Having failed to adequately comply with the recommendations of the Financial Action Task Force (FATF), concerning anti-money laundering and counter-terrorism financing measures, Mongolia has been added to the FATF’s grey list along with Iceland and Zimbabwe, according to a FATF statement released on Friday in Paris. It is risking all foreign transactions and investments to halt, leaving Mongolia’s economy in uncertainty say some analysts as reaction to the decision.The country succeeded in getting out of the grey list in 2014 after taking actions to combat terror funding and money laundering. Mongolia has worked to address weaknesses in its technical compliance with the FATF’s standards since 2017. Meanwhile, its economy is in recovery following a bailout from the International Monetary Fund in 2017. Fund disbursement from the IMF program has been delayed since the end of last year as the central bank reviews a process of re-capitalizing domestic commercial banks. Since the completion of its mutual evaluation report (MER) in 2017, Mongolia has made progress on a number of its MER recommended actions to improve technical compliance and effectiveness, including by enhancing its money laundering (ML) and terrorist financing (TF) risk understanding, and introducing a comprehensive institutional framework to give effect to proliferation financing (PF) targeted financial sanctions (TFS) obligations, and enhancing its TF TFS legal framework through legislative measures and guidance, said FATF public statement.When government officials were discussing Mongolia’s potential inclusion in greylisting, Parliament Speaker Zandanshatar Gombojav said, “An international conference with the Asia/Pacific Group (APG) on Money Laundering and Financial Action Task on Money Laundering took place on September 12 to 13 in Bangkok, Thailand. Mongolia represented its report on work against financing terrorism and money laundering. Unfortunately, four indicators have been evaluated as unsatisfactory, and they have officially alerted us to resubmit the report.”

Published Date:2019-10-21