Mongolia Takes Steps to Strengthen Anti-Money Laundering Regime

Ulaanbaatar, Mongolia - The Mongolian government has made significant progress in establishing a comprehensive anti-money laundering (AML) regime, despite facing numerous challenges.

Technical Assistance Project

A technical assistance project aimed at strengthening the country’s AML/CFT (Combating the Financing of Terrorism) system was implemented by the Asian Development Bank. The project focused on several key areas:

Establishment of a financial intelligence unit
Development of training programs for key institutions
Creation of a strategy to support the implementation of an effective AML regime

Challenges and Findings

According to the project’s findings, Mongolia’s current laws and regulations do not fully comply with international standards set by the Financial Action Task Force (FATF). The country’s draft law, which was under consideration in 2005, had several shortcomings, including:

High threshold for reporting transactions

The project team conducted an analysis of the draft law and provided suggestions for amendments to improve its effectiveness. They also developed a comprehensive strategy for implementing an effective AML regime, which included plans for strengthening institutions and increasing awareness among financial sector professionals.

Challenges Faced

However, the project faced challenges due to:

Delays in the introduction of the law
Lack of political commitment from some quarters
Absence of a functional legal framework

The team was able to provide limited training to key institutions, but their efforts were hampered by these challenges.

Progress Made

Despite these challenges, the project made significant progress during its third onsite visit in August-September 2006. The team:

Re-engaged the assistance of domestic consultants
Established an office in Ulaanbaatar
Conducted activities aimed at strengthening Mongolia’s financial system and improving its understanding of AML/CFT issues

Future Evaluation

The project’s findings will be used as input for Mongolia’s Mutual Evaluation by the Asia-Pacific Group (APG) on Money Laundering and Terrorist Financing. The evaluation is expected to provide an assessment of Mongolia’s AML/CFT regime and identify areas for improvement.

Conclusion

While Mongolia still faces significant challenges in establishing a robust AML regime, the country has made progress in recent years. With continued support from international partners and increased commitment from local authorities, Mongolia can improve its ability to combat money laundering and terrorist financing.