Money Laundering and Terrorism Financing Threats in Mongolia: A National Risk Assessment

Background

Mongolia, as a member of the Asia Pacific Group on Money Laundering (APG), is committed to international efforts to combat money laundering and terrorism financing. In October 2016, Mongolia conducted its first national risk assessment to identify these risks.

Focus Areas of the Assessment

The Mongolian National Risk Assessment aimed to:

1. Identify money laundering and terrorism financing risks in Mongolia
2. Analyze economic situation, relevant regulations, institutional framework, and risks in banks and other financial sectors

Economic Situation in Mongolia

• Mongolia’s economy relies on mining and natural resources
• Foreign investment amplifies money laundering risks
• Large shadow economy and prevalence of crimes contribute to these risks

Legal and Institutional Framework

• Mongolia has laws against money laundering and terrorism financing
• Financial Information Unit and law enforcement authorities are in place
• Improvement of expertise, registration procedures, and investigation techniques is needed

Money Laundering and Terrorism Financing Risks

• Fraud, crimes against the environment, tax evasion, and corruption pose significant risks
• Hidden crimes such as bribery and environmental crimes are a concern
• Organized crime groups and their proceeds are potential dangers

Risks in Banks and Other Financial Sectors

• Changes in bank management and capital, internal structures, and supervision structures pose risks
• Notary services, accounting, auditing, and real estate intermediaries are designated non-financial businesses and professions (DNFBPs) with moderate risk

Key Findings

• A comprehensive strategy is needed to address money laundering and terrorism financing risks in Mongolia
• Sectors and geographic locations deemed high risk should be addressed
• Mongolia is determined to strengthen its commitment to international countermeasures ahead of the upcoming APG mutual evaluation