Frequently Asked Questions
How many days should the reporting entity report to the Freezing Coordination Commission after freezing actions were carried out?
Considering that all terrorist activities/weapons of mass destruction proliferation activities and related financing activities pose a serious risk and threat to the region, reporting entity should report to the Commission within 2 days after the freezing actions were carried out so that the Commission may follow up and arrange to publish the freezing actions and related information in the public database of the website of the Freezing Coordination Commission.
After a bank client conducted a transaction, the reporting entity found out later that the counterpart of the client meets the matching criteria of freezing and is considered as designated person. Is it necessary for the reporting entity to freeze the client's account?
The reporting entity should prohibit the provision of any financial services to the person who meets the matching criteria of freezing, as stipulated in Article 8 of the Law no. 6/2016, "Prohibition of the provision of assets and financial services", so that the reporting entity should immediately prohibit the client from processing the transaction. In addition, since the person concerned may carry out the transaction on behalf of or at the direction of the designated person, the reporting entity should report to the Commission within 2 working days in accordance with the provisions of Article 16, subparagraph 2 of paragraph 1 of the Law. If the reporting entity found out afterwards and had not been able to refuse the transaction immediately, it should also inform the Commission within 2 working days after discovering the fact.
In the above circumstances, since the designated person is not the client of the reporting entity, the reporting entity is only required to carry out the obligation of notification without having to freeze the assets of its clients.
If the client whose assets were frozen has a loan/automatic insurance payment in a bank, can the bank deduct funds from the client’s account for repayment of the loan/insurance payment?
Under the provisions of Article 12 of the Law no. 2/2016 "Obtaining Assets", mortgages/insurance contributions are considered basic expenses, any interested party may apply to the Chief Executive for the use of the relevant funds and pay the relevant expenses upon approval. The interested party should submit a request with explanation to the Commission, and the Commission will make relevant application to the Chief Executive for decision.
In a wire transfer if the bank requires the remitting bank to check the remitter’s identification information, it may take quite a long time (up to 1 to 2 months) and the cost required is high. How should this problem be solved?
When the bank is in doubt about the remitter, the bank should check the remitter’s identification information with the remitting bank. If the information on the sanction list is incomplete, the risk will be relatively low, because even if the bank obtains the relevant information, it cannot be regarded as an exact match; but if the information on the sanction list is complete, the bank should obtain the remitter/payee information as soon as possible for checking. Although the cost may be higher, the bank must also note that the obligation to carry out freezing actions is not just a legal responsibility; any transaction related to the sanction list and terrorists are of extremely high risk. If the bank carries out the transaction, the bank will have to bear a huge credibility risk. Therefore the bank itself should also conduct a regular review to ensure that no such transactions occur.
Can the beneficiary of an insurance policy be compensated if the information of the insured person matches exactly with that of the designated person on the sanction list and the insured person unfortunately passed away?
If the insured person unfortunately passed away, the freezing system for his relevant restraint will also be invalidated. In this case, if the beneficiary is not the designated person on the sanction list, the beneficiary may obtain the insurance company’s compensation. However, if the insurance company has reasonable ground to suspect that the beneficiary is also a terrorist or a person who has been directed by the designated person, the insurance company should, in accordance with the provisions of Article 16, subparagraph 2 of paragraph 1 of Law no. 6/2016, report to the Commission within 2 working days.
Can the beneficiary be compensated if the insured unfortunately passed away and the information of beneficiary of the insurance policy matches exactly with that of the designated person on the sanction list?
If the insured unfortunately passed away, and the relevant beneficiaries are on the sanction list, since the freezing system for their restraint is still in force, it is necessary for the insurance company to carry out the freezing procedure specified in Article 7 and refuse to provide assets and financial services specified in Article 8. At the same time, the insurance company should, in accordance with the provisions of Article 16, subparagraph 1 of paragraph 1 of Law no. 6/2016, report the freezing action to the Commission within 2 days.
If a client visits the reporting entity to conduct a transaction, the staff on the spot found that the information of the client matches exactly with the information on the sanction list, should the staff report immediately to the PJ?
In accordance with Articles 7 and 8 of the “Law on Asset Freezing Regime”, when a person or entity that matches the sanction list is found, the reporting entity should immediately freeze the assets within the scope specified in Article 7 and prohibit to provide assets and financial services according to Article 8, the reporting entity should also, in accordance with the provisions of Article 16, subparagraph 1 of paragraph 1 of Law no. 6/2016, report the freezing action to the Commission within 2 days.
The “Law on Asset Freezing Regime” does not set out the need of reporting to the police, however, it should be considered that once a positive match is determined the designated person or entity is a potential terrorist or terrorist organization and, as such, a target for criminal action under Law 3/2006 and, for that reason, the person or entity should be reported to the competent LEA which, in the case of Macao, is the Judiciary Police.
After the reporting entity carried out freezing action, will the Commission conduct an investigation again and inform the reporting entity the results? Is there any legal liability if the reporting entity is found to have carried out freezing action mistakenly?
The reporting entity need to report to the Commission within 2 days after carrying out the freezing action. After receiving the report, the Commission will forward the case to relevant agencies to initiate a criminal investigation procedure when necessary.
According to the provisions of Article 18 of Law no. 6/2016, if the reporting entity acts in accordance with the principle of good faith and has complied with the principle of due diligence to obtain the relevant information, and carry out freezing action after verification of the relevant information, it is not required to bear any responsibility. On the contrary, if the reporting entity fails to comply with Article 7 (freezing), Article 8, paragraphs 1, 2 and 4 (prohibition to make assets available and to provide financial services) and Article 16, paragraph 1 (report to the Commission regarding the freezing information), the reporting entity will constitute an administrative offense and will be fined in accordance with the provisions of Article 32 and according to the circumstances applicable to criminal penalties.
The Commission's hotline can be used if there is problem regarding freezing, but can the industry inquire in the form of an official letter?
The industry can consult with the Commission by hotline, letter or email. But it is suggested that the industry use the most convenient way to make inquiry, since the freezing action must be carried out immediately after the designated person or entity is identified.