Mongolia’s Success Story: Combating Money Laundering and Terror Financing

Introduction

Ulaanbaatar, MONGOLIA - In a significant move towards combating corruption and financial crimes, Mongolia has made rapid progress in addressing anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts.

The Cost of Corruption

According to experts, every year an estimated $2.6 trillion is lost to corruption worldwide, undermining the rule of law, hindering economic development, and diverting resources from essential services such as schools and hospitals. Developing countries in Asia are at the forefront of this fight, with many joining international agreements and adopting standards to prevent money laundering.

Mongolia’s Proactive Approach

Mongolia’s proactive approach to AML/CFT has paid off, with the country being removed from the Financial Action Task Force (FATF) “grey list” just 12 months after being placed on it. The FATF is a global watchdog group that monitors countries’ efforts to combat money laundering and terror financing.

Key Factors Contributing to Mongolia’s Success:

• Collaboration with development partners: Experts in AML/CFT from government and private sectors worked closely together to develop an effective strategy.
• Leadership and cooperation: The Ministry of Finance took ownership of the response, enabling multiple agencies to work efficiently towards maximum results.
• Adaptability and focus on reform benefits: Mongolia acted proactively when it was clear that it would be placed on the grey list, addressing deficiencies before being put on the list.

Lessons Learned

Mongolia’s experience offers valuable lessons for other countries facing similar challenges with money laundering and terror financing. International agreements and covenants are crucial, but lasting change can only be achieved when reforms benefit citizens. Effective communication of these benefits is also essential to public support.

International Support

Development partners have sent a clear message to developing countries: they will provide the necessary expertise and support. Mongolia’s success demonstrates that with cooperation, commitment, and proactive approach, even the most complex challenges can be overcome.

As Mongolia continues to strengthen its AML/CFT efforts, it serves as a model for other countries in the region and beyond, highlighting the importance of international collaboration and effective leadership in combating financial crimes.