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July 07 2016
In the first half of 2016 the government revamped its regulatory measures regarding the prevention of money laundering and the financing of terrorism. This regulatory trend originated from the mandate of Administrative Regulation 7/2006. Article 2 of the regulation calls for the instructions to implement the duties and systemisation of procedures for compliance in the respective sectors to be issued by the following supervisory authorities:
The Monetary Authority of Macau was among the first to comply with the regulation's call and it soon began issuing instructions and guidelines, with the others following suit. Precisely 10 years after the publication of the regulation, this regulatory trend took off once again and grew at a swift pace. The instructions came into force on the following dates:
The instructions put forth by the supervisory authorities concern their particular scope of application – for example, the Gaming Inspection and Coordination Bureau instructions aim at entities that operate games of chance, lotteries, mutual bets and promoters of games of chance in casinos, while the Macau Trade and Investment Promotion Institute instructions concern commercial and auxiliary offshore services institutions. Given that the normative content of the instructions is derived directly from Administrative Regulation 7/2006,(5) similarities are abundant.
The general duties of Administrative Regulation 7/2006 are as follows:
Each instruction sets out criteria which could indicate money laundering or financing of terrorism. In some instances, the instructions may include an enhanced client information identification procedure and other special preventive measures.
An offence against the duties set out in the instructions refers back to the penalty framework of Administrative Regulation 6/2007. Without prejudice to applicable criminal responsibilities, each offence constitutes an administrative infringement, punishable with a fine of between Pte10,000 and Pte500,000 (approximately $1,252 to $62,559) for natural persons, and between Pte100,000 and Pte5 million (approximately $12,520 to $625,583) for collective persons or entities.(12)
However, the maximum fine will be raised to double the economic benefit when an offence exceeds the sum of half of the maximum fine. This level of flexibility is conferred on the supervisory authorities in cases of abnormality and should be a significant disincentive to the offender.
With the entry into force of the instructions and the recently proposed legislation on freezing assets,(13) the government is sending a clear signal that Macau has renewed its commitment to the prevention of money laundering and the financing of terrorism in line with the Asia Pacific Group on Money Laundering, which will issue a report later in 2016.
For further information on this topic please contact Pedro Cortés or Calvin Tinlop Chui at Rato, Ling, Lei & Cortés Advogados by telephone (+853 2856 2322) or email (firstname.lastname@example.org or email@example.com). The Rato, Ling, Lei & Cortés Advogados website can be accessed at www.lektou.com.
(1) Letter Circular 01/DSO/IPIM/2015, Preventive Measures on Anti-money Laundering and Combating the Financing of Terrorism, available at www.gif.gov.mo/web1/doc/IPIM/AMLCFT%20revised%20guidelines%202015_final.pdf.
(2) Guidelines on Money Laundering and the Financing of Terrorism, available at www.gif.gov.mo/web1/doc/DSAJ/Instrucoes%20contra%20o%20Branqueamento%20de%20Capitais%20e%20o%20Financiamento%20do%20Terrorismo_20160118.pdf.
(3) Instruction 1/2016 – Instructions in respect of general procedures to be adopted with a view to prevent Money Laundering Crimes and Financing of Terrorism, available at www.gif.gov.mo/web1/doc/DICJ/2016-01_InstrucaoBranqTerror.pdf.
(4) Notice 1/2016, see www.gif.gov.mo/web1/doc/DSE/aviso2016-01p.pdf.
(5) Administrative Regulation 7/2006 – Preventive measures for the crimes of money laundering and financing of terrorism, available at www.gif.gov.mo/web1/doc/gif/rega-7-2006.pdf.
(13) For further details please see "Freezing assets".
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