FATF status

Mongolia is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Mongolia was undertaken in 2023. According to that Evaluation, Mongolia was deemed Compliant for 9 and Largely Compliant for 31 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Corruption remains a significant issue in Mongolia, impacting investor confidence and leading to public protests and parliamentary hearings. Despite some legal actions against corrupt officials, many cases result in minor penalties, fostering skepticism about the government's commitment to genuine reform. The OECD has recommended comprehensive anti-corruption reforms, including enhancing enforcement and ensuring transparency, while acknowledging the efforts of the Independent Authority Against Corruption in addressing these challenges.

Mongolia's economy presents significant opportunities for investors, particularly due to its vast natural resource reserves and minimal market-access barriers. However, the country faces challenges such as vulnerability to external shocks, unpredictable regulatory environments, and a lack of stakeholder engagement in policymaking, which can deter foreign investment despite ongoing government efforts to improve the investment climate.

Mongolia's investment climate presents both opportunities and challenges for investors, characterized by its rich natural resource reserves and minimal market-access barriers. However, concerns about political sensitivity in sectors like mining and energy, along with unpredictable regulatory burdens and ineffective dispute resolution, make the environment risky for foreign investors. Recent government initiatives aimed at improving the investment climate have garnered support, but the lack of consistent implementation remains a significant deterrent.