Back

Functions of the Financial Information Unit

Pursuant to the Law on Money Laundering and Financing of Terrorism, the functions of FIU is determined as below:

Article 18. Functions of the Financial Information Unit

18.1. The Financial Information Unit shall have the following functions, in addition to those provided in Article 10 and 11 of this law:

  • 18.1.1. To receive, collect, and analyse information reported from entities stipulated in Article 4.1 of this law and as well as information in database of relevant local and foreign institutions;
  • 18.1.2. To disseminate information to competent law enforcement authorities and anti-terrorism agencies according to regulation if sufficient grounds to suspect transaction found that transactions are related to money laundering, terrorism financing, and other criminal activities, and to compile database on reports of suspicious, cash and non-cash transactions submitted to competent authorities;
  • 18.1.3. To provide feedback on a timely basis about measures taken on suspicious, cash and non-cash transaction reports to entities described in Article 4.1 stipulated in Article 4.1 of this law and competent law enforcement authorities;
  • 18.1.4. Develop and provide methodology to monitor and detect suspicious transactions and examine information related to money laundering and terrorism financing and monitor its implementation by the entities specified in Article 4.1;
  • 18.1.5. To enhance public awareness to combat and prevent money laundering and terrorism financing;

18.2. The supervisors of the Financial Information Unit shall have the power to examine the compliance of the laws to combat money laundering and terrorism financing and to require rectification of any breaches of the Law by entities described in Article 4.1, or to make recommendations to the competent authorities for further action including the cancellation of special licenses.

18.3. Financial Information Unit shall monitor how entities described in Article 4.1 and their officers fulfil their obligations imposed by this law.

18.4. The Financial Information Unit shall submit annual report of its activities on a yearly basis to the Financial stability council.

18.5. The Financial Information Unit shall have right to require inquiry of state registration, property registration, social insurance registration, border crossing registration, investment registration, records of transactions between banks from competent authorities for the purposes of performing duties prescribed in this law.

And also:

Article 10. Monitoring of accounts

10.1. If there are grounds to suspect that an account of a customer of an entity specified in Article 4.1 of this law is used for money laundering and terrorism financing purposes the Financial Information Unit may monitor that account.

Article. 11. Asset freezing, suspension

11.1. If there are grounds to suspect that a transaction is used for the purposes of money laundering or terrorism financing the Head of the Financial Information Unit may suspend the transaction up to 3 working days and a court shall extend the period if required.

11.2. The decision specified in Article 11.1 of this law shall be delivered to the reporting entity in writing, or, if this not possible, by phone and the written decision shall be delivered within 24 hours.

11.3. During the suspension of a transaction initiated in accordance with Article 11.1 of this law, the Financial Information Unit shall undertake the following measures;

     11.3.1. Obtain necessary information from related local and foreign institutions;

     11.3.2. If the established facts are sufficient to suspect that the given transaction had the purpose of money laundering or terrorism financing, then it shall be reported to the competent authorities and the related documents shall be sent to those parties for investigation;

     11.3.3. If it is established that the given transaction did not have the purpose of money laundering or terrorism financing, then the suspension decision shall be annulled and the reporting entity shall be immediately informed.

Article 19. Monitoring and ensuring compliance of entities described in Article 4.1

19.1. The Bank of Mongolia shall supervise and regulate entities stipulated in provision 4.1.1 of this law and the Financial Regulatory Commission and the Financial Information Unit shall supervise and regulate entities stipulated in provisions 4.1.2 through 4.1.7 of this law to ensure compliance with their obligations imposed by this Law and relevant regulations.

19.2. The Bank of Mongolia, Financial Regulatory Commission, and Financial Information Unit shall take the following actions in relation to monitoring compliance with this law.

     19.2.1. To take the necessary measures to establish appropriate criteria applicable to this Law, to take part directly or indirectly in the directorship, management, or operation of entities stipulated Article 4.1 of this law;

     19.2.2. Supervise and regulate entities stipulated in Article 4.1 of this Law to ensure compliance with their obligations imposed by this Law;

     19.2.3. To issue instructions, regulations, guidelines, and recommendations for compliance of obligations imposed by this law on entities described in Article 4.1 of this Law;

     19.2.4. To cooperate with and exchange information with other competent authorities and provide assistance in investigations, prosecutions, or proceedings related to money laundering and terrorism financing;

     19.2.5. Financial Information Unit and competent authorities shall develop standards and criteria applicable to the reporting of suspicious transactions;

     19.2.6. Publicize and maintain statistics concerning measures adopted and sanctions imposed in enforcing this Law;

Article 20. Database

20.1. The Financial Information Unit shall have a unified database of information compiled in accordance with the provisions of this Law.

20. 2. The Head of the Financial Information Unit shall approve the regulation on storage and use of information in the database.

Article 21. Cooperation with similar foreign institutions

21.1. Financial Information Unit shall cooperate with foreign institutions and international organizations which conduct similar activities and have similar confidentiality requirements imposed by law.

21.2. Financial Information Unit may provide the required information at the request of the institutions provided for in Article 20.1 and in accordance with the respective laws.