Is it money laundering. Case study of China UnionPay scandal from the perspective of mutual legal assistance on anti-money laundering

Author:Zeyu Huang
Position:Faculty of Law, University of Macau, Taipa, Macao
Pages:411-424
SUMMARY

Purpose - This paper aims to, inspired by the media report concerning the misuse of China UnionPay cards, examine the elements of money laundering offence in Macau SAR through a case study, which also calls for the mutual legal assistance between mainland China and Macau. Design/methodology/approach - This paper provides the case study ... (see full summary)

 
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Is it money laundering
Case study of China UnionPay scandal from
the perspective of mutual legal assistance on
anti-money laundering
Zeyu Huang
Faculty of Law, University of Macau, Taipa, Macao
Abstract
Purpose – This paper aims to, inspired by the media report concerning the misuse of China UnionPay
cards, examine the elements of money laundering offence in Macau SAR through a case study, which
also calls for the mutual legal assistance between mainland China and Macau.
Design/methodology/approach – This paper provides the case study of China UnionPay scandal in
accordance with Macau law and comparative analysis of legislation and regulations in mainland China
and Macau. Relevant suggestions are presented.
Findings Despite the lack of actually discovered money laundering cases involving China
UnionPay, the methods of smuggling money from mainland China across the border to Macau implied
a “risk exposure” of Anti-Money Laundering (AML) mechanism of Macau SAR. The risk of money
laundering therein makes it necessary to establish and enforce the inter-regional mutual legal
assistance for AML. Sensitive issues thereof shall be handled ipso jure and reasonably.
Practical implications This paper is a good attempt to touch upon the long-term puzzle in
inter-regional mutual legal assistance in Greater China. The specic case study may act as an
ice-breaker about how to develop inter-regional mutual legal assistance in specic criminal matters.
Originality/value – This paper, rst, reacts to the legal problem caused by China UnionPay scandal,
which also will be benecial for the legal debates and policy-making upon the establishment and
enforcement of mutual legal assistance in Greater China.
Keywords Money laundering, China UnionPay scandal, Inter-regional mutual legal assistance
Paper type Research paper
1. Introduction
Whilst President Xi Jinping’s anti-corruption campaign has grown bigger and broader
since being in power, a question worth pondering on has arisen that where the proceeds
of the corruption have gone. Considering that corruption and money laundering are
“twin problems”, “symbiotic”, “an exemplary actual case of the corruption-money
laundering nexus” (Chaikin and Sharman, 2009), there would be a corresponding surge
of detection of money laundering involving the proceeds of corruption in Greater
China[1]. Until very recently, a special report published by Reuters (Pomfret, 2014)
revealed that China UnionPay, a Chinese state-backed payment card network, has been
illegally used as the conduit for the cross-border movements of cash from mainland
China to Macau SAR. This report might be an indication that China UnionPay network
acts as one of the major gateways through which the ill-gotten funds can be transferred
abroad to be laundered, especially the proceeds of corruption.
The authors extend thanks to Professor Jorge A.F. Godinho for help with the paper.
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
China
UnionPay
scandal
411
Journalof Money Laundering
Control
Vol.18 No. 4, 2015
pp.411-424
©Emerald Group Publishing Limited
1368-5201
DOI 10.1108/JMLC-06-2014-0016

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