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C O N F I D E N T I A L SECTION 01 OF 04 HONG KONG 001041 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EAP, EAP/CM 
NSC FOR DENNIS WILDER 
 
E.O. 12958: DECL: 06/10/2033 
TAGS: PGOV PREL ECON EINV SOCI CH HK MC
SUBJECT: OUR MACAU AGENDA: EXPANDING RAPIDLY 
 
REF: A. HONG KONG 00645 
     ¶B. HONG KONG 00894 
 
Classified By: Consul General James Cunningham; Reason 1.4 (d) 
 
¶1. (SBU) Summary: Over the past year, we have greatly 
expanded our commitment of time and resources to Macau.  In 
November 2006, we established a "Team Macau" as a platform 
for interagency coordination.  All of the 13 USG agencies 
represented at post participate in this effort, which was 
driven in part by rapidly expanding and broadening U.S. 
interests in Macau.  In 2007 we developed and expanded an 
agenda ranging from policy analysis and reporting, to 
logistics, to law enforcement and outreach, promotion of U.S. 
business and protection of the rapidly growing American 
community.  We have increased our understanding of and 
presence in Macau, but even greater engagement is called for, 
given growing U.S. interests there.  We are pursuing interim 
measures to expand our reach and coverage, but lack the 
resources to field the full time coverage Macau merits.  In a 
separate message, we address long term U.S. interests in 
Macau and the need for a full-time USG presence there.  End 
Summary. 
 
Team Macau 
---------- 
¶2. (SBU) Consulate General Hong Kong established "Team Macau" 
in November 2006 as a platform for interagency coordination, 
as well as to compensate for a lack of constant presence on 
the ground by leveraging multiple, limited contacts to get a 
multi-faceted and coherent understanding of events in Macau 
as we accelerated our engagement there.  Team Macau convenes 
twice each month: one meeting is dedicated to law enforcement 
(LE) efforts in Macau, the other to non-LE foreign policy 
initiatives, including public diplomacy and outreach, 
protection of American citizen and other consular issues, 
economic and political engagement, logistics and security, 
and associated support.  At the same time, Post created an 
experimental virtual mechanism in the form of a weblog to 
facilitate local and intra-Consulate coordination on 
operational and substantive matters. 
 
Management & Administration 
--------------------------- 
¶3. (SBU) The Consulate General lies 40 miles, or one hour via 
high-speed ferry, from Macau.  This physical separation 
presents a logistical challenge for expansion of our presence 
in Macau.  The Consul General has raised our concerns about 
providing adequate service for the growing number of U.S. 
citizens resident in (now about 2,000) or visiting Macau with 
senior PRC Ministry of Foreign Affairs officials and the 
Chief Executive in Macau (ref B), suggesting establishment of 
a U.S. consular agent in Macau.  While CE Ho was supportive, 
after consultations with Beijing, the Ministry of Foreign 
Affairs (MFA) responded that the concept of a "consular 
agency" was unfamiliar and would require further study (Ref 
B).  Simultaneously, we have initiated measures to improve 
transportation and communication for Consulate General staff 
traveling to Macau and also expanded our range of contacts in 
the MSAR for logistical and substantive matters. 
 
Policy Issues - Macau Agenda 
---------------------------- 
¶4. (C) Our policy engagements in Macau have grown in parallel 
to the influx of American citizens and investment.  Over the 
past two years, we have broadened and deepened our 
understanding of developments in Macau across an expanded 
agenda:  protection of Americans; political, economic and 
social reforms; trafficking in persons; money laundering and 
financial security; U.S. trade and investment; and, not 
least, the key figures in Macau who have or will have 
influence over U.S. interests.  Below is a summary of our 
successes and remaining challenges on each agenda item to 
date. 
 
Political & Economic Reporting 
------------------------------ 
¶5. (C) Team Macau has expanded dramatically our substantive 
exchanges with Macau contacts on a broad and growing range of 
issues, including political reform, relations with the PRC 
and other countries, press freedom, corruption, money 
laundering, development of the casino industry, trade, labor, 
science, environment and health.  As a result, the number of 
substantive reporting cables from Hong Kong regarding Macau 
increased from ten in 2006 to 26 in 2007 and 14 in the first 
four months of 2008.  (Note:  These numbers do not include 
cables resulting from demarches, visits, or 
Congressionally-mandated reports.  End Note.)  One result of 
 
HONG KONG 00001041  002 OF 004 
 
 
this increased level of engagement is that we now enjoy 
greatly expanded relations with key figures in the 
government, industry, media, and academia, as well as various 
local associations and activist groups. 
 
