Former Bosnian Croat soldier Krunoslav Bonic has been wanted by Bosnian police for eight years over his part in the 1992-95 war.

The Hague's Yugoslavian war crimes tribunal has heard untested evidence that Bonic allegedly cut the ears off dead soldiers for money and helped round up, interrogate, and beat Muslim civilians.

Despite his wanted status, a Fairfax investigation has revealed Bonic, now 39, has lived openly within 30 minutes of the Australian Federal Police headquarters and the Attorney-General's Department since 2008 and between 1998 and 2001, at least intermittently.

However, the department says it received no request for extradition until March this year, and that Bosnia was not an eligible country for extradition until 2009.

The case has prompted renewed criticism, including from a senior Hague prosecutor, of the government's weak efforts to root out war criminals hiding from justice in Australia.

Bonic left Bosnia after the conflict, amid allegations that Serbian, Croat, and Bosnian forces had committed heinous crimes, including indiscriminate killing, mass rape, the use of civilians as human shields, and the ethnic cleansing of Bosniak Muslims.

But his move to Australia was far from secretive.

One of his alleged victims said as early as 1999 that Bonic was living here, during testimony at the International Criminal Tribunal for the former Yugoslavia.

The former Croatian Defence Council soldier has not tried to hide his identity in Canberra, and his name has been listed on the electoral roll as far back as 1998.

Extradition proceedings to force Bonic to front Bosnian courts, rather than The Hague, began quietly in the ACT Magistrates Court last week. Bonic, whose name did not appear on public court lists, was held in custody and made no application for bail.

Mark Aarons, an author with decades of experience investigating war crimes, said Australia's efforts in alleged war crimes cases was more than an embarrassment for federal authorities.

"It's worse than that: it shows the Australian government doesn't give a damn," he said. "It doesn't give a damn if we have become a safe haven for mass murderers and torturers."

Unlike other Western countries, Australia has no specialised unit to investigate war criminals and bring them to justice.

The government instead relies on the AFP, which also has no dedicated team for the notoriously complex, specialised and costly field of war crimes investigations.

The AFP, while not commenting on the Bonic case, said it treats allegations of war crimes, crimes against humanity and genocide extremely seriously.

It said it uses a "flexible teams approach" to investigating war criminals in Australia, combining a panel of experts it set up in 2012 with "any number of teams" across the AFP.

But former deputy chief prosecutor to The Hague Graham Blewitt said the lack of a dedicated war crimes unit was an indictment on Australia, whose efforts paled in comparison to countries like the United States and Canada.

"It's been a huge disappointment to me personally, because I've been involved in war crimes work since 1988 up until I left The Hague tribunal in 2004," Mr Blewitt said.

"There were times when there were promises of action, but nothing ever eventuates."

The Attorney-General's Department said it took war crimes allegations seriously and worked to ensure Australia was not a safe haven for suspects.

Evidence heard at The Hague alleged that Bonic, a Bosnian Croat fighting with the Croatian Defence Council was captured by enemy forces near Vitez in central Bosnia.

He was allegedly found with the ears of enemy soldiers in his bag. A Serbian witness said he asked Bonic about the ears, and Bonic said they were to be sold back to the council for 200 German marks each.

"I was told 200 for the ears. I don't know about other parts of the bodies," the witness said in 2004.

Another civilian witness, a Muslim veterinarian, told the tribunal that Bonic helped detain him in a room where he was beaten and interrogated about Bosnian troop movements.

"I was … extremely astonished because I saw on the walls splashes of blood, and inside there was a pile of beer cans, and I became apprehensive of my own fate," the man said in 1999.

"They fired a shot just above my head so that this warm air hit me, and I thought I had been shot."

Bonic is due to appear again before ACT courts briefly on Wednesday.