Lesotho’s Efforts to Combat Money Laundering and Terrorist Financing

The Government of Lesotho is taking decisive steps to strengthen its laws and institutions in the fight against money laundering (ML) and terrorist financing (TF). The recently introduced Money Laundering Prevention and Combating of Terrorism Financing Bill aims to improve the country’s capacity to detect, prevent, and prosecute ML and TF offenses.

Freezing of Terrorist Funds

The MLPC Bill provides for the freezing of property held on behalf of individuals or entities listed by the United Nations Security Council. However, experts suggest that the scope of this provision should be expanded to include the freezing of terrorist funds in accordance with UN Security Council Resolution 1373.

Investigative Authorities

Lesotho has several agencies responsible for law enforcement, including:

• Directorate on Corruption and Economic Offences (DCEO): a relatively new agency with limited experience in investigating complex financial crimes.
• Lesotho Mounted Police Service (LMPS): with a range of techniques to access records, including search warrants and covert investigation methods.

Confiscation and Forfeiture

Lesotho does not yet have laws allowing for criminal confiscation for ML and TF offenses. However, the MLPC Bill establishes a dedicated authority, the Anti-Money Laundering Authority (AMLA), responsible for preventing, investigating, and prosecuting ML and TF offenses.

Challenges and Recommendations

The assessment team noted that:

• The DCEO lacks the skills to investigate complex financial crimes and relies on private companies to outsource these tasks.
• To address this issue, it is recommended that the AMLA’s functions and powers be clearly defined in the MLPC Bill to ensure accountability and adequate attention.

Experts suggest that great care should be taken in framing the AMLA’s functions and powers to avoid any ambiguity or confusion regarding the primary investigating authority for ML and TF offenses. Additionally, it is recommended that the government prioritize building capacity and skills within the DCEO to enable it to effectively investigate complex financial crimes.

Conclusion

Lesotho is taking significant steps to strengthen its laws and institutions in the fight against money laundering and terrorist financing. However, there are challenges that need to be addressed, including the lack of skills and capacity within the investigative agencies. By addressing these challenges and implementing effective measures to prevent, investigate, and prosecute ML and TF offenses, Lesotho can significantly improve its ability to combat financial crimes and protect its economy and citizens.