MIAT Boeing makes emergency landing in Beijing www.news.mn

A Boeing aircraft from MIAT, Mongolian airlines had to make an emergency landing at Beijing airport after one of the engines failed. The incident took place earlier today (2 July) at 1.23 p.m.. Chartered flight OM302 was returning from Seoul after repatriating 170 Mongolians who had been stranded in South Korea. The aircraft took off at 05.40 p.m. from Chinggis Khaan international airport and was expected to return at 12.20 p.m. Therefore, another MIAT aircraft took off from Mongolia to Beijing to collect the returning passengers.

PM U.Khurelsukh to continue to lead Mongolian Government www.news.mn

Prime Minister U.Khurelsukh will continue to serve as head of the Mongolian Cabinet after 93.3 percent of parliament voted for him; only one Democratic Party member, B.Purevdorj, refused. Therefore, U.Khurelsukh becomes the 31st Prime Minister of Mongolia. Now, he is busy forming the new Cabinet.

U.S. House passes bill to sanction Chinese banks over Hong Kong www.reuters.com

WASHINGTON (Reuters) - The U.S. House of Representatives passed legislation on Wednesday that would penalize banks doing business with Chinese officials who implement a national security law that House Speaker Nancy Pelosi called a “brutal, sweeping crackdown” on Hong Kong.

Naadam Festival becomes the longest holiday www.news.mn

The Mongolian Government has amended Law on Celebrations and extended the public holiday during the Naadam Festival from three days to five. However, this year, Naadam coincides with a weekend, so Mongolians will get three days of holiday on 11-15 July.

‘For the 1st time in living memory’: IMF expects Asian economy to shrink as it downgrades forecast www.rt.com

The coronavirus outbreak has been very costly to Asian economic development, the International Monetary Fund (IMF) said as it revised down its forecast for the region and warned of possible protracted recovery.
“For the first time in living memory, Asia’s growth is expected to contract by 1.6 percent—a downgrade to the April projection of zero growth,” Chang Yong Rhee, director of the IMF’s Asia and Pacific Department, wrote in a blog post.

Charter flights to be conducted in July www.montsame.mn

According to the decision made by the State Emergency Commission, Mongolia will conduct more charter flights in July to repatriate its citizens, including:

Mongolia not to re-open its borders in July www.montsame.mn

Director General of the Consular Department of the Ministry of Foreign Affairs L.Munkhtushig gave a briefing today at the press briefing of the Operative team of the State Emergency Commission (SEC).

Mongolia reports no new COVID-19 cases, 1 more recovery www.xinhuanet.com

July 1 (Xinhua) -- Mongolia conducted a total of 406 tests for COVID-19 in the last 24 hours and the results were all negative, with the national tally remaining at 220, the country's National Center for Communicable Diseases (NCCD) said Wednesday.

Moody's - Mongolia faces liquidity risks as coronavirus squeezes export revenue and limits financing options www.moodys.com

Moody's Investors Service says in a new report that Mongolia is facing rising external vulnerability risks amid the coronavirus pandemic, as pressures on export revenue coupled with highly uncertain access to external financing threaten already weak foreign exchange reserve adequacy.

Moreover, the government's borrowing requirements will increase markedly to fund a sizable stimulus package, which raises liquidity risks. Recently approved emergency assistance from the International Monetary Fund (IMF) and other multilateral agencies alleviates some of these risks, although the size of funding indicated so far remains short of financing needs.

"Mongolia's primary commodities, coal and copper, have fallen sharply in price, and combined with export restrictions and lower demand from China and globally we expect a large drop in commodity export proceeds in 2020," says Anushka Shah, a Moody's Vice President and Senior Analyst.

"This in turn will widen the current account deficit and reduce reserves, with lower foreign reserves set against substantial repayment obligations on external debt that will start coming due in 2021, reflected in mounting vulnerabilities," adds Shah.

In response to the coronavirus outbreak, the government has announced a sizable fiscal stimulus plan. Moody's expects this will widen the budget deficit to 8.6% of GDP in 2020, from its projection of 4.8% at the start of 2020. A larger deficit will add to the government's gross borrowing requirements, estimated at 12.5% of GDP in 2020, and which will peak at 17.0% of GDP in 2022 as external bond repayments come due.

