Macao’s Crime Fighting Efforts Fall Short as Regional Threat Looms Large

Introduction

Despite efforts to strengthen anti-money laundering (AML) and counter-terrorism financing (CFT) measures, authorities in Macao have been criticized for their uneven understanding of major risks related to regional organized crime, cross-border movements, and corruption.

Key Findings

• The authorities have a sounder understanding of terrorist financing (TF) risk, but lack focus on more pressing threats.
• Private sector understanding of money laundering (ML) risks is generally sound, but needs improvement in certain sectors such as junket promoters, real estate, and precious stones and metals dealers.

Regulatory Framework

The report highlighted several shortcomings in Macao’s regulatory framework:

• Failure to adopt a risk-based approach to ML investigations
• Lack of direction for law enforcement agencies (LEAs) resulting in investigations that do not match the risk profile
• Restrictions on using police intelligence hindering GIF’s central policy role and strategic intelligence

Law Enforcement

The report also criticized LEA investigations, stating:

• Investigations generally do not match the risk profile
• Lack of translation of the risk-based approach into practice
• Limited progress in implementing a new parallel financial investigations mechanism in the Judiciary Police

Coordination and Information Sharing

Effective coordination measures have been implemented to strengthen policy and raise AML/CFT awareness among agencies. However, there are still operational shortcomings that undermine efforts made in other areas:

• Gaps in understanding major foreign ML risks due to limited focus on cross-border regional crime trends
• Limited ability of officers to interpret the intelligence value and use of GIF information in predicate investigations

Prosecution and Convictions

Despite some major successes in domestic corruption-related self-laundering cases, there have only been five ML convictions:

• Shortage of prosecutorial resources
• Heavy evidentiary requirements for third-party ML
• Difficulty in obtaining evidence on predicate offenses from foreign counterparts
• Lack of an adequate policy directive

Recommendations

The report concluded that the authorities should take a more proactive approach to addressing regional organized crime, cross-border movements, and corruption, and improve their understanding of major ML risks to effectively combat these threats.

Conclusion

Macao’s crime fighting efforts have been criticized for falling short in addressing regional threats. The report highlights several areas where improvement is needed, including regulatory framework, law enforcement, coordination, and information sharing.