Financial Crime World

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TIMOR Adopts Best Practices for Combating Money Laundering and Terrorist Financing

The Timorese government has announced that it will implement a series of best practices to combat money laundering (ML) and terrorist financing (TF), following recommendations from international organizations.

Implementing Best Practices

According to a report, the country will:

  • Assess risk and apply a risk-based approach to ML/TF prevention
  • Foster national cooperation and coordination among various agencies
  • Confiscate assets related to ML/TF and implement targeted financial sanctions against individuals and entities involved in terrorist financing

The report highlights the importance of:

  • Customer due diligence for financial institutions operating in Timor
  • Record keeping and internal controls for financial institutions
  • Transparency and beneficial ownership of legal persons and arrangements
  • Regulation and supervision of financial institutions and designated non-financial businesses and professions (DNFBPs)

Strengthening Supervisory Powers and International Cooperation

The government has committed to:

  • Strengthen powers of supervisors, law enforcement agencies, and investigative authorities
  • Enhance international cooperation through mutual legal assistance, extradition, and other forms of collaboration

Expected Outcomes

The implementation of these best practices is expected to significantly improve Timor’s ability to combat ML/TF and protect its financial system. The country joins a growing number of nations that have adopted similar measures to prevent the misuse of their financial systems for illicit purposes.

Implemented Recommendations

Here are the 40 recommendations implemented by the government:

  1. Assessing risk and applying a risk-based approach
  2. National cooperation and coordination
  3. Money laundering offence
  4. Confiscation and provisional measures
  5. Terrorist financing offence
  6. Targeted financial sanctions related to terrorism and terrorist financing
  7. Targeted financial sanctions related to proliferation
  8. Non-profit organizations
  9. Financial institution secrecy laws
  10. Customer due diligence
  11. Record keeping
  12. Politically exposed persons
  13. Correspondent banking
  14. Money or value transfer services
  15. New technologies
  16. Wire transfers
  17. Reliance on third parties
  18. Internal controls and foreign branches and subsidiaries
  19. Higher-risk countries
  20. Reporting of suspicious transactions
  21. Tipping-off and confidentiality
  22. DNFBPs: Customer due diligence
  23. DNFBPs: Other measures
  24. Transparency and beneficial ownership of legal persons
  25. Transparency and beneficial ownership of legal arrangements
  26. Regulation and supervision of financial institutions
  27. Powers of supervisors
  28. Regulation and supervision of DNFBPs
  29. Financial intelligence units
  30. Responsibilities of law enforcement and investigative authorities
  31. Powers of law enforcement and investigative authorities
  32. Cash couriers
  33. Statistics
  34. Guidance and feedback
  35. Sanctions
  36. International instruments
  37. Mutual legal assistance
  38. Mutual legal assistance: freezing and confiscation
  39. Extradition
  40. Other forms of international cooperation