Financing will likely be drawn from a mixture of external sources, in particular multilateral and bilateral lenders, and domestic sources. If concessional sources do not all materialize and the local authorities maintain their planned stimulus measures, liquidity strains will increase.

Beyond 2020, Moody's expects growth to return toward Mongolia's high potential rates.

Robust growth potential continues to represent an underlying credit strength, although it is dependent on large projects proceeding as planned beyond 2020. This is Moody's base case assumption, particularly supported also by political continuity following recent parliamentary election results.

Subscribers can access the report "Government of Mongolia: External vulnerability, government liquidity risks turn more acute under coronavirus-driven pressures" at: http://www.moodys.com/researchdocumentcontentpage.aspx…

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This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Anushka Shah
VP-Senior Analyst
Sovereign Risk Group
Moody's Investors Service Singapore Pte. Ltd.
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Gene Fang
Associate Managing Director
Sovereign Risk Group
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Jurisdictions under Increased Monitoring – 30 June 2020 www.fatf-gafi.org

Jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the ‘grey list’.

The FATF and FATF-style regional bodies (FSRBs) continue to work with the jurisdictions noted below and to report on the progress made in addressing the identified strategic deficiencies. The FATF calls on these jurisdictions to complete their agreed action plans expeditiously and within the proposed timeframes. The FATF welcomes their commitment and will closely monitor their progress. The FATF does not call for the application of enhanced due diligence to be applied to these jurisdictions, but encourages its members to take into account the information presented below in their risk analysis.

The FATF continues to identify additional jurisdictions, on an on-going basis, that have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. A number of jurisdictions have not yet been reviewed by the FATF and FSRBs.

On 28 April, the FATF decided on a general pause in the review process for the list of jurisdictions under increased monitoring,

FATF extends its assessment and follow-up deadlines in response to COVID-19 (28 April 2020)
The FATF granted jurisdictions an additional four months for deadlines, with the exception of Mongolia and Iceland who requested to continue on their original schedule. As a result, the FATF reviewed and virtually met with only these jurisdictions and the result of these discussions is noted below.

Iceland

In October 2019, Iceland made a high-level political commitment to work with the FATF to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies. The FATF has made the initial determination that Iceland has substantially completed its action plan and warrants an on-site assessment to verify that the implementation of Iceland’s AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future. Specifically, Iceland has made the following key reforms: (1) ensuring the access to accurate basic and beneficial ownership information for legal persons by competent authorities in a timely manner; (2) introducing an automated system for STR filing and enhancing the FIU’s capacity in its strategic and operational analysis; (3) ensuring implementation of TFS requirements among FIs and DNFBPs through effective supervision; and (4) enabling effective oversight and monitoring of NPOs with adequate resources and in line with the identified TF risks. The FATF will continue to monitor the COVID-19 situation and conduct an on-site visit at the earliest possible date.

Mongolia

In October 2019, Mongolia made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies. The FATF has made the initial determination that Mongolia has substantially completed its action plan and warrants an on-site assessment to verify that the implementation of Mongolia’s AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future. Specifically, Mongolia has made the following key reforms: (1) improving sectoral ML/TF risk understanding by DNFBP supervisors, applying a risk-based approach to supervision and applying proportionate and dissuasive sanctions for breaches of AML/CFT obligations; (2) demonstrating increased investigations and prosecutions of different types of ML activity in line with identified risks; (3) demonstrating further seizure and confiscation of falsely/non-declared currency and applying effective, proportionate and dissuasive sanctions; (4) demonstrating cooperation and coordination between authorities to prevent sanctions evasion; and (5) monitoring compliance by FIs and DNFBPs with their PF-related TFS obligations, including the application of proportionate and dissuasive sanctions. The FATF will continue to monitor the COVID-19 situation and conduct an on-site visit at the earliest possible date.

The statement on Jurisdictions under Increased Monitoring, adopted in February 2020 remains in effect for the remaining jurisdictions identified at that time:

Albania
The Bahamas
Barbados
Botswana
Cambodia
Ghana
Jamaica
Mauritius
Myanmar
Nicaragua
Pakistan
Panama
Syria
Uganda
Yemen
Zimbabwe
Please refer to the statement issued in February 2020 for details concerning each of these jurisdictions. However, please be advised that the statement may not necessarily reflect the most recent status in the jurisdiction’s AML/CFT regime.