Mongolia’s Financial Sector Under Scrutiny: National Risk Assessment on Financing of Terrorism and Proliferation
Ulaanbaatar, Mongolia – The Financial Information Unit of the General Intelligence Agency, in collaboration with the National Counter Terrorism Coordinative Council, has completed a comprehensive national risk assessment on the financing of terrorism and proliferation in Mongolia.
Understanding the Risk Assessment
The assessment aimed to evaluate the risks of various sectors and organizations that could potentially be used for financing terrorism and proliferation activities in Mongolia. The assessment was based on data and reports from international organizations, government agencies, and local organizations. The following sections outline the methodology used for the assessments and the findings.
Threat and Vulnerability Criteria
Threat Criteria
The threat criteria assessed potential internal and external threats and conditions in sectors, organizations, and activities that are at risk of financing terrorism and proliferation. These criteria included:
- Sector dimensions and range
- Understanding of the financing of terrorism and proliferation
- Possible circumstances for products and services to be used
- Record of related violations
Vulnerability Criteria
The vulnerability criteria assessed challenges, mistakes, and vulnerabilities to combat and prevent financing of terrorism and proliferation. These criteria included:
- Legal environment
- Cooperation and information exchange
- Regulation and inspection
- Preventive activities
Risk Assessment Methodology
Assessment for Each Question to Determine Risks of an Organization and its Activity Directions
Scores from 0-5 were given to each question of the threat and vulnerability criteria, resulting in a total evaluation score for each sector, organization, or activity direction between 0 and 40. The risk level was determined based on the following methodology:
| Assessment for Each Question | Determination of Risks |
|---|---|
| 0-1 | Very low risk |
| 2 | Low risk |
| 3 | Moderate |
| 4 | High risk |
| 5 | Very high risk |
Risk Level of Total Assessment for all Criteria to Determine Risks to Finance of Terrorism and Proliferation by Organizations
Risk levels were determined by adding up the scores from all the criteria:
| Risk Level | Total Assessment Score |
|---|---|
| Very low risk | 0-8 |
| Low risk | 9-16 |
| Moderate | 17-24 |
| High risk | 25-32 |
| Very high risk | 33-40 |
Risk Assessment Summary
The findings of the risk assessment showed that Mongolia is at an average risk level, with a “yellow” evaluation, in terms of financing terrorism and proliferation. The assessment identified sectors, organizations, and businesses with high potential risk to be involved and exploited in such activities, compared to the activities of competent authorities.
The report provided detailed analysis of risks in:
- Banking and financial entities
- Real estate agents
- Commercial banks
- Legal entities
- Border inspections
These sectors are of particular concern due to the potential for exploitation and high value transactions. Further efforts are required to enhance the regulatory and preventive measures to address these risks and protect Mongolia’s financial sector from being used for these illicit activities.