VZCZCXYZ0002
PP RUEHWEB

DE RUEHHK #0944/01 1420851
ZNR UUUUU ZZH
P 220851Z MAY 09
FM AMCONSUL HONG KONG
TO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 7679
INFO RUEHBJ/AMEMBASSY BEIJING PRIORITY 3192

UNCLAS HONG KONG 000944 
 
SIPDIS 
 
STATE FOR EAP/CM, EEB/IFD AND EEB/ESC, 
TRESURY FOR OASIA, 
BEIJING FOR TREAS ATTACHE 
 
E.O. 12958: N/A 
TAGS: EFIN ECON SOCI KCRM QA MC
SUBJECT: MONEY LAUNDERING: MACAU'S YOUNG FIU GAIS 
MILESTONE EGMONT GROUP MEMBERSHIP 
 
¶1. (SBU) Smmary: Macau's Financial Intelligence Unit (GIF 
for its Portuguese name) ill gain memberhip to the Egmont 
Group of Financal Intelligence Units at the Group's May 
24-28 Penary in Doha, GIF Director Deborah Ng told us May 
¶14.  Egmont Group membership gives GIF a formal latform to 
exchange information, training, and expertise with other 
developed FIUs (e.g., FinCEN, the U.S. Financial Crime 
Enforcement Network).  GIF chairs Macau's Anti-Money 
Laundering (AML) Working Group, which is addressing 
recommendations resulting from a 2006 mutual evaluation of 
Macau's AML programs by the Asia Pacific Group on Money 
Laundering (APG) and the Offshore Group of Banking 
Supervisors (OGBS).  We continue to encourage and provide 
substantive assistance to the GIF in addressing the APG 
recommendations issued in July 2007.  We note good progress 
in four key areas (Egmont Group membership, GIF permanence, 
increased investigative capacity, and maintenance of 
financial crimes/prosecution statistics), while the Macau 
Special Administrative Region Government (MSARG) still lags 
in two of the recommended areas (cross-border currency 
reporting requirements and customer due diligence).  The 
MSARG must respond to the APG/OGBS mutual evaluation report 
by July 2009 (two-year mark).  End Summary. 
 
-------------------------------------------- 
Egmont Group Membership to Boost Cooperation 
-------------------------------------------- 
 
¶2. (SBU) The Egmont Group will extend membership status to 
Macau,s Financial Intelligence Unit (GIF) at its upcoming 
May 24-28 Plenary and Working Groups meetings in Doha, Qatar, 
GIF Director Deborah Ng told us May 14.  The Egmont Group, 
established in 1995, provides its operationally-defined FIU 
members a platform for cooperation in information exchange, 
training opportunities, and expertise sharing.  Macau's 
joining the group publicly demonstrates its capability and 
willingness to share information with other FIUs, such as the 
U.S. Financial Crime Enforcement Network (FinCEN).  GIF 
recently signed Memorandums of Understanding (MOUs) to 
mutually share information with FIUs from Portugal, Korea, 
mainland China, and Hong Kong, jurisdictions that comprise 
Macau's major sources of fund inflows.  Ng told us GIF is 
also considering MOUs with Indonesia, the Philippines, and 
Japan. 
 
--------------------------------------------- ------------- 
Investigative Capacity: Training/International Cooperation 
--------------------------------------------- ------------- 
 
¶3. (SBU) GIF members continue to build investigative capacity 
through training and participation in AML international 
mutual evaluation teams.  The Department of State's Bureau of 
International Narcotics and Law Enforcement (INL) funded a 
financial investigations training course for the MSARG from 
May 18-22, 2009.  This course, arranged by the U.S. Consulate 
General Hong Kong and instructed by personnel from the 
Criminal Investigation Division of the U.S. Internal Revenue 
Service (IRS-CID), attracted members of Macau's GIF, 
Judiciary Police, Public Prosecutions Office, and the Macau 
Monetary Authority.  GIF Director Ng is also building her own 
professional competence while reviewing Korea's AML programs 
during a joint APG/Financial Action Task Force on Money 
Laundering (FATF) mutual evaluation.  She is collaborating 
with AML experts from Hong Kong, Japan, Spain, the United 
States, and representatives from the APG and FATF 
Secretariats. 
 
--------------------------------------------- ----- 
GIF Entrenching While Expanding; Tracking Progress 
--------------------------------------------- ----- 
 
¶4. (SBU) The MSARG established the GIF in 2006, following the 
U.S. Treasury Department's proposed designation of Macau's 
Banco Delta Asia (BDA) as an institution of primary money 
laundering concern.  In order to rapidly field an FIU, the 
MSARG established the GIF as a "temporary" project/entity. 
Director Ng told us that Macau's Legislative Assembly would 
consider proposals for a permanent GIF after the new Chief 
Executive takes office later this year.  Meanwhile, GIF 
continues to expand operations and staffing, with additional 
recently acquired office space, and increased staffing from 
five to thirty full-time employees, ten of whom are technical 
financial analysts.  GIF is also considering procurement of a 
web-based system to automate Suspicious Transaction Reports' 
(STRs) collection (current paper-based collection system 
requires labor-intensive manual data input by GIF staff). 
GIF continues to raise AML awareness within the financial, 
 
gaming, and other cash-collecting sectors (e.g., precious 
metals dealers, money exchangers, etc.) and has instituted 
operational procedures to track the status of investigative 
and prosecutorial leads it forwards to relevant authorities. 
GIF now maintains statistical records and in 2008, it 
received 838 STRs, 104 of which were submitted to Macau's 
Public Prosecutions Office. 
 
--------------------------------------------- --- 
Cross-Border Currency Movement Remains a Concern 
--------------------------------------------- --- 
 
¶5. (SBU) GIF Director Ng told us Macau's GIF-chaired AML 
Working Group is discussing the strength of cross-border 
currency movement regulations.  She stated that GIF submitted 
to Macau's Secretary for Economy and Finance a proposal to 
address this weakness.  Ng cited, however, that the MSARG 
would first have to evaluate any proposed measure on its 
local economic impact, given that Macau's revenue generating 
sectors (i.e., casinos, tourism) rely heavily on overseas 
visitors' spending.  In spite of this, Ng did acknowledge 
that Macau needs stronger regulations in this area. 
 
--------------------------------------------- -- 
No Change in Recommended Customer Due Diligence 
--------------------------------------------- -- 
 
¶6. (SBU) Macau's APG/OGBS mutual evaluation report recommends 
that non-financial businesses and professions (e.g., casinos) 
obtain customer identification (ID) for cash transactions 
larger than $3,000 U.S. dollars.  Current Macau regulations 
require casinos to obtain customer ID only for transactions 
above $62,500 U.S. dollars (500,000 Macau Patacas, MOP). 
Macau officials have told us in the past that these 
recommendations are too "onerous," and they are reluctant to 
lower the current level since virtually all casino players 
would qualify. 
 
DONOVAN