Mongolia’s Swift Exit from “Grey List” Offers Lessons in Fighting Corruption

A $2.6 Trillion Problem

Corruption is a major obstacle to economic development worldwide, with an estimated $2.6 trillion lost annually. Developing countries in Asia are on the front lines of this battle.

Mongolia’s Proactive Approach

Mongolia’s leaders took a proactive approach to addressing anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies before being placed on the grey list. This allowed the country to focus its efforts and make significant progress in a short period.

Key Factors in Mongolia’s Success

Several factors contributed to Mongolia’s swift exit from the grey list:

• Leadership: Strong political will and cooperation among government agencies allowed for efficient utilization of resources.
• Clear goals: Pre-determined objectives helped conserve time and resources, enabling multiple agencies to move quickly in the same direction.
• International expertise: Working with development partners who have expertise in AML/CFT was crucial to an informed response.
• Communication: The benefits of reforms were communicated to the public, increasing support for anti-money laundering efforts.

Lessons for Other Countries

Mongolia’s experience offers important lessons for other countries facing similar issues with money laundering and terrorist financing:

• Participation in international agreements is essential, but lasting change can only happen when reforms benefit citizens.
• Anti-money laundering efforts should not be seen as arbitrary bureaucratic procedures imposed from outside the country.
• Communication of benefits to the public increases support for reforms.
• Development partners have expertise and resources available to help developing countries address AML/CFT deficiencies.