Financial Crime World

Mongolia’s Efforts to Combat Money Laundering and Financing of Terrorism

Growing Economy, Increased Vulnerability

As Mongolia’s economy continues to grow, so does its vulnerability to money laundering and financing of terrorism. The country has seen a significant increase in foreign investment, particularly in the mining sector.

  • In 2015, the number of people crossing the border increased by 504,200 or 11.6 percent.
  • China was the top source country, accounting for 46.1 percent of all border crossings.

Foreign Trade and Money Laundering

Foreign trade is widely used in money laundering at an international level. Illegal funds are often added to normal product prices stated in letters of credits or trade contracts, increasing the amount of payments to be transferred.

  • According to a report by the National Statistical Office, foreign trade is widely used in money laundering.
  • The country’s central bank has implemented various measures to prevent money laundering and financing of terrorism.

Strengthening the Financial Sector

Mongolia’s financial sector is highly exposed to money laundering and financing of terrorism threats. To combat these threats, the country has taken steps to strengthen its financial sector.

  • As of 2015, the banking sector composed 95.7 percent of total assets.
  • The country’s central bank, the Bank of Mongolia, has implemented various measures to prevent money laundering and financing of terrorism.
  • These include strengthening customer due diligence, reporting suspicious transactions, and implementing anti-money laundering systems.

International Cooperation

Mongolia is a member of several international organizations aimed at combating money laundering and financing of terrorism.

  • The Asia-Pacific Group on Money Laundering (APG) has identified foreign trade as a widely used method in money laundering.
  • Mongolia has implemented various measures to prevent foreign trade-based money laundering crime, including strengthening customs and border control, conducting regular inspections on export-import activities, and implementing anti-money laundering systems.

Conclusion

Mongolia’s financial sector is highly exposed to money laundering and financing of terrorism threats. To combat these threats, the country needs to continue strengthening its financial sector, implementing effective anti-money laundering measures, and enhancing international cooperation.

Sources:

  • National Statistical Office
  • Bank of Mongolia
  • Asia-Pacific Group on Money Laundering (APG)
  • International Cooperation Review Mechanism