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Viewing cable 06HONGKONG4755, U.S.-MACAU INTERACTIONS EXPANDING, OPPORTUNE
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
06HONGKONG4755 | 2006-12-15 10:56 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Hong Kong |
VZCZCXRO6190
PP RUEHCN RUEHGH
DE RUEHHK #4755/01 3491056
ZNR UUUUU ZZH
P 151056Z DEC 06
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC PRIORITY 9817
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC PRIORITY
INFO RUEHBJ/AMEMBASSY BEIJING 9939
RUEHCN/AMCONSUL CHENGDU 0990
RUEHGZ/AMCONSUL GUANGZHOU 0267
RUEHGH/AMCONSUL SHANGHAI
RUEHSH/AMCONSUL SHENYANG 3459
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEHIN/AIT TAIPEI 4289
RUEATRS/DEPT OF TREASURY WASHDC
RHMCSUU/FBI WASHINGTON DC
UNCLAS SECTION 01 OF 04 HONG KONG 004755
SIPDIS
SENSITIVE
SIPDIS
STATE FOR EAP/CM
STATE FOR L/LEI KULISH/JOHNSON
STATE FOR INL
E.O. 12958: N/A
TAGS: KJUS EFIN PREL MC
SUBJECT: U.S.-MACAU INTERACTIONS EXPANDING, OPPORTUNE
MOMENT TO NEGOTIATE MLAA
REF: HONG KONG 4735
-------------------
SUMMARY AND COMMENT
-------------------
¶1. (SBU) SUMMARY AND COMMENT. U.S.-Macau interactions are
and will continue expanding rapidly as U.S. investment pours
into Macau -- US$2.5 billion in 2006, much of it in the
sensitive gaming and entertainment industries. Increasing
interactions between the United States and Macau will
generate both more opportunity and greater necessity for law
enforcement cooperation. While U.S. law enforcement agencies
have already stepped up cooperation, exchanges and training
with their Macau counterparts (see reftel), negotiating a
Mutual Legal Assistance Agreement (MLAA) with the Macau
Special Administrative Region Government (MSARG) will provide
an important tool to formalize and expand judicial
cooperation.
¶2. (SBU) The extremely rapid expansion of Macau's gaming and
entertainment industries, combined with Macau's traditionally
loose regulatory environment, the historical presence of
organized crime and increased levels of PRC participation in
the Macau phenomenon imply a situation potentially ripe for
exploitation by criminals. Concern also exists that
business/economic development in Macau (a great deal of which
is generated by U.S. investment in Macau's gaming, convention
and tourism sectors) may be outpacing the MSARG's
capabilities to effectively regulate, oversee and support.
¶3. (SBU) With the approval of the PRC Central Government, the
Macau Government enacted a new law on November 1, 2006 that
provides Macau the authority to undertake negotiations with
foreign jurisdictions toward establishing agreements
facilitating mutual legal assistance. The MSARG government
has indicated at authoritative levels its willingness to
explore such an undertaking with the United States.
¶4. (SBU) Consulate General Hong Kong, including the law
enforcement agencies present here, recommends that the
Departments of Justice and State review the potential
benefits of negotiating an MLAA with the MSARG. (In para 11,
we cite several recent cases in which a U.S.-MSARG MLAA would
have been useful.) No such negotiation is easy, but in
Macau's case the benefits are likely to be substantial.
Given that one barrier to better law enforcement cooperation
with Macao is the MSARG's lack of international legal
expertise and inefficient interagency cooperation, we believe
that the mere act of getting organized for such a negotiation
with the United States may spur improvements in MSARG
responsiveness and law enforcement efficiency. END SUMMARY
AND COMMENT.
----------
Background
----------
¶5. (U) Since its reversion to the People's Republic of China
(PRC) in 1999, the MSARG has not engaged actively in
international bilateral agreements on mutual legal assistance
in criminal matters; to do so would have risked Macau
entering into international agreements inconsistent with its
Basic Law, a mini-constitution hammered out prior to
reversion of sovereignty from Portugal to China. Under
Article 13 of Macau's Basic Law, the PRC central government
has authority over extradition and other agreements on legal
cooperation. The PRC allowed some exceptions for the MSARG:
the Sino-Portuguese Joint Liaison Group in 1999 approved a
standard agreement on the "transfer of sentenced persons."
The MSARG and the Government of Portugal signed an "Agreement
on the Transfer of Sentenced Persons" on 7 December 1999.
