Mar.09, 2010, 01:52:00

The Macau Government should ensure that regulations, structures, and training are adequate to prevent money laundering in the gaming industry, including an appropriate oversight of VIP rooms and junket operators, the Bureau of International Narcotics and Law Enforcement Affairs of the United States Department of State recommended in its 2010 report.

The second volume of this year’s International Narcotics Control Report released yesterday covers money laundering and financial crimes. Macau figures as one of the listed countries or jurisdictions of primary concern.

The report acknowledges that Macau has made considerable efforts to develop an anti-money laundering/counter-terrorist financing (AML/CFT) framework that meets international standards. However, “the Macau Government still needs to make further improvements. It should enhance its ability to implement and enforce existing laws and regulations”, it stressed.

As well as strengthening it’s efforts to combat money laundering in the gaming industry, the US bureau also suggested that Macau should continue raising AML/CFT public awareness and strengthen inter-agency coordination and training. One of the suggestions was to create a permanent body to dedicate exclusively to this task.

“It should institutionalize its financial intelligence unit by making it a permanent body, dedicate additional manpower resources to AML/CFT investigations, enforcement, and cross-border interdiction, and establish a cross-border bulk currency movement detection and declaration system.

The report said that additionally, Macau should enhance its ability to support international efforts pertaining to the freezing and seizing of illicit funds by developing its legal framework to facilitate the freezing and seizure of assets.

According to the report, in 2009, Macau’s FIU received 1,156 suspicious transaction reports. Of these, the unit submitted 20 referrals to law enforcement for additional action.

Also in 2009, Macau seized approximately USD 736,000 in money laundering-related assets, while in 2008, the money seized in laundering-related assets was approximately USD 8.7 million and approximately USD 15,300 in narcotics-related assets, all for crimes committed in 2007.

As of November 2009, Macau had not received evidence, which led it to identify, freeze, seize, and/or forfeit terrorist-related assets.

In August 2006, Macau’s former Chief Executive Edmund Ho established Macau’s FIU as a three-year, non-permanent government department under Macau’s Secretary for Economy and Finance. This method of establishment was employed to expedite the setup of the FIU given that the legislative process amounted to years of negotiation.

On July 2009, the FIU’s term was extended until August 2012. “The international community is of opinion that the unit is viewed by the Macau SAR Government as an essential component of the long-term infrastructure of the Government,” the report states.

The statement also pointed out that because of the large gaming sector patron flows from abroad, Macau could be used as a hub to launder and remit criminal proceeds. “To date, there is no evidence indicating Macau’s financial institutions engage in currency transactions involving international narcotics trafficking proceeds.

“Money laundering in Macau does not appear to be related to proceeds from illegal narcotics, psychotropic substances, and chemical precursors. The primary sources of criminal proceeds in Macau are financial fraud and illegal gambling. Criminal networks spanning across Macau’s border with mainland China account for much of the criminal activity,” it reported.