Identifier
Created
Classification
Origin
08HONGKONG1041
2008-06-11 09:31:00
CONFIDENTIAL//NOFORN
Consulate Hong Kong
Cable title:  

OUR MACAU AGENDA: EXPANDING RAPIDLY

Tags:  PGOV PREL ECON EINV SOCI CH HK MC 
pdf how-to read a cable
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O 110931Z JUN 08
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5050
INFO RUEHOO/CHINA POSTS COLLECTIVE IMMEDIATE
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C O N F I D E N T I A L SECTION 01 OF 04 HONG KONG 001041 

SENSITIVE
SIPDIS

DEPARTMENT FOR EAP, EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 06/10/2033
TAGS: PGOV PREL ECON EINV SOCI CH HK MC
SUBJECT: OUR MACAU AGENDA: EXPANDING RAPIDLY

REF: A. HONG KONG 00645

B. HONG KONG 00894

Classified By: Consul General James Cunningham; Reason 1.4 (d)

C O N F I D E N T I A L SECTION 01 OF 04 HONG KONG 001041

SENSITIVE
SIPDIS

DEPARTMENT FOR EAP, EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 06/10/2033
TAGS: PGOV PREL ECON EINV SOCI CH HK MC
SUBJECT: OUR MACAU AGENDA: EXPANDING RAPIDLY

REF: A. HONG KONG 00645

B. HONG KONG 00894

Classified By: Consul General James Cunningham; Reason 1.4 (d)


1. (SBU) Summary: Over the past year, we have greatly
expanded our commitment of time and resources to Macau. In
November 2006, we established a "Team Macau" as a platform
for interagency coordination. All of the 13 USG agencies
represented at post participate in this effort, which was
driven in part by rapidly expanding and broadening U.S.
interests in Macau. In 2007 we developed and expanded an
agenda ranging from policy analysis and reporting, to
logistics, to law enforcement and outreach, promotion of U.S.
business and protection of the rapidly growing American
community. We have increased our understanding of and
presence in Macau, but even greater engagement is called for,
given growing U.S. interests there. We are pursuing interim
measures to expand our reach and coverage, but lack the
resources to field the full time coverage Macau merits. In a
separate message, we address long term U.S. interests in
Macau and the need for a full-time USG presence there. End
Summary.

Team Macau
--------------

2. (SBU) Consulate General Hong Kong established "Team Macau"
in November 2006 as a platform for interagency coordination,
as well as to compensate for a lack of constant presence on
the ground by leveraging multiple, limited contacts to get a
multi-faceted and coherent understanding of events in Macau
as we accelerated our engagement there. Team Macau convenes
twice each month: one meeting is dedicated to law enforcement
(LE) efforts in Macau, the other to non-LE foreign policy
initiatives, including public diplomacy and outreach,
protection of American citizen and other consular issues,
economic and political engagement, logistics and security,
and associated support. At the same time, Post created an
experimental virtual mechanism in the form of a weblog to

facilitate local and intra-Consulate coordination on
operational and substantive matters.

Management & Administration
--------------

3. (SBU) The Consulate General lies 40 miles, or one hour via
high-speed ferry, from Macau. This physical separation
presents a logistical challenge for expansion of our presence
in Macau. The Consul General has raised our concerns about
providing adequate service for the growing number of U.S.
citizens resident in (now about 2,000) or visiting Macau with
senior PRC Ministry of Foreign Affairs officials and the
Chief Executive in Macau (ref B),suggesting establishment of
a U.S. consular agent in Macau. While CE Ho was supportive,
after consultations with Beijing, the Ministry of Foreign
Affairs (MFA) responded that the concept of a "consular
agency" was unfamiliar and would require further study (Ref
B). Simultaneously, we have initiated measures to improve
transportation and communication for Consulate General staff
traveling to Macau and also expanded our range of contacts in
the MSAR for logistical and substantive matters.

Policy Issues - Macau Agenda
--------------

4. (C) Our policy engagements in Macau have grown in parallel
to the influx of American citizens and investment. Over the
past two years, we have broadened and deepened our
understanding of developments in Macau across an expanded
agenda: protection of Americans; political, economic and
social reforms; trafficking in persons; money laundering and
financial security; U.S. trade and investment; and, not
least, the key figures in Macau who have or will have
influence over U.S. interests. Below is a summary of our
successes and remaining challenges on each agenda item to
date.

