Financial Crime World

New AML Law in Timor-Leste: Boosting Financial Integrity and Combatting Money Laundering

In a commitment to enhance financial integrity and join the global movement against money laundering and terrorism financing, the Democratic Republic of Timor-Leste has passed a new law - Law No. 17/2011 on the Prevention and Combat of Money Laundering and Financing of Terrorism. This legislation aims to ensure constant surveillance by regulatory bodies, banks, financial centers, and other vulnerable institutions.

Rationale Behind the Legislation

  • Money laundering and financing of terrorism have grown into transnational threats, impacting economies and financial systems worldwide.
  • These illicit practices jeopardize Democratic Rule of Law within Timor-Leste.
  • They threaten the country’s reputation and undermine trust in financial institutions.

Details of the New Law

Defining Financial and Non-financial Entities

The law defines financial and non-financial entities, establishing obligations for:

  • Banks.
  • Insurance companies.
  • Other financial institutions.

Special Rules for Specific Entities

  • Insurance companies.
  • Agents.
  • Brokers.
  • Casinos.
  • Dealers in precious metals and stones.
  • Real estate agents and brokers.

Financial Transaction Transparency

  • Provisions for financial transaction transparency.
  • Customer identification requirements.

Internal Programs

  • Prevention and combat of money laundering and financing of terrorism.

Control Measures and Record Keeping

  • Specific control measures for certain transactions.
  • Rules for record keeping.

Financial Information Unit (FIU)

  • Establishment of the Financial Information Unit (FIU) within the Central Bank of Timor-Leste.
  • Power to request information from any entity or person.
  • Authorization to access and pursue information wherever necessary.
  • Disciplinary and criminal liability for breaches of confidentiality provisions.

Communication of Suspicious Transactions

  • Obligation to communicate suspicious transactions to competent supervisory authorities.
  • Prohibition of disclosures of confidential information by financial institutions to their clients or third parties.

Fines and Administrative Sanctions

  • Fines and administrative sanctions for violations of these regulations.
  • Sanctions may include warnings, orders for compliance, suspending or withdrawing licenses, and even imprisonment for individuals found to have intentionally or through gross negligence committed an offense.

In conclusion, the new Anti-Money Laundering (AML) law in Timor-Leste marks a significant step forward in the country’s commitment to combat money laundering and financing of terrorism. This legislation covers various financial and non-financial entities and aims to boost financial integrity, strengthen institutions, and protect the reputation of the country. It is expected that the implementation of this law will contribute to enhanced cooperation and coordination within the global effort against financial crimes.