FATF Status

Macau is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Macau was undertaken in 2019. According to that Evaluation, Macau was deemed Compliant for 22 and Largely Compliant for 18 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 6 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

US Department of State Money Laundering assessment (INCSR)

Macau was deemed a Jurisdiction of Primary Concern by the US Department of State 2018 International Narcotics Control Strategy Report (INCSR). key Findings from the report are as follows: -

Overview

Macau, a Special Administrative Region of the People’s Republic of China, is not a significant regional financial center.  Its financial system, which mostly services a local population, includes offshore financial businesses such as credit institutions, insurers, underwriters, and trust management companies.  The offshore sector is subject to supervisory requirements like those of domestic institutions and to oversight by the Monetary Authority of Macau.  Law No. 15/2018, stipulates that from January 2021 the offshore regime will be permanently terminated.  The COVID-19 pandemic has restricted the flow of visitors from mainland China to Macau, which has almost certainly reduced some opportunities for money laundering.  

EU Tax Blacklist

Macao was removed from EU Tax Blacklist on 23 January 2018 following "commitments made at a high political level to remedy EU concerns".

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           N/A

World Governance Indicator – Control of Corruption              80

Macau became a Special Administrative Region (SAR) of the People’s Republic of China (PRC) on December 20, 1999. Macau’s status since reverting to Chinese sovereignty is defined in the Sino-Portuguese Joint Declaration (1987) and the Basic Law (the SAR’s de facto constitution). Under the concept of “one country, two systems” articulated in these documents, Macau enjoys a high degree of autonomy in economic matters, and its economic system is to remain unchanged for 50 years following the 1999 reversion to Chinese sovereignty. Macau, a separate customs territory from mainland China, describes itself as a liberal economy and a free port.  Tourism is the basis of the Macau economy. The Government of Macau (GOM) maintains a transparent, non-discriminatory, and free-market economy. The GOM is committed to maintaining an investor-friendly environment.

In 2002, the GOM ended a long-standing gaming monopoly, awarding two gaming concessions and one sub-concession to consortia with U.S. interests.  This opening encouraged substantial U.S. investment in casinos and hotels and has spurred rapid economic growth in the tourism, gaming, and entertainment sectors, among which the gaming industry constitutes the most important pillar of Macau’s economy. The GOM collected gaming tax revenue of $2.4 billion in 2022, accounting for less than 20% of the total government expenditure of $12.4 billion that year. In 2007, Macau surpassed Las Vegas in annual gaming revenues to become the world’s biggest gaming center after its liberalization of the gaming industry. Prior to the pandemic Macau’s gaming revenues were roughly seven times higher than Las Vegas’s. However, in 2022 Las Vegas once again outperformed Macau largely because the SAR continued its strict border controls to contain the COVID-19 pandemic by adhering to the PRC’s Zero COVID Policy for a third year.

Macau recorded $5.3 billion in full-year casino gross gaming revenue in 2022, a 51.4 percent decrease from the previous year’s total and hitting a new annual low since 2005. U.S. investment over the past decade is estimated to exceed $24 billion.  In addition to gaming, Macau aspires to position itself as a regional center for incentive travel, conventions, and tourism, though to date it has experienced limited success in diversifying its economy.  In 2007, business leaders founded the American Chamber of Commerce of Macau.

Macau also seeks to become a “commercial and trade cooperation service platform” between mainland China and Portuguese-speaking countries.  The GOM has various policies to promote these efforts and to create business opportunities for domestic and foreign investors. Many infrastructure projects are currently underway, such as new casinos, hotels, subways, airport expansion, and the Macau-Taipa 4th vehicle harbor crossing that started construction in August 2020, which is expected to be completed in the first quarter of 2024.

Country Links

Financial Intelligence Office (GIF)

Monetary Authority of Macao