Risk Assessment in Financial Crime in Mongolia Uncovers Significant Threats
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In a bid to combat money laundering and terrorism financing, Mongolia has conducted its first national risk assessment, identifying key areas that pose significant threats to the country’s financial system.
Background
The assessment was carried out in October 2016 as part of Mongolia’s commitment to international efforts to combat financial crime. The country relied heavily on mining and natural resources, which poses significant money laundering risks due to foreign investment. Additionally, Mongolia has a large shadow economy and prevalence of crimes, contributing to these risks.
Objectives
The assessment aimed to identify money laundering and terrorism financing risks in Mongolia, analyze the economic situation, relevant regulations, institutional framework, and risks in banks and other financial sectors.
Key Areas Assessed
- Economy: The country’s reliance on mining and natural resources poses significant money laundering risks due to foreign investment.
- Relevant Regulations: Laws are in place against money laundering and terrorism financing, including the Financial Information Unit and law enforcement authorities.
- Institutional Framework: Expertise, registration procedures, and investigation techniques were identified as areas for improvement.
Key Findings
The report highlights several significant money laundering and terrorism financing risks:
Moderate Risk Levels
- Notary services, accounting, auditing, and real estate intermediaries were deemed to have moderate risk levels.
- The report recommends that these sectors be addressed as part of a comprehensive strategy to combat money laundering and terrorism financing.
Hidden Crimes
- Bribery and environmental crimes are also concerns, as well as organized crime groups and their proceeds.
Recommendations
The assessment’s key findings highlight the need for a comprehensive strategy to address money laundering and terrorism financing risks in Mongolia. The country is determined to strengthen its commitment to international countermeasures ahead of the upcoming Asia Pacific Group on Money Laundering (APG) mutual evaluation.
Strengthening Commitment
- Mongolia can better equip itself to tackle financial crime and prevent it from undermining the country’s economic stability by implementing a comprehensive strategy.
By conducting this national risk assessment, Mongolia has taken a significant step in combating money laundering and terrorism financing. The country is committed to strengthening its commitment to international countermeasures and addressing key areas of concern to ensure the stability and security of its financial system.