|Joao Nuno Riquito||Carlos Eduardo Coelho|
On May 13 2016, Macau's Gaming Inspection and Coordination Bureau, the DICJ, introduced new anti-money laundering (AML) and terrorism financing preventive measures. These were included in DICJ Instruction number 1/2016. This revokes its predecessor, Instruction number 2/2006.
The new regulation establishes the minimum duties, rules and procedures that must be performed in the gaming industry by imposing tighter AML obligations. It introduces a more stringent control of the activities of gaming promoters, or so–called junkets, and of their compliance with AML obligations by creating two layers of control. Adherence to the rules is supervised by gaming concessionaires and sub-concessionaires, casino operators and ultimately the DICJ. The new Instruction gives particular attention to customer due diligence, especially regarding politically exposed persons (PEPs), and to the identification (or otherwise) of the ultimate beneficiaries in Macau casinos.
Despite the changes, the Instructions target the same entities and the threshold for reporting large transactions remains MOP500, 000 (approximately $62,550). This is notwithstanding public criticism and recommendations, particularly from US government entities, that the threshold be lowered.
The main innovations are:
- the definition of a so-called ultimate beneficiary as the person(s) that ultimately control(s) a client and/or on whose behalf any operation is made;
- the distinction between foreign and domestic PEPs. Both definitions include PEPs' close family and third parties with corporate ties;
- the DICJ must pre-approve the Instruction addressee's AML internal rules and procedures;
- these rules include customer due diligence obligations such as the identification of ultimate beneficiaries;
- close monitoring of PEPs includes the obligation for casino operators, at director or executive level, to approve PEPs' play;
- addressees are forbidden from conducting business with anonymous persons or those using aliases;
- the introduction of a risk-based approach and continuous evaluation of internal controls;
- suspicious transaction reports and large transaction reports submitted by gaming promoters will be subject to, respectively, control or review and a signature by casino operators;
- the regulation of operations using transferable negotiable instruments, the use of new technologies and electronic transfer of funds;
- a focus on compliance-related matters, including determination of the duties and guarantees of the compliance officer.
Joao Nuno Riquito and Carlos Eduardo Coelho