Anti-Money Laundering Regulation in Macau:
The State of Play
[in Macau Business, 2005]
Jorge A. F. Godinho
Assistant Professor, Faculty of Law, University of Macau
In the last issue of Macau Business, I discussed the evolution of international standards
for combating money laundering and terrorism financing.
Here, I will summarize current Macau law implementing the six financial strategies of
crime control required by international law:
a) the crime of money laundering;
b) the crime of financing of international terrorism;
c) confiscation of proceeds of crime, including ‘expanded’ confiscation;
d) seizure of assets;
e) detection mechanisms, including customer due diligence, record-keeping and
reporting of suspicious transactions;
f) asset freezes ordered by the United Nations’ Security Council.
a) The criminalization of money laundering is required by international instruments
such as the 1988 Vienna Convention and the 2000 Convention against transnational
organized crime. This crime was introduced in Macau by article 10 of Law no. 6/97/M,
of July 30 (the so-called ‘organized crime law’), with the broadest possible range of
predicate offences, and stiff penalties. While the crime raises various practical and
theoretic issues that authors and courts will continue to debate and clarify, there is no
doubt that Macau complies with international standards in this regard.
b) The criminalization of the financing of international terrorism is required by the 1999
Convention on this issue and by UN SC Resolution 1373, of September 2001. Macau
law needs updating on this point, as the 1995 Criminal Code (art. 289) defines terrorism
in a domestic manner, covering only acts against the Macau SAR.
c) Confiscation of proceeds of crime, which is required by a host of international
instruments, is a centuries-old criminal law reaction for ensuring that ‘crime does not
pay’. It is regulated in the Criminal Code (article 103), and in article 22(2) of Decree-
Law 5/91/M, of January 28, regarding drugs. Confiscation depends on concrete
evidence of the illegal source of the property liable to confiscation.
Given the perceived difficulty for the prosecution to produce such evidence, there is a
trend to create ‘expanded’ forms of confiscation, namely on the basis of a reversal or a
relaxation of the burden of proof as to the property’s origin. However, this is not
required in a binding manner by any international law instrument applicable to Macau.
Still, there is a form of ‘expanded’ confiscation in Macau, in the context of anti-
corruption laws (article 28 of Law no. 11/2003, of July 28): persons who have assets
abnormally higher than those declared in their prior asset declarations, and who do not
concretely justify when and how they were gained, or their legal origin, are punishable
with a penalty of up to three years of imprisonment and a fine, and shall have such
d) Seizure of assets is an interim procedural measure leading to confiscation (or to the
release of the seized property, if no evidence of wrongdoing is found), which is
invariably required by international law instruments in tandem with provisions on
confiscation. Macau law – namely, the Criminal Procedure Code – fully complies with
this international standard. Bank secrecy cannot be invoked to prevent the seizure of
e) Detection mechanisms proposed by the Basel Committee and the FATF, and required
by various international treaties, include three key components: customer due diligence
(including customer acceptance policies, customer identification requirements, and
ongoing monitoring); record-keeping; and reporting of suspicious transactions.
The identification of customers of financial institutions is required by article 106 of
Decree-Law no. 32/93/M, of July 5 (the Macau banking law), and additional guidelines
of the Monetary Authority detail the matter, allowing for a ‘risk-based’ approach, that is,
for conducting more or less due diligence depending on the level of risk of money
laundering. For cash transactions with occasional customers, the threshold triggering
identification requirements is MOP$20,000.
On record-keeping, the general requirement under the Commercial Code applies: all
business records must be kept for 10 years.
The duty to report suspicious transactions to the Judiciary Police is stated by Decree-
Law no. 24/98/M, of June 1. This law applies to: financial institutions; gaming
sub/concessionaires and promoters; pawn shops; dealers in antiques, works of art,
precious metals and stones; and real estate agents. It does not apply to auditors,
accountants or lawyers. Macau does not have a specialized ‘financial intelligence unit’
for the collection and analysis of suspicious transactions reports.
f) Supra-national sanctions (and asset freezes in particular) initiated by the UN Security
Council are approved as a consequence of the Council determining that there is a threat
to international peace and security. The decisions are binding: UN Member States must
do whatever necessary in their domestic legal systems to comply with such resolutions.
In Macau the issue is addressed by Law no. 4/2002, of April 15, which regulates the
execution of international norms in the domestic legal order. It details how UN
resolutions are implemented in the SAR; which departments and agencies are
responsible for enforcement and supervision; which penalties apply to the breach of
international sanctions. The text of the resolutions approving sanctions programs, and
the lists of persons and entities targeted by sanctions, are published in the Macau
Additional regulation by the Monetary Authority requires financial institutions to report
to the Public Prosecution or the Judiciary Police any listed persons encountered in their
transactions, and requires them to develop databases on suspicious terrorists and
terrorist organizations. It is the financial institutions’ responsibility to ensure that they
have mechanisms in place to detect any accounts of or transactions by targets of
sanctions, and to ensure that the lists are updated.
Note: Macau does not have a specialized ‘financial intelligence unit’ for the collection
and analysis of suspicious transactions reports