In the anti-money laundering and combat financing of terrorism (AML/CFT) regime, it is crucial to receive reports of suspicious transactions that have grounds to suspect money laundering and terrorism financing (ML/TF) activities from reporting entities including financial institutions and non-financial institutions, and to centralize this information in a unified database. Accordingly, jurisdictions establish specialized organizations known as Financial Intelligence Units (FIUs) to receive, process, and analyze financial information related to ML/TF activities. Countries worldwide establish FIUs in various forms: administrative, law enforcement, and hybrid types. The FIUs are typically established within central organizations with relevant functions, such as the central organization responsible for finance and budget or legal affairs, as well as law enforcement agencies.
On July 6, 2006, the Law on Combating Money Laundering and Financing of Terrorism was approved in Mongolia. On November 29 of the same year, the Financial Information Unit of Mongolia (FIU-Mongolia) was established next to the Bank of Mongolia, developing the foundations of the prevention of ML/TF in Mongolia. The FIU carries out the main functions of receiving transactions from reporting entities under the Law on Combating Money Laundering and Financing of Terrorism, conducting analysis, and disseminating information that might have grounds to suspect ML/TF to competent law enforcement agencies. Moreover, FIU-Mongolia carries out other functions prescribed by the law, such as cooperating with foreign and domestic authorities, enhancing public awareness, supervising the implementation of laws and regulations in the field of combating and preventing money laundering, terrorism financing, and the financing of proliferation of weapons of mass destruction (ML/TF/PF). The FIU-Mongolia is operationally independent and autonomous, meaning that the FIU-Mongolia has the authority and capacity to carry out its functions freely.
The Financial Action Task Force (FATF) developed and issued 40 Recommendations that set out a comprehensive and consistent framework of measures that countries should implement to combat ML/TF/PF. Recommendation 29 of this standard defines the standards of operation of the FIUs, and the FIU-Mongolia conducts activities in line with these standards and requirements. As a result of continuing to ensure the implementation of these international standards and principles, FIU-Mongolia is the second one in the Central Asian countries and the fifteenth in the Asian countries to be recognized by the Egmont Group which is an international association of FIUs around the world.