Trafficking in Persons 
---------------------- 
¶6. (SBU) The State Department's Office to Monitor and Combat 
Global Trafficking in Persons (TIP) has recognized Macau,s 
substantial progress toward a comprehensive and effective 
anti-human trafficking strategy by raising it to Tier 2 
status in the 2008 TIP Report released June 4; Macau had 
spent two consecutive years on the "Tier 2 Watch List."  That 
promotion reflected significant actions taken by the MSARG, 
including establishment of an interagency task force to 
combat trafficking in persons.  As a result, in 2008 Macau 
initiated its first international TIP prosecution, and also 
drafted and submitted to the legislature a comprehensive 
anti-TIP bill that addresses current deficiencies in 
prevention, protection and prosecution of trafficking crimes. 
 This development is a direct result of our consistent, 
intensive efforts to engage the highest levels of the 
government, including multiple TIP-related meetings between 
the Consul General and Macau Chief Executive, Edmund Ho.  We 
also worked extensively with Macau government social welfare 
and law enforcement officers, NGO's and individual activists. 
 
 
¶7. (SBU) Post officers, working with the Department, obtained 
a Women's Issues Fund grant for a local NGO in Macau -- the 
Good Shepherd Sisters Women's Shelter -- to host two anti-TIP 
awareness seminars, the first of which was conducted on June 
¶5.  The event served to raise awareness among various 
stakeholders in Macau and strengthen public-private 
partnerships to end human trafficking there.  Post will 
report separately on the seminar and plans for the second 
event, scheduled in October 2008. 
 
Money Laundering & Financial Security 
------------------------------------- 
¶8. (C) The Consulate General continues to expand engagement 
with the Macau government to combat all forms of 
transnational crime.  We cooperate with numerous Macau law 
enforcement entities to build their capacity and promote 
their greater participation in bilateral and multilateral 
operations, including against terrorism.  The six U.S. law 
enforcement agencies at the U.S. Consulate General in Hong 
Kong actively engage their Macau counterparts to achieve 
these goals. 
 
¶9. (SBU) Macau's explosive growth in tourists, many of whom 
carry large amounts of cash for gaming, provides an 
opportunity for criminals to smuggle currency, drugs or other 
illicit products.  All agencies at the U.S. Consulate General 
in Hong Kong are working to improve relations with Macau 
policymakers, law enforcement agencies, and casino security 
personnel through regular visits to discuss current trends in 
smuggling and money laundering and to better understand 
Macau's law enforcement challenges. 
 
¶10. (SBU) We had success in encouraging Macau authorities to 
make needed changes to its anti-money laundering (AML) 
regime.  Following U.S. Treasury,s designation of Macau,s 
Banco Delta Asia as a primary money laundering concern, the 
Macau government in 2006 passed a new AML law that we helped 
shape, which significantly improved Macau's ability to combat 
money laundering and financial crimes.  The Asia Pacific 
Group's (APG) mutual evaluation of Macau's AML practices in 
2007, while generally positive, highlighted several 
additional regulatory revisions that would bolster Macau's 
AML regime.  Following the evaluation, we took the initiative 
to create a matrix of improvements Macau should make, putting 
the MSARG on notice we would monitor its progress.  Through 
frequent meetings with regulators, law enforcement officials, 
and financial sector professionals in Macau, we have 
advocated policy and regulatory changes that would be 
consistent with the APG recommendations.  This would include 
strengthening Macau's ability to combat money laundering 
through improved customer due diligence requirements, regular 
information sharing, and implementation of cash courier 
declaration requirements. 
 
Law Enforcement 
--------------- 
¶11. (SBU) In that regard, several USG agencies at post have 
organized training programs for Macau law enforcement 
officials.  In 2006, IRS officials conducted a Financial 
Investigations Training Course in Macau.  In 2007, U.S. Drug 
 
HONG KONG 00001041  003 OF 004 
 
 
Enforcement Administration (DEA) officers conducted two 
seminars on Financial Investigations and Customs Intelligence 
and Investigations.  In December 2007, the INS participated 
in an AML/CTF workshop for Macau casinos sponsored by the 
Australian government and the International Monetary Fund. 
Throughout 2007, Macanese law enforcement officials 
participated in 16 International Law Enforcement Academy 
training sessions in Bangkok, covering subjects including 
computer crime investigations, intellectual property rights, 
anti-terrorism protocols, narcotics control, and crime 
analysis.  This activity has continued in 2008. 
 
¶12. (SBU) In response to a request from the Macau Judicial 
Police and Customs Authority for assistance with increasing 
numbers of West African-related drug seizures, the DEA plans 
to conduct a workshop on West African drug trafficking trends 
in 2008.  The U.S. Federal Bureau of Investigation (FBI) is 
identifying a suitable Macanese law enforcement candidate for 
the FBI National Training Academy, and the U.S. Internal 
Revenue Service has received funding from State/INL to 
conduct training on Financial Investigative Techniques for 
Corruption and Money Laundering, tentatively scheduled for 
early in FY-09. 
 
