Financial Crime World

Mongolia’s Anti-Money Laundering and Terrorism Financing Regulations

Overview

In 2018, Mongolia revised its law on combating money laundering and financing of terrorism to strengthen the country’s anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The Revised Law on Combating Money Laundering and Financing of Terrorism (2018) and the Procedure on Prevention activities from Money laundering and Terrorism financing under Appendix 1 of Decree No A/26 by the President of Mongol Bank (2019) outline the regulations and procedures for preventing money laundering and terrorism financing.

Key Provisions

Revised Law on Combating Money Laundering and Financing of Terrorism

  • Expanded Definition: The law expands the definition of money laundering to include obtaining or holding assets known to be illegally obtained.
  • Reporting Requirements: Reporting entities, such as banks, financial institutions, insurance companies, and others, are required to report suspicious transactions above MNT 20 million (approximately USD7,283) to the Financial Intelligence Unit within 5 days.

Procedure on Prevention activities from Money laundering and Terrorism financing

  • Broadened Scope: The procedure broadens the scope of reporting entities to include legal and business consulting service providers that undertake certain transactions on behalf of clients.
  • Increased Reporting Requirements: The law aims to enhance Mongolia’s AML/CFT regime by increasing reporting requirements and investigative authority.

Financial Information Unit (FIU)

The FIU is responsible for receiving reports from financial institutions and analyzing them to identify potential money laundering or terrorism financing activities. There are three types of FIUs:

Types of FIUs

  • Law-enforcement-type: Focuses on law enforcement and investigation.
  • Administrative-type: Deals with administrative tasks and reporting.
  • Judicial/mixed-type: Combines elements of both law enforcement and administration.

Conclusion

Mongolia’s Revised Law and Procedure aim to strengthen the country’s AML/CFT regime by increasing reporting requirements and investigative authority. By expanding the definition of money laundering, broadening the scope of reporting entities, and enhancing the role of the FIU, Mongolia is taking steps to prevent money laundering and terrorism financing.