TDB Trade Finance Forum: Ambassador’s Remarks

Remarks of Ambassador Richard L. Buangan

at the TDB Trade Finance Forum

Tuesday, January 30, 2024

Shangri-La Hotel, Ulaanbaatar

Good afternoon and thank you for the invitation to speak to you all today.

I appreciate TDB [Trade and Development Bank] for bringing us all together to talk about trade finance and other relevant issues that impact Mongolia’s ability to be a full and active participant in international trade and financial networks.

When we talk about the importance of Mongolia’s Third Neighbor policy, we are also talking about the importance of growing and maintaining Mongolia’s linkages to the outside world, including financial. Mongolia’s Third Neighbor policy is about addressing the geographic challenges of being a landlocked country, and the trade and commercial constraints that come with it, regardless of who Mongolia’s neighbors are.

It is in the interest of the United States to ensure that this democratic country, like all democratic countries, has access to the regional and global trade networks that bring development, investment, and economic growth. In order to have access to these networks, we continue to underscore to our Mongolian government counterparts the need to follow international norms, laws, and covenants to which Mongolia has agreed. We all have a responsibility towards following the international rules-based system, which has brought peace and prosperity to the Indo-Pacific region over the last 70 years.

I would like to give you an example of why this is important. Getting off the FATF Grey List was such a moment for Mongolia. The Bank of Mongolia, the commercial banks, and many others here with us today joined the United States and like-minded nations to implement reforms to anti-money laundering and terrorism finance laws and regulations.

While a few attempted to criminally enrich themselves at the expense of the public good, responsible participants in the financial system recognized the threat this posed to Mongolia’s international reputation. They foresaw that Mongolia would be excluded from the rest of the world’s legitimate transactions. So, these responsible participants worked with us to clean up their system. That partnership – motivated by the concern to prevent Mongolia’s isolation – got Mongolia off the Grey List.

This is an outstanding achievement, but we must realize that threats to the integrity of the rules-based system are always lurking.

The United States and the international community responded to Russia’s illegal war in Ukraine with a strict sanctions regime on Russia. Many countries that deal with Russia for legitimate reasons have had to rearrange their financial transactions with Russian entities in order to maintain full compliance with international law. We recognize the enormous challenge and responsibility this poses on Mongolia’s decision makers. As the same time, we also recognize that Mongolia’s banks, exporters, and government are honoring the sanctions regime, fully cognizant of the consequences of turning away potential trade and energy benefits with their neighbor to the north.

But here is the reason it is important to stay the course:  because preserving Mongolia’s hard-earned efforts to open up and expand global financial linkages can only continue if Mongolia maintains its commitment to international law. So, I stand here today, as you all discuss the importance of trade finance, to urge you all – businesses, government, and diplomats – to prioritize protecting Mongolia’s international reputation, and to commit to expanding Mongolia’s access to global and regional trade networks.

TDB Bank’s newly forged correspondent banking relationship with the Bank of New York Mellon is an example of these bright new opportunities to link Mongolia to global financial networks, and we want to see more of these correspondent banking relationships in the future.

If Mongolia continues to support stability, transparency, and the rules-based international order in its financial sector, it will find willing and ready partners, including the United States, by its side.

The United States stands ready to support efforts to facilitate Mongolia’s trade, commercial, and financial ties with the entire Asia-Pacific region and the rest of the world.

Thank you and Happy New Year.