Financial Crime World

Timor-Leste Enacts Tough Laws to Combat Money Laundering and Terrorism Financing

Strengthening Fight Against Financial Crimes

The government of Timor-Leste has introduced new laws aimed at strengthening its fight against money laundering and terrorism financing. The regulations impose strict rules on financial institutions and non-financial professions, ensuring the integrity of the financial system and preventing the misuse of funds for illegal activities.

Key Provisions

Reporting Requirements

  • All financial institutions and non-financial professions must inform the Financial Intelligence Unit (FIU) of any transactions worth USD 10,000.00 or more.
  • Real estate agencies and brokers are required to report suspicious operations when involved in purchase and sales or purchase for resale transactions on behalf of a client.

Transaction Prohibitions

  • Financial institutions are prohibited from undertaking transactions suspected to be related to money laundering or financing of terrorism.
  • In cases where it is not possible to prevent the transaction, financial institutions must report all relevant information regarding the payer and beneficiary to FIU.

Confidentiality and Disclosure

  • Financial institutions, their employees, and agents are prohibited from disclosing confidential information provided by customers or other persons.
  • Breaches of this provision can result in severe penalties, including fines and even imprisonment.

Administrative Sanctions

  • Non-compliance with the regulations may result in administrative sanctions, including:
    • Fines ranging from USD 5,000.00 to USD 500,000.00
    • Suspension or withdrawal of licenses

Purpose and Impact

The new laws aim to protect Timor-Leste’s economy and maintain its international reputation by preventing the misuse of funds for illegal activities. The introduction of these laws is seen as a major step forward in the country’s efforts to combat money laundering and terrorism financing, and is expected to have a significant impact on the financial sector.

Conclusion

The government of Timor-Leste has taken a decisive step in strengthening its fight against financial crimes. The new laws will help ensure the integrity of the financial system and prevent the misuse of funds for illegal activities, protecting the country’s economy and international reputation.