Frequently Ask Questions
Financial Intelligence Units (FIUs) are central to combating financial crimes. Herein are the most frequently asked questions and responses thereto;
The Financial Intelligence Unit (FIU) is a statutory body established under section 14 the Money Laundering and Proceeds of Crime Act 2008 (as amended). (MLPCA)
Its mandate is to receive, analyse and disseminate financial intelligence relating to money laundering, terrorist financing, proliferation financing and associated predicate offences. The FIU also supervises compliance with AML/CFT/CPF obligations by designated accountable institutions and promotes national and international cooperation in combating financial crime.
Money laundering is the process of concealing or disguising the origin of proceeds derived from criminal activity to make them appear legitimate.
Terrorist financing involves collecting, providing or using funds or assets to support terrorists, terrorist organisations or terrorist activities, regardless of whether the funds originate from lawful or unlawful sources.
All accountable institutions designated under Schedule 1 of the MLPCA are required to submit STRs whenever reasonable suspicion arises.
Proliferation financing refers to providing funds or financial services that facilitate the development, acquisition or transfer of weapons of mass destruction and related materials in contravention of international obligations.
Effective AML/CFT/CPF measures protect the integrity of Lesotho’s financial system, strengthen public confidence, discourage organised crime and support economic development.
The FIU is responsible for:
- Receiving and analysing Suspicious Transaction Reports (STRs) and other prescribed reports.
- Disseminating financial intelligence to competent authorities.
- Supervising compliance with AML/CFT obligations.
- Issuing guidance, directives and typology reports.
- Conducting outreach and awareness programmes.
- Cooperating with domestic and international counterparts.
No. The FIU is not a law enforcement or prosecutorial agency. It analyses financial information and disseminates financial intelligence to law enforcement agencies for investigation or prosecution where appropriate. Financial Intelligence is disseminated to Lesotho Mounted Police Services (LMPS), RSL (Revenue Services Lesotho), Directorate on Corruption and Economic Offences (DCEO).
The FIU conducts financial intelligence analysis, not criminal investigations. Investigations are undertaken by competent law enforcement agencies.
No. The FIU does not recover private funds, settle commercial disputes or act as a debt recovery agency.
An STR is a report submitted to the FIU by an accountable institution where the latter suspects that funds, transactions or activities may be linked to money laundering, terrorist financing, proliferation financing or other criminal conduct.
An STR should be submitted immediately upon formulation of suspicion. Accountable Institutions should not wait until they obtain proof of criminal activity.
The FIU analyses the STR, may request additional information where necessary, and disseminates financial intelligence to competent authorities where appropriate
The FIU may provide general or strategic feedback and, where appropriate, institution-specific feedback. However, the FIU cannot disclose confidential operational information relating to ongoing analysis or investigations.
Where there are reasonable grounds for suspicion, an STR should be submitted. Institutions may also seek general guidance from the FIU.
Submission of an STR does not automatically prohibit a transaction from proceeding unless otherwise directed by law or by a law enforcement agency.
No. Informing a customer or another unauthorised person that an STR has been submitted or that an investigation may follow constitutes tipping-off and is prohibited by law.
Yes. The FIU treats all reports and reporting entities confidentially in accordance with the law and international standards.
Yes. Institutions and employees who submit reports in good faith are generally protected under the law from civil or criminal liability arising from the submission.
An accountable institution is a business or profession designated under the law to implement AML/CFT/CPF measures.
These include:
- Customer Due Diligence (CDD)
- Ongoing monitoring
- Record keeping
- Reporting suspicious transactions
- Developing and maintaining Risk assessments
- Staff training
- Internal controls and compliance programmes
- Appointment of a Money Laundering Reporting Officer (MLRO)
CDD involves identifying and verifying customers, identifying beneficial owners, understanding the purpose of business relationships and monitoring transactions.
EDD consists of additional verification and monitoring measures applied to higher-risk customers, products, services or transactions.
A beneficial owner is the natural person who ultimately owns or controls a customer or legal arrangement or on whose behalf a transaction is conducted.
It prevents criminals from hiding behind companies, trusts or other legal arrangements to conceal illicit proceeds.
The MLRO oversees the institution’s AML/CFT/CPF compliance programme, reviews internal reports of suspicious activity and serves as the principal liaison with the FIU.
Failure to comply with AML/CFT/CPF obligations may result in administrative sanctions, financial penalties, regulatory action or criminal prosecution.
Yes. The FIU is granted powers to perform inspections and other supervisory activities to assess compliance with AML/CFT/CPF obligations.
Yes. The FIU regularly conducts training, awareness campaigns, stakeholder engagement sessions and publishes guidance and typology reports.
Yes. Institutions may contact the FIU for clarification on AML/CFT/CPF obligations or reporting requirements
Yes. Members of the public may provide information relating to suspected financial crime. The FIU will assess the information in accordance with its legal mandate.
The FIU publishes public information, guidance, typology reports and awareness materials. However, confidential operational information cannot be disclosed.
Yes. The FIU exchanges financial intelligence with foreign Financial Intelligence Units and other competent authorities in accordance with applicable laws and international agreements.
Yes. The FIU participates in regional and international cooperation mechanisms to strengthen the fight against financial crime.
For enquiries relating to AML/CFT/CPF obligations, reporting requirements, training or outreach, contact the Financial Intelligence Unit using its official telephone numbers 22312529, email address, [email protected] or by visiting the website, www.fiu.org.ls.
Relevant legislation, directives, guidance notes, typology reports, reporting forms and other AML/CFT/CPF resources are available from the FIU website, www.fiu.org.ls.
An STR is a report submitted to the FIU by an accountable institution where the latter suspects that funds, transactions or activities may be linked to money laundering, terrorist financing, proliferation financing or other criminal conduct.
Effective AML/CFT/CPF measures protect the integrity of Lesotho’s financial system, strengthen public confidence, discourage organised crime and support economic development.