Financial Crime World

Here is the converted article in Markdown format:

Mongolia Takes Significant Steps to Enhance Anti-Money Laundering and Combating the Financing of Terrorism Efforts

In a major boost to its anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts, Mongolia has taken significant steps to enhance its online electronic system for information exchange.

New Laws and Regulations

Mongolia has recently approved several new laws and regulations aimed at combating money laundering and terrorist financing. The Law on Regulating Money Loans, approved in November 2022, applies to entities that provide collateral loans, such as pawnshops, and requires legal entities with a share capital of MNT 100 million or more to be registered with the Financial Regulatory Commission (FRC).

  • The AML/CFT law was also amended, requiring entities providing money loan services to comply with AML/CFT requirements.
  • Additionally, the Criminal Code was revised to strengthen sentencing policies for corruption crimes, which are identified as high-risk predicate offenses in Mongolia’s Second National Risk Assessment of Money Laundering/Terrorist Financing.

goAML Software Introduction

To improve report quality and time effectiveness, Mongolia introduced the goAML software developed by the United Nations Office on Drugs and Crimes. The software was officially launched on July 1, 2022, and has been successfully used by entities from all obligated reporting sectors to submit suspicious, cash, and foreign settlement transaction reports.

Supervisory Authorities

Mongolia’s supervisory authorities, including the Bank of Mongolia, FRC, and professional associations, have continued conducting ML/TF risk assessments, off-site and on-site supervision, and monitoring compliance with AML/CFT and TFS obligations. Outreach activities have been organized for reporting entities, disseminating knowledge and feedback.

Revised Regulations

  • The Regulations on Conducting Off-Site and On-Site AML/CFT/CPF Supervision of Banks were revised and updated in December 2022, enabling supervisors to update risk assessment tools and procedures on an ongoing basis.
  • The Financial Regulatory Commission also revised its Regulation on Offsite and On-Site Supervision of Non-Banking Sector Reporting Entities in January 2023.

VASPs Registration

Mongolia has approved eight regulations related to VASPs registration process and operational requirements. A total of 11 VASPs have obtained official registration, while 19 entities that failed to meet the necessary requirements were sent rectification notices.

  • The Financial Regulatory Commission is continuously monitoring registered VASPs through on-site and off-site supervision and has introduced blockchain analytics programs to effectively monitor compliance.

Working Group Established

A working group was established by the Decree No. A-110 of the Governor of Bank of Mongolia in April 2022 to make amendments to the AML/CFT Preventive Measures Regulation in compliance with the AML/CFT Law and Law on VASP. The working group consists of officials from the Ministry of Justice and Home Affairs.

These significant steps demonstrate Mongolia’s commitment to enhancing its AML/CFT efforts, ensuring a safer and more transparent financial system for its citizens.