Keith Moor – East Timor is in danger of being infiltrated by crime gangs intent on using it as a stepping stone to Australia.
Australian Federal Police Commissioner Mick Keelty said his force was working with the East Timorese Government to lessen the risks.
He said the recent arrival of people smugglers and boat people in East Timor – plus last week's September 11 threats to Australian interests in East Timor – highlighted the need for constant vigilance in the region.
"And we will be vigilant so East Timor gets the chance to grow and prosper," Mr Keelty said. "The people-smuggling issue, and the more-recent security threat surrounding the anniversary of September 11, really establish grounds for quite legitimate concerns about organised crime issues in East Timor.
"That is one of the reasons why we have this month established a permanent AFP liaison office in East Timor."
The Australian embassy in Dili was last week closed after information was received that identified potential Australian and UN targets for terrorist activity during September 11 anniversary commemorations.
Foreign Affairs Minister Alexander Downer said he was very concerned about the threats in East Timor.
East Timorese Foreign Minister Jose Ramos-Horta told the Herald Sun he was aware his country was at risk of criminal exploitation. "There is this possibility because of the vulnerability of East Timor," he said.
Mr Ramos-Horta said he had discussed the issue with Australian authorities and had asked for help to counter the organised crime threat.
The Herald Sun this month visited East Timor and interviewed police, United Nations officials and politicians about crime trends in the region.
It travelled around East Timor with Mr Keelty, Victoria Police Assistant Commissioner Noel Perry, South Australia Police Commissioner Mal Hyde and Northern Territory Police Assistant Commissioner Doug Smith.
The Herald Sun yesterday revealed Australian police attached to the UN peacekeeping force expect to charge Indonesian-backed militia leaders with mass murder in East Timor.
In an interview with the Herald Sun in Dili, Nobel Peace Prize winner Jose Ramos-Horta revealed plans for East Timor to become a free trade zone and tax haven.
He conceded this would make his country even more of a target for organised crime groups. "There are no concrete details yet, but we are looking into creating special economic zones," Mr Ramos-Horta said. "We would offer a tax rebate to investors and free-trade facilities and so on."
He was aware organised crime gangs traditionally used such places to launder money. "We would work with international police to ensure the free-trade zone does not become a free-trade crime area," Mr Ramos-Horta said.
Mr Keelty and Mr Ramos-Horta confirmed AFP agents were working with the East Timorese Government to minimise the risk of transnational crime syndicates establishing themselves in the poverty-stricken country.
"Any developing country is at risk of exploitation by international organised crime groups," Mr Keelty said. "Such syndicates are about maximising their capacity for crime. They take advantage of a developing criminal justice system, of slower response from law enforcement. So places like East Timor, just as in Bosnia and Afghanistan, are being looked at by transnational crime groups eager to take advantage of the confusion there."
Mr Keelty said one tactic adopted by such crime groups was to establish legitimate businesses, such as restaurants, in emerging nations and later use those businesses as fronts for illegal activity.
"It is particularly attractive to do this while there is still United Nations money circulating in the local economy in East Timor," he said. "We are working with authorities in East Timor to help identify any of these questionable characters."
Mr Ramos-Horta said he had discussed getting help to establish better air and sea-surveillance capabilities to deter drug and people smugglers. He said the possibility of organised crime groups focusing on East Timor was obviously a concern.
"Because of this possibility we must take preventative measures by providing more support to our police force and maritime and air surveillance," Mr Ramos-Horta said. "We have very little, almost nothing, in terms of maritime surveillance. We have had some very exploratory talks with Australia. The two sides seem to agree there has to be some areas of cooperation on maritime surveillance between East Timor and Australia and also between East Timor and Indonesia."
A Sri Lankan fishing vessel with 56 illegal boat people on board recently made it into Dili harbour before being detected. Free-trade zones are an option being explored by East Timor as it develops.
But Mr Keelty warned there are pitfalls in them and said the AFP would be offering the East Timorese Government advice on avoiding those pitfalls.
"Our experiences, our intelligence, about free-trade zones in other parts of the world is that they can become money-laundering centres," he said. "Particularly money laundering tied up with tobacco."
"The sale of tobacco in free trade zones is recognised as a way of laundering money from drug production. So you come in with the cash and buy the tobacco and you then on-sell the tobacco and you have basically laundered your money. That's been our experience with the South American drug cartels, which are tied up with cocaine."
Mr Keelty said he fully understood why East Timor would want to establish a free-trade zone and become a tax haven. "It is a way of East Timor actually developing its own economy," he said.