Financial Crime World

Mongolia Faces Rise in Financial Crimes as New Laws Take Effect

Ulaanbaatar, Mongolia - In an effort to combat the growing menace of financial crimes in the country, Mongolia has introduced new laws that impose criminal liability on legal persons and individuals who engage in illegal activities. The Criminal Code of Mongolia, enacted on July 1, 2017, outlines the types of financial crimes that can result in severe penalties.

New Laws Aim to Combat Financial Crimes

The code imposes criminal liability on legal persons if an official authorized to represent the entity commits an offense specified in the Special Part of the code. This includes:

  • Illegal use of monopoly and dominant position in the market
  • Tax evasion
  • Smuggling goods across the state border
  • Money laundering
  • Production and use of counterfeit banknotes, security or settlement documents
  • Misuse of securities market

Criminal Liability for Individuals

The code also imposes criminal liability on individuals who commit financial crimes. For example:

  • Giving a bribe: punishable by fines ranging from Tugrug 2,700 to Tugrug 14,000, deprivation of the right to hold public office for two to five years, or imprisonment for six months to three years (Article 22.5)

Cases Under New Laws

Since the adoption of the Criminal Code, there have been 31 criminal cases reported, with 10 of them related to environmental and corruption crimes. Two notable cases involve:

  • A CEO of a bank who offered a bribe to a public servant in exchange for increasing the amount of funds deposited in his bank. The CEO was fined Tugrug 7,000 and deprived of the right to hold public office for two years.
    • The bank itself was also held liable and ordered to return the total deposited amount of USD 2.8 million to the state fund. It was also fined Tugrug 125,000 and dismissed from depositing funds of National Health Insurance and Social Insurance for three years.
  • A public servant who accepted the bribe was fined Tugrug 30,000 and deprived of the right to hold public office for two years. He was ordered to return the bribe of USD 30,000 to the state budget.

Independent Authority Against Corruption (IAAC)

The Mongolian government has established the IAAC to investigate and prosecute financial crimes. The authority has issued a statement urging citizens to report any suspicious transactions or activities to its hotline.

Conclusion

As Mongolia continues to grapple with the growing threat of financial crimes, it remains to be seen whether these new laws will be effective in curbing the menace. However, one thing is certain - the government’s commitment to tackling corruption and ensuring transparency in financial transactions is a step in the right direction.