Financial Crime World

Here is the converted article in markdown format:

Mongolia’s Anti-Money Laundering and Counter-Terrorist Financing Arrangements Face Challenges

The international community has recently highlighted significant shortcomings in Mongolia’s anti-money laundering (AML) and counter-terrorist financing (CFT) arrangements. The country’s legal framework lacks a comprehensive understanding of money laundering and terrorist financing risks, with foreign trusts being a rare feature in the Mongolian economy.

Challenges in AML/CFT Regime

While Mongolia has made some progress in international cooperation, including completing its first money laundering/terrorist financing national risk assessment (NRA), significant gaps remain in its AML/CFT regime. The NCC’s draft national AML/CFT strategy is not yet in force and lacks input from the NRA.

Identified Shortcomings

The assessment also identified several shortcomings, including:

  • Limited expertise among relevant agencies
  • Significant gaps in Mongolia’s legal framework related to terrorist financing
  • Lack of oversight of non-profit organizations
  • Negligible implementation of CFT measures in the non-bank sector and designated non-financial businesses and professions (DNFBPs)

Mongolia appears to have exposure to proliferation finance-related sanctions evasion, with approximately 1,500 Democratic Republic of North Korea citizens working in Mongolia, paid via formal arrangements between Mongolia and DPRK.

Recommendations for Improvement

To address these challenges, Mongolia must prioritize improvements in its AML/CFT risk assessment, coordination and policy setting, as well as enhance financial intelligence and analysis. The country also needs to strengthen its cooperation and coordination on proliferation finance, including with international partners.

Call to Action

The international community urges Mongolia to take immediate action to address these shortcomings, ensuring a robust and effective AML/CFT regime that protects the country’s financial system and combats terrorist financing and money laundering.