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Risk-Based Approach to AML/CFT in Macao

Macao has been rated as “largely compliant” with the technical requirements of the Financial Action Task Force (FATF) Recommendations, according to a recent mutual evaluation. The assessment reflected the extent to which Macao has implemented measures to prevent and combat money laundering and terrorist financing.

Strengths in Macao’s Approach

• Risk-based approach to assessing and mitigating anti-money laundering (AML)/combating the financing of terrorism (CFT) risks
• Financial institutions required to conduct customer due diligence and ongoing monitoring of customers
• Implementation of internal controls and reporting mechanisms for suspicious transactions
• Targeted financial sanctions related to terrorism and terrorist financing implemented
• Regulation and supervision of financial institutions strengthened
• Establishment of a financial intelligence unit to analyze and disseminate financial information to law enforcement authorities

Areas for Improvement

• Strengthen laws and regulations related to confidentiality and secrecy
• Increase transparency and beneficial ownership of legal persons and arrangements
• Enhance international cooperation and mutual legal assistance
• Improve statistics on AML/CFT
• Provide guidance and feedback to financial institutions on their compliance with AML/CFT requirements
• Further develop powers of supervisors and law enforcement authorities

Conclusion

The mutual evaluation concluded that Macao has made significant progress in implementing a risk-based approach to AML/CFT, but there are still some areas where improvement is needed. The country’s authorities have been urged to continue strengthening its AML/CFT regime to ensure that it remains effective and efficient in preventing and combating money laundering and terrorist financing.