Financial Crime World

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Macao’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Framework: Strengths and Weaknesses

General Observations

Macao’s AML/CFT framework has made progress in strengthening policy, raising awareness among agencies, and improving coordination measures. However, the report highlights both strengths and weaknesses in this area.

  • Progress made: Macao has made significant progress in strengthening its AML/CFT framework.
  • Weaknesses remain: Despite the progress, there are still areas that need improvement.

Risk Assessment and Understanding

Macao’s National Risk Assessment (NRA) is a useful model for assessing Terrorism Financing (TF) risks in jurisdictions with low terrorism risk. However, private sector understanding of Money Laundering (ML) risks needs to be improved, particularly in the junket promoters, real estate sector, and dealers of precious stones and metals.

  • Useful NRA: Macao’s NRA is a useful model for assessing TF risks.
  • Private sector understanding: Private sector understanding of ML risks needs to be improved.

Supervisory Authorities and Law Enforcement

Supervisory authorities have enhanced procedures and guidance, but limited focus on cross-border regional crime trends hinders GIF’s strategic intelligence. LEA investigations of ML generally do not match the risk profile, and a risk-based approach has yet to be translated into practice.

  • Enhanced procedures: Supervisory authorities have enhanced procedures and guidance.
  • Limited focus: Limited focus on cross-border regional crime trends hinders GIF’s strategic intelligence.
  • Risk-based approach: A risk-based approach has yet to be translated into practice.

Financial Intelligence and ML Investigations

The Asset Freezing Coordination Commission involves relevant agencies, but its effectiveness is still to be assessed. GIF uses multi-source information and sound analysis, resulting in a high number of financial intelligence disseminations opened for investigation. However, there are gaps in the ability of officers to interpret the intelligence value and use of GIF information in predicate investigations.

  • Asset Freezing Coordination Commission: The Asset Freezing Coordination Commission involves relevant agencies.
  • GIF uses multi-source information: GIF uses multi-source information and sound analysis.
  • Gaps in interpretation: There are gaps in the ability of officers to interpret the intelligence value.

Prosecutions and Confiscation

There have been some major successes with domestic corruption-related self-laundering cases, but only five ML convictions have been made. A shortage of prosecutorial resources, heavy evidentiary requirements for third-party ML, difficulty in obtaining evidence from foreign counterparts, and the lack of an adequate policy directive have hampered the quantity and quality of ML investigations and prosecutions.

  • Limited convictions: Only five ML convictions have been made.
  • Challenges in prosecution: A shortage of prosecutorial resources, heavy evidentiary requirements for third-party ML, difficulty in obtaining evidence from foreign counterparts, and the lack of an adequate policy directive have hampered the quantity and quality of ML investigations and prosecutions.

Overall, while Macao has made progress in strengthening its AML/CFT framework, there are still areas that need improvement, particularly in terms of risk assessment, supervisory authorities, and law enforcement.