Mongolia’s Economic Boom Attracts Foreign Investment, but Raises Money Laundering Threat
Ulaanbaatar, Mongolia - As the Mongolian government has granted mining licenses to foreign companies, the country’s economy has seen a significant boost in recent years. According to official statistics, the mining sector accounted for:
- 20% of the country’s total revenue
- 24% of tax revenue
- 78.4% of export revenue in 2015
However, this rapid growth has also brought new challenges, including increased risks of money laundering and terrorism financing.
Risks and Vulnerabilities
Mongolia is vulnerable to external threats, particularly from neighboring countries such as China and Russia due to its:
- Relatively small population
- Financial sector
- Tourism industry
In 2015, the number of people crossing the border increased by 11.6%, with:
- 37.4% coming from China
- 16.6% from Russia
These border crossing points are considered high-risk areas for money laundering and terrorism financing.
Foreign Laborers and Investors
Over 6,800 foreign citizens from 78 countries worked in Mongolia in 2015, with:
- China
- Russia
- South Korea
- United States being among the top sources of laborers
Their presence has raised concerns about money laundering and other financial crimes.
Cash Transactions and Money Laundering
Experts warn that the country’s reliance on cash transactions increases the risk of money laundering. Despite efforts to promote non-cash settlements, cash remains a dominant form of payment in Mongolia, with:
- Over 706 billion togrog (approximately $330 million USD) in circulation at the end of 2015
“The increasing use of foreign currencies and the lack of transparency in some transactions make it easier for criminals to launder money,” said a financial expert. “We need to strengthen our laws and regulations to prevent money laundering and terrorism financing.”
Government Efforts
The Mongolian government has taken steps to address these concerns, including:
- Enhancing its payment system
- Increasing cooperation with international organizations
However, more needs to be done to ensure that the country’s economic growth is not undermined by financial crimes.
“Increased transparency and regulation are essential to preventing money laundering and maintaining trust in Mongolia’s economy,” said a government official. “We will continue to work closely with international partners to address these risks and promote a stable and secure financial system.”