What are money laundering and terrorist financing?
Money Laundering is the process adopted by criminals through which money obtained from criminal activities is concealed or disguised.
Financing of terrorism refers to the various forms of financial support to terrorists or organizations for achieving their aims. The source of funds can be legal or illegal.
Money laundering and terrorist financing are linked because funds used for terrorist financing are usually laundered to disguise or conceal the purpose.
What are the common methods of money laundering?
Cash is the most common medium of exchange in criminal activities. Criminals use different techniques to transform the large amount of cash received before it can be integrated into legitimate business activities. This will involve many transactions through both the financial and non-financial systems. In addition to the common money laundering methods via the financial system like bank deposits, account transfers, remittance or investments in various financial products, in recent years, the international trend of money laundering activities indicates that the following non-financial businesses and professions are being used to carry out money laundering activities, so as to conceal or disguise the source of fund:-
- Use of alternative remittance system such as the hawala used in South Asia, the Chinese fei ch’ien, the Thailand phoe kuan, or the "door to door" in the Philippines.
- Through commercial transactions involving large amount of cash, like purchase of real estates, motor vehicles, precious metal, precious stones, etc.;
- Through gaming activities which involve large volume of cash transactions; (e.g. exchange of chips without verifiable gaming activities)
- Use of trust and company service providers such as financial intermediaries, professionals like lawyers, accountants and tax advisers when they perform financial activities on behalf of their clients.
What are the Penalties for money laundering and terrorist financing?
According to Articles 3 and 4 of Law no. 2/2006 amended by Law no. 3/2017 (Prevention and suppression of the crime of money laundering) and Article 6 of Law no. 3/2006 amended by Law no. 3/2017 (Prevention and suppression of the crimes of terrorism), Money Laundering and Terrorist Financing Activities are considered as criminal offence, punishable with a maximum penalty of 12 years imprisonment.
What are the penalties for non-compliance of reporting obligation?
According to Administrative Regulation no. 7/2006 amended by Administrative Regulation no. 17/2017, non-compliance of Anti-Money Laundering and Counter Terrorist Financing Requirements by an entity subject to the preventive regime is considered as administrative offence, and is subject to a maximum fine of MOP500,000 for a natural person and MOP5 million for a legal person.
What can a citizen do to combat money laundering and terrorist financing?
An ordinary Macao citizen or even a visitor staying in Macao for a short period of time has the responsibility to cooperate with the entities subject to the preventive regime, since the fight against money laundering and terrorist financing is an international obligation. Without adequate and update information of the customers or trading parties, it will be extremely difficult for any monitoring system to work and detect suspicious transactions against the normal pattern of business activities.
Citizen or visitor can simply provide personal information, mainly identification document, occupation and address, etc. Please be reminded that should a customer refuse to provide the information as requested, under the present anti-money laundering legislation, the above entities have rights to decline or terminate the transaction.