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Still some room for improvement: APG

Full report to be released end-August or early-September, MSAR has no cases of financing of terrorism and low rating in money laundering convictions due to difficulty in finding sufficient evidence of the crimes

In preparing to undergo the anti-money laundering and counter financing of terrorism audit by the Asia Pacific Group, the MSAR had to go through 17 government departments and ‘over 1,000 private entities,’ according to information provided yesterday by the Financial Intelligence Office (GIF).
The results of the Mutual Evaluation Report produced by the group after its audit, partly announced to the public earlier this month, note that the MSAR was ‘compliant’ or ‘largely compliant’ in 37 out of 40 recommendations made after the last audit, and in six of 11 other areas under review showed ‘substantial effectiveness’.
The director of the GIF, Ms. Ng Man Seong, noted that the full report will come out “at the end of August or beginning of September,” noting that the results “have already been approved but it still has to receive another evaluation” verifying that the methodology used in other regions under audit during the same round is consistent.
Regarding one case of non-compliance of the 40 items reviewed, the GIF head notes that “we will fix this soon, still this year,” noting that overall “Macau obtained very positive results”.
Regarding the next ‘progress review’, in five years, in response to Business Daily enquiries as to what the consequences are for non-compliance, the director assured that “we will work our hardest […] no one knows in five years what the criteria will be”.
In preparation for the audit, the group, starting in 2013 “did a risk framework and created questionnaires and sent them out to the six operators, the junkets, financial institutions, the real estate sector, pawn shops, automobile sales points, notaries, accountants,” and more, using the information – which included “data” – from the entities to help “identify which cases present more risk”.
This data was used to compile a report, after which “we supplied all the information to the evaluation team,” noted the director.

Some room for improvement
The MSAR received a ‘moderate efficiency’ rating in the ‘Understanding of risk and measures of mitigating risk,’ an area which evaluates “the threat of crime in the region, what are the methods and what are the points where they can happen”. The results, points out the director, state that “there is still a margin for reinforcement,” noting that the APG team itself went to speak with the casino operators and junket operators to “see if the junkets did the sufficient work to mitigate the risk” and didn’t only rely on government provided information.
Another area in which the MSAR received a less-than-perfect rating was in the ‘Investigation, accusation and judgement of the crime of money laundering as well as the recovery of the capital produced by these crimes’. Information from the GIF notes that ‘it’s extremely difficult to achieve the proof necessary that the detected funds in Macau originate from crimes taking place outside of the MSAR’, while the director noted that “the accusations are difficult to follow through with, there was no success, therefore it’s not very easy to accuse someone of the crime of money laundering”.
Regarding the financing of terrorism segment under review, the director noted that: “on this part, we don’t have any cases,” and as such received a high efficiency rating.
Of the eight countries or territories under review during this round of audits, the MSAR was the only one to pass on to a ‘performance review’, while the others will need to undergo a more rigorous evaluation during the next round.