The Government of Portugal and MSARG also signed a Mutual
Legal Assistance Agreement on 17 January 2001. The MSARG and
the Hong Kong Special Administrative Region signed an
"Agreement on the Transfer of Sentenced Persons" on 25 May
¶2005.
HONG KONG 00004755 002 OF 004
------------------------------------------
Legislation Allows MSARG to Negotiate MLAA
------------------------------------------
¶6. (U) On July 13, 2006, the MSARG passed new legislation
allowing and regulating international mutual legal assistance
on criminal matters. MSARG published the law on July 24,
2006 and the law became effective on November 1, 2006. The
MLAA Law states that the MSARG, with the assistance and
authorization of the PRC government, can finalize mutual
legal assistance agreements (MLAAs) with countries (excluding
the PRC) and territories. These MLAAs may include areas such
as: detaining fugitive offenders, transferring cases of
criminal prosecution, transferring prosecuted persons,
executing criminal sentences and other forms of judicial
cooperation in criminal matters.
--------------------------------------------- -----------
MSARG Senior Officials View U.S.-Macau MLAA Positively
--------------------------------------------- -----------
¶7. (SBU) In discussions between ConGen Hong Kong and the
MSARG International Legal Affairs Office in December 2005
regarding the MSARG's pending MLAA legislation, Macau
officials told us that the MSARG hoped to conclude MLAAs with
six countries: the United States, Canada, the Philippines,
Thailand, Portugal (this likely would augment or replace the
2001 agreement) and Brazil. The MSARG chose these six
countries due to the high number of their nationals in Macau
or the high number of Macau nationals in those jurisdictions.
¶8. (SBU) In November 2006, Economic/Political Chief spoke to
Florinda Chan, the Secretary for Administration and Justice
(No. 2 in Macau's government) and Ms. Chio Iek, an advisor to
the Director of the Public Prosecutions Office. E/P Chief
mentioned that the USG had noted the passage of this new law
and its effective date November 1, 2006 and asked whether it
could provide a basis for Macau to enter into expanded legal
cooperation with other countries, through the negotiation of
MLAAs or other instruments. Secretary Chan said that Macau
definitely wants to expand its cooperation with other
countries to better deal with transnational crime and also to
resolve issues of Macanese being held in prisons in other
jurisdictions, such as Hong Kong or Southeast Asia. She said
that Brazil, Thailand and the EU had already approached Macau
to explore the possibility of negotiating such agreements.
Macau will have to vet each of these decisions with the
Central Government in Beijing; once Beijing approves Macau
entering such negotiations, however, the Macau government
will carry out the negotiations itself (maintaining close
coordination with Beijing, of course).
¶9. (SBU) Chan remarked on the desirability of the U.S. and
Macau expanding legal cooperation and would "welcome a
request" from us to explore this possibility. Chio - who in
fact is a PRC official apparently seconded to the Macau
Prosecutor's office - said the point of the new law was to
provide a mechanism for Macau to expand legal cooperation
with other jurisdictions. She also made positive, though
vague, comments about expanding the U.S.'s legal cooperation
with Macau and welcomed further discussions about that. So,
while neither the USG nor the MSARG have made firm
commitments, the MSARG at authoritative levels does seem
positively disposed to discussing whether it would be useful
to try to reach an agreement between the United States and
Macau.
--------------------------------------------- --------------
U.S. - Macau Interactions (Particularly Economic) Expanding
--------------------------------------------- --------------
¶10. (U) Additionally, the USG's interest in robust
engagement with the MSARG is expanding. ConGen Hong Kong is
increasing its interactions/profile in Macau in the
commercial/economic, law enforcement, public outreach and
American Citizen services areas, among others. Many of these
areas of endeavor have the potential to generate legal
HONG KONG 00004755 003 OF 004
issues. For Example:
--U.S. private sector investment is growing rapidly in Macau,
particularly in the gaming, tourism and convention industries.
--In 2006, U.S. investment in Macau is estimated to reach
US$2.5 billion and in the 3-year period from 2006 - 2008
likely will surpass US$8 billion.
--Sands opened a casino in Macau in May 2004.
--Wynn Resort opened a resort/casino in Macau in Sept 2006.
--MGM is building a resort/casino in Macau that is scheduled
to open in 2007.
--The Sands Venetian is building a 3000-room
resort/casino/convention center that is scheduled to open in
¶2007.