U.S. Business Expansion in Macau 
-------------------------------- 
¶13. (SBU) Macau's gross domestic product (GDP) grew by 17.0 
percent in 2006 and 27.8 percent in 2007.  Since 
liberalization of the gaming industry began in 2002, Macau 
has benefited from at least US$ 2.2 billion in investment 
(the majority of which came from the U.S.), drawing 
ever-increasing numbers of visitors and sharply boosting 
consumption demand.  Other growth areas over the past few 
years include finance, insurance, construction and real 
estate.  Manufacturing has lagged, however, with much of 
Macau's production moving to factories in mainland China. 
Macau's primary exports remain textiles, garments, toys, 
electronics, and footwear, and its main export market is the 
U.S.  Most of Macau,s imports come from mainland China and 
Hong Kong. 
 
¶14. (SBU) In 2006, the U.S. overtook the PRC as the second 
largest investor (after Hong Kong) in Macau, accounting for 
18.5 percent of foreign direct investment.  In conjunction 
with increased investment, U.S. exports to Macau have grown 
significantly in recent years.  The increasing U.S. business 
presence in Macau prompted, with our support, the formation 
of a separate American Chamber of Commerce in Macau in 2007. 
(The American Chamber Of Commerce in Hong Kong previously 
encompassed Macau.)  The Consulate General continues to 
support the new Chamber's social and business promotion 
programs, and to encourage it to promote a positive public 
image of American contributions to the Macau community.  The 
Consulate General meets regularly with the AmCham Macau Board 
of Governors to discuss issues of concern in Macau, and has 
begun a regular series of open briefings for AmCham Macau 
members. 
 
Social Network Analysis 
----------------------- 
¶15. (C) To support our broader engagement in Macau, over the 
past year we have greatly expanded our research and analysis 
of influential present and future leaders.  As part of that 
effort, we reviewed large amounts of information from various 
sources to produce current assessments and map the influence 
networks of leaders in Macau,s government and political, 
economic, and cultural circles.  We specifically focused on 
potential successors to current CE Edmund Ho, as well as 
other key figures. 
 
Security & American Citizen Services 
------------------------------------ 
¶16. (SBU) In addition to exploring establishment of a 
consular agency (see para 4 above), we are undertaking the 
first comprehensive effort to prepare for future emergencies 
involving American citizens in Macau.  In December 2007 and 
January 2008, Consular officers and LES, over several trips 
visited the two major hospitals, the international airport, 
ferry terminal, and the largest hotel complexes in Macau. 
They met with hospital managers, airport emergency planners 
and security and planning officials in the Macau government. 
The visits expanded our relationships with the Macau 
emergency personnel who will work with us to get information 
on, and assistance to, American citizens in the event of a 
future mass-casualty incident.  We have added this new 
comprehensive contact information into our Emergency Action 
Plan (EAP).  In addition to updating the EAP, we expanded our 
roster of Macau wardens and brokered support from the Macau 
 
HONG KONG 00001041  004 OF 004 
 
 
AmCham to post a link to the Consulate General's website for 
warden information on the AmCham web page. 
 
Public Affairs & Outreach 
------------------------- 
¶17. (SBU) Post's Public Affairs Section organized outreach 
programs throughout the year, especially targeting youth, 
government, academic, women, healthcare professionals and 
environmental audiences.  In particular, a series of speaking 
events conducted by Consulate General staff on "Studying in 
the U.S." reached more than 1,500 middle school to 
college-age students, including at some of Macau's most 
prominent universities (University of Macau, Macau 
Polytechnic, and Macau University of Science and Technology). 
 The American Corner, located at the University of Macau, was 
a key venue for outreach and programming to English-speaking 
audiences.  We have arranged visiting speakers, such as 
Professor David Lampton of Johns Hopkins University, to speak 
on topics of interest in Macau, and Consulate General 
officers also have discussed a wide range of topics at 
conferences or other venues. 
 
¶18. (SBU) Our public affairs section is working with the Hong 
Kong America Center and representatives from all four of 
Macau's colleges and universities to set up an NGO consortium 
of the four universities to promote U.S.-Macau academic 
exchange on the model of the Hong Kong America Center.  The 
proposed Association of Macau-U.S. Academic Exchange (AMUSAE) 
is currently in the process of a lengthy bureaucratic and 
political review by university, MSARG, and the PRC 
Commissioner's Office.  Should it be established, AMUSAE 
would be able to solicit funds for new academic grants and 
receive USG grants for administering Fulbright and other 
exchange programs in Macau. 
Cunningham