Macau: AML and terrorism financing rules

Pedro Cortés	Marta Mourão

Following Notice no 009/2008-AMCM the Monetary Authority of Macau (AMCM) under its supervision power, issued new guidelines to be complied with by insurance institutions and the insurance intermediaries. These guidelines take into account the subsequent developments on anti-money laundering/combating the financing of terrorism (AML/CFT) matters, including the revisions introduced by the Financial Action Task Force on Money Laundering (FATF) in relation to international AML/CFT standards in February 2012.

These guidelines are annexed to Notice no 015/2014-AMCM that came into force on January 2 2015, revoking Notice no 009/2008-AMCM.

The FATF was established in 1989 in an effort to thwart attempts by criminals to launder the proceeds of criminal activities through the financial system. It prepared 40 recommendations against money laundering and nine recommendations on terrorist financing.

Although Macau is not a member of FATF, it has been participating regularly in the meetings organised by a similar entity at the regional level, as it is a member of the Asia Pacific Group on Money Laundering. As a member of this group, Macau shall comply with the measures provided for in FATF's recommendations and their amendments.

The guidelines annexed to Notice no 015/2014-AMCM include policies, procedures and controls to be adopted by insurance institutions to prevent and combat money laundering and financing of terrorism. These include the issuance of a clear statement of policies in relation to money laundering and financing of terrorism, which are to be reviewed on a regular basis, and the communication of these policies to all management and relevant staff.

Insurance institutions should also develop customer acceptance policies and procedures that aim to identify the types of customers and beneficial owners that are likely to pose a higher than average risk of money laundering and financing of terrorism. Likewise, insurance institutions should make all efforts necessary to determine the true identity of all customers requesting their services, this includes establishing due diligence measures to avoid anonymous accounts or accounts in fictitious names.

The new guidelines also refer to wire transfers, in which insurance institutions should take freezing action and prohibit conducting transactions with designated persons and entities. This is as per the obligations set out in the relevant UN Security Council resolutions.

The insurance industry is particularly vulnerable to money laundering and financing of terrorism. Therefore, supervision by the competent authority shall be kept tight and permeable to new forms of money laundering and financing of terrorism.

Pedro Cortés and Marta Mourão

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