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 due to its vast natural resource reserves, particularly in sectors like mining, energy, cashmere apparel, and agriculture. However, the country faces challenges such as vulnerability to external economic shocks, unpredictable regulatory burdens, and a lack of effective dispute resolution mechanisms, which may deter potential investors. Despite recent legislative efforts to improve the investment climate, concerns about government favoritism towards state-owned enterprises and the overall stability of the business environment remain prevalent.

Mongolia's investment climate presents both opportunities and challenges for investors, characterized by its rich natural resources and minimal market-access barriers. However, concerns regarding political sensitivity in sectors like mining and energy, along with unpredictable regulatory burdens and a lack of effective dispute resolution, create a cautious environment for foreign investment. Recent government initiatives to improve the investment climate have been met with skepticism due to inconsistent implementation of laws and regulations.