Financial Crime World

Timor-Leste Takes Step Up in Anti-Money Laundering Compliance

Timor-Leste has taken significant strides to strengthen its anti-money laundering (AML) and counter-terrorist financing (CFT) measures, aiming to prevent the misuse of its financial system.

Progress Made

According to a recent report by the Asia/Pacific Group on Money Laundering (APG), Timor-Leste’s AML/CFT framework is still evolving but shows significant progress. The report highlights several key areas of improvement:

  • Dedicated AML/CFT Authority: Timor-Leste has established a dedicated authority to oversee AML/CFT measures, ensuring a more effective and efficient implementation of anti-money laundering regulations.
  • Stricter Customer Due Diligence Requirements: Financial institutions in Timor-Leste are now required to conduct stricter customer due diligence procedures, reducing the risk of money laundering and terrorist financing.

Increased Transparency

The report also commends Timor-Leste for its efforts to increase transparency in the financial sector:

  • Beneficial Ownership Information: The country has introduced beneficial ownership information requirements, making it easier to identify the true owners of companies and trusts.
  • Strengthened Reporting Obligations: Financial institutions in Timor-Leste are now required to provide more detailed reporting on suspicious transactions, enhancing the detection and prevention of money laundering and terrorist financing.

Continued Improvement Needed

While there are still areas where improvement is needed, the APG report acknowledges that Timor-Leste has made significant progress in addressing the risks associated with money laundering and terrorist financing. The country’s commitment to implementing effective AML/CFT measures is a positive step towards enhancing its international reputation and ensuring the integrity of its financial system.

FATF Recognition

The Financial Action Task Force (FATF) has also recognized Timor-Leste’s efforts, stating that it will continue to monitor the country’s progress in implementing its AML/CFT framework.