Macau’s efforts to reduce potential money-laundering activity in the Chinese SAR are apparently working. The city’s gaming regulator received applause this week from the Asia/Pacific Group on Money Laundering for cleaning up Macau’s casino industry.
Money laundering has long been an issue in the casino industry, a concern the scandals involving Crown Resorts and Star Entertainment in Australia highlight. However, some areas have been more prone to potential issues than others and all regions face a constant battle to curb the activity.
Macau has had to deal with money laundering, as well. It also has had to respond to pressure from the Chinese government, which has a very limited tolerance for gambling. However, the Asia/Pacific Group on Money Laundering (APPG) feels that Macau is doing a good job at combatting any potential issues.
Macau Reducing Potential for Money Laundering
The APPG lauded Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau (DICJ, for its Portuguese acronym) this week. It comes as the group points out that the DICJ has been making substantial improvements in enforcing anti-money-laundering and combating the financing of terrorism (AML/CFT) protocols.
The praise was part of a follow-up report by APPG on Macau’s AML activity. The improvements, however, don’t necessarily mean that Macau can’t do more.
It was only an indication, according to GGRAsia, that the DICJ is more proactive. However, the regulator retained the same rating in terms of technical compliance with AML/CFT efforts that it had in 2019.
The DICJ, since that last report, established a new division with specific “AML/CFT supervision and compliance power,” according to Macau’s Financial Intelligence Office (GIF, for its Portuguese acronym). This new division, in part, facilitated the APPG’s response.
A swearing-in ceremony by the DICJ last September introduced 14 new managers to the group. These new divisional or departmental chiefs are responsible for legal matters, licensing, auditing and compliance. They also oversee the regulation of the city’s gaming concessionaires and junkets, as well as any investigations that may be necessary.
Macau Continues to Tweak AML Policies
The DICJ and the GIF have been working diligently to crack down on AML/CFT issues in Macau. The GIF told GGRAsia that the two have been in constant contact with gaming operators. The goal is to “refine” how they report suspicious activity. The object is to “capture more precisely, suspicious transactions.”
There were a total of 1,330 questionable activity reports filed last year, an increase of 9.5% over the previous year. A number of these reportedly involved junkets; however, the GIF didn’t specify how many.
It isn’t surprising that the figure dropped in 2020. Macau was dealing with COVID-19 and a virtual shutdown of its gambling activity. In 2019, however, the figure was 1,913, which means 2021 was a much better year.
Through continuous outreach and meetings, the quality of the suspicious transaction reports reported by the gaming sector has shown steady improvement over the past decade,” Macau’s Financial Intelligence Office told GGRAsia.
The number of reports dropped, but the type of activity remained the same. The three most common triggers were irregular cash withdrawals, deposits with non-verifiable sources of funds and chip conversion after no or minimal gambling.
The GIF recognized that more needs to be done going forward. For example, due diligence to protocols and reporting guidelines must pick up. In addition, there needs to be better monitoring of ongoing transactions.
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