Macau Scores High in Money Laundering Detection, But Room for Improvement Remains

The Financial Action Task Force (FATF) has released its Macao Mutual Evaluation 2017 report, which assesses the country’s implementation of anti-money laundering and combating the financing of terrorism (AML/CFT) measures. The report highlights that Macau is largely compliant with the FATF Recommendations, but there are areas requiring improvement.

Key Findings

• Risk-Based Approach: Macao has implemented a risk-based approach to assessing money laundering risks, which is a major strength.
• National Cooperation and Coordination: The country has in place effective national cooperation and coordination mechanisms.
• Laws and Regulations: Robust laws criminalizing money laundering and terrorist financing are in place.

Areas Requiring Improvement

• Financial Institution Secrecy Laws: Macau’s financial institution secrecy laws need to be revised to ensure they do not hinder AML/CFT efforts.
• Customer Due Diligence Practices: Customer due diligence practices require improvement, particularly when it comes to Politically Exposed Persons (PEPs).
• Record-Keeping Requirements: Macau needs to enhance its record-keeping requirements.
• Internal Controls: Stronger internal controls at financial institutions are necessary.
• Reporting of Suspicious Transactions: The country’s reporting of suspicious transactions is inadequate, and there are concerns about tipping-off and confidentiality.

Next Steps

The report highlights that Macau has made progress in recent years, but more needs to be done to ensure effective implementation of AML/CFT measures. The authorities have committed to addressing these deficiencies and improving their overall compliance with the FATF Recommendations.

Conclusion

While Macao’s score is high, it is clear that there is still much work to be done to strengthen its AML/CFT regime and prevent money laundering and terrorist financing.