

Lack of Implementation of AML/CFT Measures

According to a recent report, Mongolia’s NBFIs have shown little evidence of implementing AML/CFT measures. Moreover, no guidance has been provided to money value transfer providers to support their compliance with obligations under the Combating Money Laundering and Financing of Terrorism Law (CMLTF).

Designated Non-Financial Businesses and Professions

The report also found that designated non-financial businesses and professions (DNFBPs), such as lawyers, notaries, and accountants, are not subject to CDD requirements or obligations to maintain records of customer identification or transaction data.

Furthermore, Mongolia lacks sufficient measures to ensure transparency in the registration of legal persons. Specifically, requiring public disclosure of those directing, managing, and controlling companies is not a requirement. Additionally, bearer shares are not prohibited, leaving room for illegal activities.

Strengthening AML/CFT Framework

The report highlights the need for Mongolia to strengthen its AML/CFT framework, particularly in regards to DNFBPs and non-profit organizations (NPOs). The country’s lack of effective penalties and sanctions against non-compliant entities has raised concerns about its ability to combat money laundering and terrorist financing.

Positive Notes

On a positive note, the report commends Mongolia for establishing formal mechanisms to support cooperation and coordination between domestic authorities in combating ML and FT. However, it also notes that some agencies have indicated problems with inter-agency cooperation and coordination up to this point.

Full Report Available

The full report can be found at [insert link].

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