China’s feared Ministry of Public Security to monitor Macau bank transactions


china-ministry-public-security-macauMacau casinos’ ongoing gaming revenue slump could become the ‘new normal’ following a new Beijing-ordered crackdown on money transfers. On Tuesday, the South China Morning Post reported that China’s feared Ministry of Public Security plans to scrutinize all money transfers via the popular China UnionPay bank payment cards in a bid to identify suspicious transactions.

The SCMP’s sources say Ministry of Public Security officials traveled to Macau on Nov. 20 for a high-level meeting with bankers and local law enforcement agencies. On Monday, Macau banks received notices detailing the Ministry’s plan to allow its Economic Crimes Investigation Bureau to monitor all electronic money transfers from the mainland.

While previous UnionPay crackdowns targeted mostly mass-market gamblers using their cards to obtain cash from Macau pawn and jewelry shops, the involvement of the Ministry of Public Security suggests the new target is VIP gamblers and the junket operators who help VIPs move money off the mainland.

A source told the SCMP that the Ministry appeared to be “looking for big guys, not the rank and file” and warned that “the casinos’ own VIP marketing teams ought to be cautious, too.” The Ministry’s involvement strongly suggests the new rules are part of its ‘Fox Hunt’ operation targeting Communist party officials who have spirited away millions of dollars in illegally obtained funds. Late last month, Macau pledged to share financial info with the US Treasury Department’s Financial Crimes Enforcement Network in a bid to combat money laundering.

The Ministry has also reportedly enlisted Hong Kong authorities in its bid to staunch the flow of unauthorized money to Macau. Late last month, Hong Kong police froze the assets of several companies associated with Cheung Chi Tai, who, depending on whom you ask, is or was a significant investor in the Neptune Group, one of Macau’s leading junket operators. The assets were frozen after Hong Kong authorities were unable to ascertain Cheung’s whereabouts.

News of the new crackdown comes just days ahead of the visit to Macau by China’s Premier Xi Jinping to celebrate the 15th anniversary of the special administrative region’s handover from Portugal. Xi’s visit was preceded by what many believed were more of Beijing’s routine warnings to Macau to diversify its economy beyond gaming. Not so routine, it seems.