Financial Crime World

Mongolia’s Progress in Combating Money Laundering and Terrorist Financing: From FATF’s Gray List to Basel AML Index Improvement

Mongolia’s Achievements in Combating Money Laundering and Terrorist Financing (ML/TF)

Ulaanbaatar, Mongolia, November 29, 2023 - Mongolia’s dedication to combating money laundering and terrorist financing (ML/TF) has yielded remarkable progress, as reported by both the Financial Action Task Force (FATF) and the Basel AML Index.

FATF Gray List and Basel AML Index Rankings

  • Mongolia moved down the FATF’s gray list in October 2019 due to its substantial progress enhancing its anti-money laundering and countering the financing of terrorism (AML/CFT) framework (FATF Report).
  • The country ranked 83rd out of 152 countries in the 2023 Basel AML Index, a considerable improvement from the 20th position two years prior.

Basel AML Index - Improvements in ML/TF Risk Domains

The Basel AML Index, an annual evaluation by the Basel Institute on Governance, provides risk scores based on a country’s AML/CFT framework and publicly available data from organizations such as FATF, Transparency International, World Bank, and World Economic Forum.

Mongolia’s Progress in All Five ML/TF Risk Domains

  1. Quality of AML/CFT framework: Mongolia has made significant progress in this area.
  2. Bribery and corruption: improvement seen in this domain.
  3. Financial transparency: Mongolia’s improvement in financial transparency is a notable achievement.
  4. Public transparency: The country’s progress in public transparency is crucial.
  5. Legal and political risks: Mongolia has shown marked progress in addressing these risks.

Collaborative Efforts to Combat ML/TF

The success of Mongolia’s efforts did not come easily; it required collaboration from various stakeholders:

  • The State Great Khural.
  • The Cabinet.
  • Public and private organizations.

Together, they have implemented comprehensive strategies to combat ML/TF, expanded international cooperation, strengthened capacity and funding of organizations involved, and focused on the detection and implementation of related crimes.

Basel Institute on Governance - Mongolia’s Progress as an Example

The Basel Institute on Governance, an independent not-for-profit organization specializing in countering corruption, improving governance standards, and combating ML/TF, confiscation, and return of illegal assets, highlighted Mongolia as a prime example of progress.

Importance of Maintaining a Focus on ML/TF Crimes

It is essential to maintain a strong focus on the implementation and detection of ML/TF crimes, as well as continued expansion of international cooperation and preventive measures.

Basel AML Index - Annual Risk Scores and Global Cooperation

The Basel AML Index, which has published annual risk scores since 2012, helps countries, governments, and organizations identify patterns, assess risks, and allocate resources efficiently to mitigate ML/TF threats.

Continued Efforts in Combating ML/TF

As international cooperation and shared responsibility against ML/TF strengthen, countries like Mongolia that demonstrate progress in this area will continue to inspire optimism and serve as models for others to follow.

Limitations and the Importance of Multifaceted Approaches

Remember, no single index can comprehensively measure the entirety of ML/TF risk factors. Countries, governments, and private organizations must rely on various sources and assessments to develop effective strategies and risk calculations. The Basel AML Index is just one piece of this multifaceted puzzle that continues to evolve as countries make strides towards combating ML/TF, bolstering global financial security, and upholding the integrity of the international financial system.