Financial Crime World

Macao’s Financial System Exposed to Fraudulent Activities, Report Reveals

============================================================

A recent report has shed light on the vulnerabilities in Macao’s financial system to fraudulent activities. The report reflects the extent to which the country has implemented the technical requirements of the Financial Action Task Force (FATF) recommendations.

Key Findings and Concerns

Risk Assessment and National Cooperation

  • Macao faces issues with assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2) are also in need of improvement

Money Laundering Offence and Confiscation Measures

  • The country’s money laundering offence (R.3) is in need of improvement
  • Concerns over confiscation and provisional measures (R.4)

Terrorist Financing and Targeted Financial Sanctions

  • Terrorist financing offence (R.5) is a concern
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Targeted financial sanctions related to proliferation (R.7)

Financial Institution Secrecy Laws and Customer Due Diligence

  • Macao’s financial institution secrecy laws (R.9) are deemed to be a major issue
  • Customer due diligence (R.10) is also a concern
  • Record keeping (R.11), politically exposed persons (R.12), correspondent banking (R.13), and money or value transfer services (R.14) require improvement

New Technologies, Wire Transfers, and Reliance on Third Parties

  • Concerns over new technologies (R.15)
  • Wire transfers (R.16) are also a concern
  • Reliance on third parties (R.17) requires improvement
  • Internal controls and foreign branches and subsidiaries (R.18) need to be addressed

Reporting of Suspicious Transactions and Confidentiality

  • Macao’s reporting of suspicious transactions (R.20) is deemed to be a concern
  • Tipping-off and confidentiality (R.21) require improvement

DNFBPs, Transparency, and Beneficial Ownership

  • DNFBPs’ customer due diligence (R.22) and other measures (R.23) need improvement
  • Transparency and beneficial ownership of legal persons (R.24) are concerns

Financial Intelligence Unit and Law Enforcement Responsibilities

  • The financial intelligence unit (R.29) is a concern
  • Responsibilities of law enforcement and investigative authorities (R.30) require improvement
  • Powers of law enforcement and investigative authorities (R.31) need to be addressed

Conclusion

The report concludes that Macao’s financial system is vulnerable to fraudulent activities and recommends that the government takes immediate action to address these issues.

Ratings Used in the Report

  • C (compliant)
  • LC (largely compliant)
  • PC (partially compliant)
  • NC (non-compliant)