Mongolia’s Swift Exit from the Money Laundering Grey List: International Partnerships and Proactive Policies

In the global war against corruption, an estimated $2.6 trillion is lost annually, fueling societal unrest and economic instability. Developing nations in Asia bear the brunt of this illicit trade, necessitating their proactive engagement in international agreements and Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) initiatives.

Mongolia’s Grey Listing and Challenges

Mongolia, a developing country, found itself on the Financial Action Task Force (FATF) ‘grey list’ in October 2019. This unfavorable designation pointed to significant deficiencies in the Mongolian government’s regimes to counteract money laundering, terror financing, and weapons proliferation.

Remarkable Progress

Despite the challenges, Mongolia demonstrated remarkable progress. Within a year, the country was successfully removed from the grey list. An unprecedented feat for a developing nation, especially amid the global pandemic.

International Collaboration and Training

Addressing complex AML/CFT challenges required international expertise spanning various government and private sector disciplines. Mongolia’s leadership acknowledged the importance of leveraging its network of development partners and donor nations to build a formidable strategy. Here are some key actions taken:

• Working in collaboration with the International Co-operation Review Group initiated by the FATF.
• Organizing workshops and bringing together professionals from different industries.
• Training real estate agents, accountants, precious stones and metals dealers, lawyers, and notaries to report and adhere to new AML/CFT reporting requirements.

Local Buy-in and Proactive Approach

Mongolian leaders’ commitment to cooperation, strong political will, and adaptability proved instrumental in concentrating resources, ensuring changes that brought about the desired results in the shortest time possible. The proactive approach allowed Mongolia to present the FATF review panel with only six key issues to address, instead of the anticipated 20 or so.

A Valuable Lesson

Mongolia’s impressive progress serves as a valuable lesson for developing countries grappling with AML/CFT challenges. Effective communication with the public is vital to secure public support for these measures, and development partners have pledged their unwavering commitment to assisting developing nations in their efforts.

Key Takeaways:

• Developing countries need to engage in international agreements and AML/CFT initiatives to mitigate corruption and promote industry transparency.
• Local buy-in is crucial for meaningful and lasting change.
• AML/CFT initiatives should not be perceived as a burden but rather a tool to decrease corruption and benefit the public.
• Proactive engagement from governments is key to successful implementation.