Financial Crime World

Money Laundering Investigation Progress in Timor-Leste

Progress in Investigating Money-Laundering

Timor-Leste has made progress in investigating money-laundering cases. In 2018, the Financial Intelligence Unit (FIU) received 109 Suspicious Transaction Reports (STRs), of which about 20 were substantiated and reported to the General Prosecutor’s Office for further investigation.

Investigation Breakdown

  • 109 STRs reported to FIU in 2018
  • 20 STRs substantiated and reported to General Prosecutor’s Office
  • 6 cases officially opened and investigated by the PCIC

Challenges in Investigating Money-Laundering

Despite progress, challenges remain in investigating money-laundering cases. The country’s economy is heavily reliant on cash, making it difficult to conduct effective investigations using tracing methods.

Economic Challenges

  • Only about 45% of the adult population has access to financial services
  • Exposes vulnerability of country’s economy and financial system to illicit funds and counterfeit money

International Cooperation

  • Lack of international cooperation on mutual legal assistance in criminal matters
  • Hinders investigation process
  • General Prosecutor’s Office designated as central authority for managing outgoing and incoming requests for MLA, but no positive results due to foreign authorities’ reluctance to fulfill MLA requests from Timor-Leste

Human Resource Challenges

Limited human resources are available to fight against corruption and money-laundering. The Anti-Corruption Commission (ACC) has only 24 investigators, while there are only five specialized public prosecutors dedicated to handling corruption, money-laundering, and organized crime for the entire country.

Investigator Breakdown

  • 24 investigators in ACC
  • Only 5 specialized public prosecutors dedicated to corruption, money-laundering, and organized crime

Conclusion

The threat of money-laundering in Timor-Leste is significant, with corruption being the primary source of illicit income. There have been some progress in investigating money-laundering cases domestically, but foreign cases have seen limited success due to difficulties in obtaining cooperation from foreign authorities. Intensive dialogue between Timor-Leste authorities and their foreign counterparts is necessary to overcome barriers and achieve successful investigation, prosecution, and asset recovery.