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Recommendations of FATF

According to the international standards, particularly to the 40 recommendations of FATF –an organization countering international financial crimes, the Financial Information Unit must be given possibilities of being free from external influence such as political, interests and to work independently. The recommendations are:

The FATF Recommendation 29

  • 29.1 Countries should establish an FIU with responsibility for acting as a national centre for receipt and analysis of suspicious transaction reports and other information relevant to money laundering, associated predicate offences and terrorist financing; and for the dissemination of the results of that analysis.
  • 29.2 The FIU should serve as the central agency for the receipt of disclosures filed by reporting entities, including:
    • (a) Suspicious transaction reports filed by reporting entities as required by Recommendation 20 and 23; and
    • (b) any other information as required by national legislation (such as cash transaction reports, wire transfers reports and other threshold-based declarations/disclosures).
  • 29.3 The FIU should:
    • (a) in addition to the information that entities report to the FIU, be able to obtain and use additional information from reporting entities, as needed to perform its analysis properly; and
    • (b) have access to the widest possible range61 of financial, administrative and law enforcement information that it requires to properly undertake its functions.
  • 29.4 The FIU should conduct:
    • (a) operational analysis, which uses available and obtainable information to identify specific targets, to follow the trail of particular activities or transactions, and to determine links between those targets and possible proceeds of crime, money laundering, predicate offences and terrorist financing; and
    • (b) strategic analysis, which uses available and obtainable information, including data that may be provided by other competent authorities, to identify money laundering and terrorist financing related trends and patterns.
  • 29.5 The FIU should be able to disseminate, spontaneously and upon request, information and the results of its analysis to relevant competent authorities, and should use dedicated, secure and protected channels for the dissemination.
  • 29.6 The FIU should protect information by:
    • (a) having rules in place governing the security and confidentiality of information, including procedures for handling, storage, dissemination, and protection of, and access to, information;
    • (b) ensuring that FIU staff members have the necessary security clearance levels and understanding of their responsibilities in handling and disseminating sensitive and confidential information; and
    • (c) ensuring that there is limited access to its facilities and information, including information technology systems.
  • 29.7 The FIU should be operationally independent and autonomous, by:
    • (a) having the authority and capacity to carry out its functions freely, including the autonomous decision to analyze, request and/or forward or disseminate specific information;
    • (b) being able to make arrangements or engage independently with other domestic competent authorities or foreign counterparts on the exchange of information;
    • (c) when it is located within the existing structure of another authority, having distinct core functions from those of the other authority; and
    • (d) being able to obtain and deploy the resources needed to carry out its functions, on an individual or routine basis, free from any undue political, government or industry influence or interference, which might compromise its operational independence.
  • 29.8 Where a country has created an FIU and is not an Egmont Group member, the FIU should apply for membership in the Egmont Group. The FIU should submit an unconditional application for membership to the Egmont Group and fully engage itself in the application process.

The definition of FIU made by Egmont Group is attached to this introduction and original copy is available on the website: http://www.egmontgroup.org/.

The FATF 40 recommendations are available on the website: http://www.fatf-gafi.org.

In 2004, Mongolia became a member of the APG (Asia/Pacific Group on Money Laundering) which is closely affiliated with the FATF and conducts its operation at the regional level. In addition, Mongolia regularly reports to the APG on own progresses and get assessment on operations by the APG. This organization assesses the member countries in compliance with FATF 40 recommendations. A part of this assessment is the operation of FIU and other criteria cover the structure, organize, autonomy and budget and plan.

Thus, our country should work diligently to ensure compliance with the above-mentioned international standards and develop a regime in order to build the internationally recognized money laundering and financing of terrorism regime. As foreign investors, financial institutions assess its risks of investment to any country; our country should develop the regime by giving significance to the assessment.