Financial Crime World

Institutions Must Apply Stricter AML/CFT Measures for High-Risk Customers

New Circular from Financial Services Authority (AFS)

Macao, December 12, 2022 - The Financial Services Authority (AFS) has issued a new circular requiring financial institutions to apply stricter anti-money laundering and combating the financing of terrorism (AML/CFT) measures for high-risk customers.

Assessing Country Risk

The circular mandates that institutions assess country risk by considering factors such as:

  • Jurisdictions identified by the Financial Action Task Force (FATF) or other similar international organizations as having strategic AML/CFT deficiencies
  • Countries subject to sanctions, embargos, or similar measures issued by the United Nations or similar bodies
  • Countries or geographic areas identified by credible sources as having significant levels of corruption or other criminal activity

Customer Risk Factors

Institutions are also required to consider customer risk factors such as:

  • Customers living in, originating from, or having connections with high-risk jurisdictions
  • Examples include countries or jurisdictions identified by the FATF or other similar international organizations as having strategic AML/CFT deficiencies, countries subject to sanctions, embargos, or similar measures issued by the United Nations or similar bodies, and countries or geographic areas identified by credible sources as having significant levels of corruption or other criminal activity

Clear Customer Acceptance Policies and Procedures

The circular requires institutions to develop clear customer acceptance policies and procedures to assess ML/TF risks and acceptability of customers. Institutions must determine proper procedures to prevent establishing business relationships or conducting transactions with entities designated as terrorists by the United Nations Security Council, the Macao SAR Government, or other organizations or entities under interregional and international legal instruments.

Policies, Controls, and Procedures

Institutions are required to have policies, controls, and procedures approved and reviewed by the board of directors or senior management to enable them to manage and mitigate the risks that have been identified. Institutions must also monitor the implementation of those policies and controls and enhance them if necessary.

“We believe that these new measures will help to strengthen our fight against money laundering and terrorist financing,” said a spokesperson for the AFS. “We expect all financial institutions in Macao to comply with these requirements and to maintain high standards of AML/CFT.”

About the AFS

The Financial Services Authority (AFS) is a regulatory body responsible for regulating and supervising financial institutions in Macao. The AFS is committed to maintaining high standards of financial stability, integrity, and transparency in the financial sector.