--Sands Venetian continues to develop Macau's COTAI Strip and
plans a potential total investment of US$11 billion. The
flagship will be the Sands Venetian. Sands will build eleven
other hotels on the COTAI Strip as part of its overall
development plans that ultimately will be managed by renowned
hotel management firms such as InterContinental, Holiday Inn,
Four Seasons, Starwood, Sheraton, Hilton, Conrad, Fairmont,
Raffles, Shangri La, and St. Regis.
--The number of U.S. citizens living/working in Macau has
increased substantially, from an estimated 700 a year ago to
an estimated 1,400 now, and continues to grow along with the
increased U.S. investment.
--In the first nine months of 2006, 110,000 U.S. Tourists
visited Macau, equaling the total number of U.S. Tourists
that visited Macau in 2005. U.S. tourism to Macau in the
future is forecast to rise along with expected large
increases in total tourism numbers. In 1999, 7.4 million
tourists visited Macau; that number increased to 20 million
in 2006 and is expected to reach 38 million by 2010.
--The MSARG is cooperating with the USG in some law
enforcement areas. Specifically, the Macau Monetary
Authority has been providing information/documents to the
U.S. Treasury Department in the ongoing investigation of
Banco Delta Asia.
------------------------------------------
Cases Where an MLAA Would Have Been Useful
------------------------------------------
¶11. (SBU) Below are examples of recent cases where an MLAA
could have helped USG authorities obtain relevant information
or prosecute cases in the United States:
--Banco Delta Asia - The investigation into North Korean
money laundering of funds derived from illegal activities
through Macau-based Banco Delta Asia (BDA). An MLAA could
have significantly eased the process for U.S. Treasury
officials to gain access to BDA accounts and receive
information from the MSARG, for example, an audit report on
BDA by the accounting firm Ernst and Young.
--Internal Revenue Service-Criminal Investigation Division
(IRS - CID) and the Federal Bureau of Investigation (FBI) are
jointly working on a narcotics related money laundering
investigation involving about US$2 million in currency that
flowed through a nominee account at Banco Delta Asia (BDA) in
Macau. In January 2006, IRS-CID submitted a law enforcement
request to the Judiciary Police to seek bank records from BDA
that would document the transaction, but to date has not
received the requested information. An MLAA could
theoretically provide impetus for Macau to respond and
provide authenticated evidence that could be used in U.S.
courts.
HONG KONG 00004755 004 OF 004
--The U.S. Department of Justice, on behalf of the FBI, had
submitted a request to Macau in November 2005, seeking bank
records. However, Macau directed USDOJ to submit the request
to the PRC Ministry of Foreign Affairs in Beijing. The PRC
Ministry of Foreign Affairs subsequently directed USDOJ to
submit the request back to Macau. Macau authorities obtained
the requested bank documents and sent them back to the PRC
Ministry of Foreign Affairs. The PRC Ministry of Foreign
Affairs forwarded the documents to the U.S. Embassy in
Beijing, who then sent them to the U.S. Consulate in Hong
Kong. This indirect process took over six months. An MLAA
between the United States and Macau would significantly
clarify procedures for requesting and receiving such
evidence.
--In July 2002, DEA and several other international law
enforcement agencies began investigating a Taiwan-based drug
organization led by Chen Kuang-hua, which had been smuggling
heroin and methamphetamine throughout Asia, Australia, Canada
and the U.S. As a result of these investigations, the U.S.
and Hong Kong issued provisional arrest warrants for Chen
based on an indictment in Guam. An MLAA would have permitted
MSARG to do likewise. The Macau Judiciary Police provided
extensive assistance throughout this investigation, including
critical evidence related to a drug transaction that occurred
in Macau and Guam. Given that no MLAA exists, this evidence
could not be used in the Guam proceedings.
--Since 1998, DEA along with authorities from Macau, Hong
Kong, Canada and Australia have investigated the activities
of the LOI Chon-meng international drug trafficking
organization, active in trafficking methamphetamine and
heroin. The Macau Judiciary Police provided extensive
assistance, including a large amount of evidence obtained
from their financial investigation of this syndicate.
Without an MLAA, this critical financial evidence cannot be
used in U.S. court, making a U.S. indictment highly unlikely.
¶12. (SBU) ConGen Hong Kong's DEA Office also adds that drug
traffickers use Macau as a meeting spot to conduct
drug-related negotiations, money transfers, etc., as well as
an entertainment venue while "conducting business." The DEA
is also interested in money laundering in Macau and its nexus
to drug trafficking. Having an MLAA will facilitate
requesting and obtaining financial records and other official
records (hotel bill, telephone call lists, etc.) for
potential court cases which the DEA might be pursuing.
Cunningham