Macau Not Able to Investigate Money Laundering Properly

MacauLast week, one evaluation report pertaining to measures taken for counterterrorist finance and anti-money laundering issue was published in Macau. The findings of the report show that the concerned authorities have not properly investigated the matter and there are not enough numbers of money laundering convictions.

APG or The Financial Intelligence Office of Macau and Asia/Pacific Group on Money Laundering are two law enforcement agencies and supervising authorities respectively that have collectively completed the report. Money laundering risks in the region were evaluated and the report stresses the concern of cross-border crime which is a distressing issue in Macau.

Macau continues to remain the largest casino market across the globe. The city is also notorious for having the most number of organized crimes in the world. The APG report was published on December 1, 2017, and it mentioned that government of Macau have a deep knowledge and understanding of casino games and financial risks involved in it especially the local risks arising from the junkets. But the government is least concerned about paying any kind of attention on overseas transactions, corruption as well as cross-border money movement.

CNNMoney

One of the main reasons for the Macau government for lacking investigation related to money laundering is the absence of any kind of declaration system for money and goods transferred from the country. In the recent times, Macau has become one of the top destinations for money laundering. The trend is likely to grow in the coming times because the government is not strict and the concerned authorities are not able to address the problem.

APG made the following statement in its report:

The assessment team considers foreign proceeds arising from corruption, fraud and other crimes laundered through the gaming sector as Macau, China’s main ML (money laundering) risks… The lack of an adequate policy directive has hampered the quantity and quality of ML investigations and prosecutions, resulting in a low conviction rate.

In May last year, several regulations were made for money laundering issues pertaining to gaming industry by Gaming Inspection and Coordination Bureau. The new rules have made twice the number of provisions first written in the money laundering regulations in 2006. However, the threshold for reporting any kind of large transactions remained at MOP500,000 or US$62,200. The US State Department has repeatedly recommended bringing the large transactions to     US$3,000 which is the internationally recognized standard.

Apart from the low threshold, the APG report also pointed out the paucity of resources in Public Prosecution Office, strict requirements and evidence required for 3rd party money laundering charges as well as the absence of any kind of directive from regulators and officials causing any effect on the conviction rate. The report also suggested that punishment given to the offenders is very weak. The average imprisonment sentenced by the government is just 3-5 years for any kind of money laundering crime.

Last year, only 1,546 transactions out of 2,321 suspicious reports pertaining to financial dealings in gaming sector were reported in Macau which is just a mere 24% hike from 2015.

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