Macau: New asset freezing regime

Author: | Published: 20 Apr 2016
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Riquito Coelho
Joao Nuno Riquito Carlos Eduardo Coelho

On March 21 2016, the Macau Special Administrative Region (Macau SAR) Legislative Assembly unanimously approved the first reading of a Bill that proposes the establishment of a counter-terrorist asset freezing regime, as part of the fight against terrorism and the widespread use of weapons of mass destruction.

The Asia-Pacific Group on Money Laundering and Offshore Group of Banking Supervisors Mutual Evaluation Report on Macau observed that the Macau SAR was only partially compliant with the recommendations of the Financial Action Task Force (FATF). In particular, Macau does not have freezing and unfreezing measures and procedures to fully implement United Nations Security Council (UNSC) resolutions regarding the prevention and suppression of terrorism and terrorist financing.

To be fully compliant with the FATF recommendations and to remedy some of the shortcomings of Macau's legislation, the draft Bill proposes the establishment of a legal regime for the execution of decisions to freeze assets contained in the UNSC Sanctions Resolutions applicable to Macau as a result of a decision of the People's Republic of China.

Pursuant to this Bill, Macau's Chief Executive is empowered to execute UNSC decisions to freeze assets. The Chief Executive can also designate persons or entities found committing financial terrorist acts and freeze their assets. In fact, whenever the Chief Executive has reasonable grounds to believe that any person or entity has committed, tried to commit and/or participated in any terrorist act (as defined under Law 3/2006 on the Prevention and Repression of Terrorism) it may freeze their assets.

This applies to:

  • any person or entity found in Macau;
  • all residents of Macau, wherever they might be found;
  • all assets found in Macau belonging to any person or entity subject to a freeze decision;
  • any assets transaction or operation made, by any means, directly or indirectly, totally or partially, in or through Macau.

All designation acts (including either acts from the international competent bodies or directly from the Chief Executive) subjecting a given person or entity to a freezing decision are published in the Macau Official Bulletin.

Following publication of the designation act, freezing of all property, and all assets under their direct or indirect control, as well as those resulting from or generated by the above, will be immediately carried out against the designated person or entity. Although this is the general regime applicable to all freezing measures, the possibility of extending the scope of the measures is also envisaged. This may happen in cases where the UNSC resolutions so require. In such situations, the freezing measures may be extended to any non-designated person or entity by virtue of any specific relation to the designated person or entity.

Finally, as an addition to the asset freezing measures, and to complement their efficacy, the prohibition on, directly or indirectly, making available or providing assets to any designated person or entity is also foreseen.

The new regulation is expected to be effective as of the second half of 2016.

João Nuno Riquito and Carlos Eduardo Coelho