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Timor’s Struggle to Combat Money Laundering: A Report on Progress and Challenges

Dili, Timor - The government of Timor has made significant strides in implementing anti-money laundering (AML) regulations, but challenges remain in ensuring full compliance with international standards. A recent report highlights the country’s progress in assessing risk, national cooperation, and other key areas, while also identifying gaps that need to be addressed.

Assessing Risk and Applying a Risk-Based Approach

Timor has implemented a risk-based approach to combating money laundering, which involves identifying high-risk transactions and individuals. However, some experts argue that the country’s risk assessment framework is still evolving and requires further refinement.

  • Identifying high-risk transactions and individuals
  • Implementing measures to mitigate risks

National Cooperation and Coordination

The government of Timor has established a National Committee on Money Laundering and Financing of Terrorism, which brings together various agencies and institutions to coordinate efforts in combating money laundering. While this coordination is welcomed, some stakeholders believe that more needs to be done to ensure effective information sharing and cooperation.

  • Establishing the National Committee
  • Improving information sharing and cooperation

Money Laundering Offence

Timor’s criminal code includes provisions related to money laundering, but some critics argue that the definition of a money laundering offence is still unclear and requires clarification.

  • Defining a money laundering offence
  • Clarifying legal frameworks

Confiscation and Provisional Measures

The country’s AML regulations provide for confiscation and provisional measures against individuals and entities suspected of money laundering. However, concerns remain about the effectiveness of these measures in practice.

  • Implementing confiscation and provisional measures
  • Improving enforcement

Terrorist Financing Offence

Timor has also criminalized terrorist financing, but some experts believe that more needs to be done to prevent the misuse of financial systems by terrorist organizations.

  • Criminalizing terrorist financing
  • Preventing the misuse of financial systems

Targeted Financial Sanctions

The country has implemented targeted financial sanctions related to terrorism and terrorist financing, but some critics argue that these sanctions are not always effectively enforced.

  • Implementing targeted financial sanctions
  • Improving enforcement

Non-Profit Organisations

Timor’s AML regulations exempt non-profit organizations from certain reporting requirements. However, some experts believe that this exemption may create opportunities for money laundering and requires closer scrutiny.

  • Exempting non-profit organizations
  • Closing loopholes for money laundering

These are just a few of the key areas highlighted in the report, which also covers topics such as customer due diligence, record keeping, and internal controls. While Timor has made progress in implementing AML regulations, there is still much work to be done to ensure full compliance with international standards and prevent money laundering and terrorist financing.