Financial Crime World

Report on Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Measures in Macao, China

Overall Assessment

The report provides a comprehensive assessment of Macao’s AML/CFT regime, highlighting both strengths and weaknesses. The overall risk profile of Macao is considered low to medium-low due to its limited exposure to terrorism and financial risks.

Key Findings

Private Sector Understanding

  • Limited understanding of ML risks: Private sector understanding of Money Laundering (ML) risks is generally sound but needs improvement, particularly among junket promoters, real estate sectors, and dealers of precious stones and metals.
  • Gaps in risk assessment: The private sector’s ability to assess ML risks effectively is limited, which can hinder their ability to prevent and detect ML activities.

AML/CFT Laws

  • New freezing law: Macao has a new freezing law that demonstrates strengths in its AML/CFT plan.
  • Proposed amendments: Proposed amendments to the AML/CFT laws aim to improve the effectiveness of Macao’s AML/CFT regime.

Supervisory Authorities

  • Enhanced procedures and guidance: Supervisors have enhanced procedures and guidance, but limited focus on cross-border regional crime trends hinders strategic intelligence.
  • Limited cross-border cooperation: Supervisors face challenges in obtaining information from other countries, which can hinder their ability to investigate ML activities.

Law Enforcement Agencies (LEA)

  • Investigations of ML: LEA investigations of ML do not match the risk profile, and a risk-based approach has yet to be translated into practice.
  • Limited resources: LEA face challenges in obtaining sufficient resources to effectively investigate ML activities.

Financial Intelligence Unit (FIU)

  • Effective operations: GIF operates effectively as an autonomous FIU but may struggle to meet its expanded roles without additional staff.
  • Staffing challenges: The FIU faces staffing challenges, which can hinder its ability to effectively monitor and analyze financial transactions for ML activities.

Prosecutions

  • Few convictions: There have been few ML convictions due to shortages of prosecutorial resources, heavy evidentiary requirements, and lack of policy directive.
  • Challenges in prosecution: LEA face challenges in obtaining sufficient evidence to secure prosecutions, which can hinder their ability to effectively combat ML activities.

Recommendations

The report suggests several recommendations for improvement:

Enhance Private Sector Understanding

  • Improve the understanding of ML risks among junket promoters and real estate sectors.
  • Develop training programs to enhance the private sector’s knowledge of ML risks and prevention measures.

Improve Cross-Border Cooperation

  • Enhance information exchange among LEA, supervisors, and GIF to improve cross-border cooperation.
  • Develop strategies to address regional crime trends and improve strategic intelligence.

Develop a Risk-Based Approach for LEA Investigations

  • Develop a risk-based approach for LEA investigations of ML activities.
  • Provide policy guidance for LEA on ML investigations and prosecutions.

Increase Resources for the FIU

  • Increase resources for the FIU to meet its expanded roles.
  • Provide additional staff to enhance the FIU’s ability to monitor and analyze financial transactions for ML activities.

Conclusion

The report highlights areas where Macao can improve its AML/CFT regime to better prevent and combat money laundering and terrorist financing risks.