Financial Crime World

Title: Mongolia’s National Strategy to Combat Money Laundering and Terrorism Financing

Background

Mongolia, a landlocked country in Central Asia, is the latest addition to the global fight against Money Laundering (ML) and Terrorrorism Financing (TF). In recognizing the negative impact of these illicit activities, the Mongolian Government has initiated a national strategy to combat ML/TF.

The Threat of Money Laundering and Terrorism Financing

Mongolia, due to its weaker financial system and geographical location, has become a transit center for criminal activities. ML and TF pose a significant threat to global financial security, with sources mainly derived from illegal activities such as:

  • Human trafficking
  • Drug sales
  • Arms trading
  • Corruption and bribery
  • Smuggling
  • Environmental crimes

Mongolia’s legal framework for combating ML/TF began with the Law on Combating Money Laundering and Terrorism Financing, which was approved in 2006. However, Mongolia still faces challenges in fully adhering to the standards set by the Financial Action Task Force (FATF). In 2014, Mongolia was identified as a “high risk and non-cooperative country”. After necessary legislative changes, they were removed from the list in 2016.

The Need for a Comprehensive Strategy

With international organizations pushing for full compliance, Mongolia recognized the need for a comprehensive strategy to ensure the safety and security of its financial sector. The National Strategy for Anti-Money Laundering and Countering Financing of Terrorism was developed as a response.

Objectives of the National Strategy

The National Strategy aims to create a favorable environment for cooperation in the financial sector by addressing the following objectives:

  1. Improving coordination and cooperation among relevant agencies
  2. Developing a national ML/TF crime risk assessment methodology and conducting assessments
  3. Enhancing public awareness and preventing financial and non-financial services providers from being exposed
  4. Improving the legal framework
  5. Increasing supervision of high-risk sectors
  6. Improving the capacity of competent authorities to investigate and detect offenses
  7. Improving legal frameworks for international cooperation
  8. Strengthening AML/CFT capacity

Implementation and Financing

The implementation of the strategy is expected to commence in 2017 and will be financed through a combination of state and local budgets, grants from international organizations, and other sources. The National Committee is responsible for coordinating efforts and monitoring progress.