Mongolia Implements Tough AML Regulations to Combat Money Laundering and Terrorist Financing
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Strengthening Financial Sector Resistance to Illicit Activities
Ulaanbaatar, Mongolia - Mongolia has introduced a robust anti-money laundering (AML) law aimed at preventing the misuse of its financial system for money laundering and terrorist financing. This new legislation is a significant step forward in the country’s efforts to combat these illicit activities.
Key Provisions of the Law
The Law on Combating Money Laundering and Anti-Terrorism Financing, which came into effect earlier this year, establishes the legal framework for organizations to implement preventative measures against money laundering and the financing of terrorism. The law requires financial institutions, including:
- Banks
- Insurance companies
- Securities dealers
to comply with strict AML regulations.
Customer Due Diligence and Reporting Requirements
The law sets out detailed guidelines for:
- Customer due diligence: Financial institutions must have in place procedures to identify and verify customers’ identities.
- Reporting suspicious transactions: Institutions are required to report any suspicious transactions to the authorities.
- Record-keeping requirements: Institutions must maintain accurate records of all financial transactions.
Effective Internal Controls and Risk Management Systems
The law requires financial institutions to have:
- Effective internal controls: To prevent money laundering and terrorist financing.
- Risk management systems: To identify and mitigate potential risks associated with AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism).
Supervision and Monitoring
The legislation empowers the Financial Regulatory Commission (FRC) to:
- Monitor financial institutions’ compliance with AML regulations.
- Conduct regular supervisions and inspections.
Expert Reaction
Experts say that this new law is a significant step forward in Mongolia’s efforts to combat money laundering and terrorist financing, and will help to strengthen the country’s position as a major player in international finance.