Political & Economic Reporting
--------------

5. (C) Team Macau has expanded dramatically our substantive
exchanges with Macau contacts on a broad and growing range of
issues, including political reform, relations with the PRC
and other countries, press freedom, corruption, money
laundering, development of the casino industry, trade, labor,
science, environment and health. As a result, the number of
substantive reporting cables from Hong Kong regarding Macau
increased from ten in 2006 to 26 in 2007 and 14 in the first
four months of 2008. (Note: These numbers do not include
cables resulting from demarches, visits, or
Congressionally-mandated reports. End Note.) One result of

HONG KONG 00001041 002 OF 004


this increased level of engagement is that we now enjoy
greatly expanded relations with key figures in the
government, industry, media, and academia, as well as various
local associations and activist groups.

Trafficking in Persons
--------------

6. (SBU) The State Department's Office to Monitor and Combat
Global Trafficking in Persons (TIP) has recognized Macau,s
substantial progress toward a comprehensive and effective
anti-human trafficking strategy by raising it to Tier 2
status in the 2008 TIP Report released June 4; Macau had
spent two consecutive years on the "Tier 2 Watch List." That
promotion reflected significant actions taken by the MSARG,
including establishment of an interagency task force to
combat trafficking in persons. As a result, in 2008 Macau
initiated its first international TIP prosecution, and also
drafted and submitted to the legislature a comprehensive
anti-TIP bill that addresses current deficiencies in
prevention, protection and prosecution of trafficking crimes.
This development is a direct result of our consistent,
intensive efforts to engage the highest levels of the
government, including multiple TIP-related meetings between
the Consul General and Macau Chief Executive, Edmund Ho. We
also worked extensively with Macau government social welfare
and law enforcement officers, NGO's and individual activists.



7. (SBU) Post officers, working with the Department, obtained
a Women's Issues Fund grant for a local NGO in Macau -- the
Good Shepherd Sisters Women's Shelter -- to host two anti-TIP
awareness seminars, the first of which was conducted on June

5. The event served to raise awareness among various
stakeholders in Macau and strengthen public-private
partnerships to end human trafficking there. Post will
report separately on the seminar and plans for the second
event, scheduled in October 2008.

Money Laundering & Financial Security
--------------

8. (C) The Consulate General continues to expand engagement
with the Macau government to combat all forms of
transnational crime. We cooperate with numerous Macau law
enforcement entities to build their capacity and promote
their greater participation in bilateral and multilateral
operations, including against terrorism. The six U.S. law
enforcement agencies at the U.S. Consulate General in Hong
Kong actively engage their Macau counterparts to achieve
these goals.


9. (SBU) Macau's explosive growth in tourists, many of whom
carry large amounts of cash for gaming, provides an
opportunity for criminals to smuggle currency, drugs or other
illicit products. All agencies at the U.S. Consulate General
in Hong Kong are working to improve relations with Macau
policymakers, law enforcement agencies, and casino security
personnel through regular visits to discuss current trends in
smuggling and money laundering and to better understand
Macau's law enforcement challenges.


10. (SBU) We had success in encouraging Macau authorities to
make needed changes to its anti-money laundering (AML)
regime. Following U.S. Treasury,s designation of Macau,s
Banco Delta Asia as a primary money laundering concern, the
Macau government in 2006 passed a new AML law that we helped
shape, which significantly improved Macau's ability to combat
money laundering and financial crimes. The Asia Pacific
Group's (APG) mutual evaluation of Macau's AML practices in
2007, while generally positive, highlighted several
additional regulatory revisions that would bolster Macau's
AML regime. Following the evaluation, we took the initiative
to create a matrix of improvements Macau should make, putting
the MSARG on notice we would monitor its progress. Through
frequent meetings with regulators, law enforcement officials,
and financial sector professionals in Macau, we have
advocated policy and regulatory changes that would be
consistent with the APG recommendations. This would include
strengthening Macau's ability to combat money laundering
through improved customer due diligence requirements, regular
information sharing, and implementation of cash courier
declaration requirements.

Law Enforcement
--------------

11. (SBU) In that regard, several USG agencies at post have
organized training programs for Macau law enforcement
officials. In 2006, IRS officials conducted a Financial
Investigations Training Course in Macau. In 2007, U.S. Drug

HONG KONG 00001041 003 OF 004


Enforcement Administration (DEA) officers conducted two
seminars on Financial Investigations and Customs Intelligence
and Investigations. In December 2007, the INS participated
in an AML/CTF workshop for Macau casinos sponsored by the
Australian government and the International Monetary Fund.
Throughout 2007, Macanese law enforcement officials
participated in 16 International Law Enforcement Academy
training sessions in Bangkok, covering subjects including
computer crime investigations, intellectual property rights,
anti-terrorism protocols, narcotics control, and crime
analysis. This activity has continued in 2008.


12. (SBU) In response to a request from the Macau Judicial
Police and Customs Authority for assistance with increasing
numbers of West African-related drug seizures, the DEA plans
to conduct a workshop on West African drug trafficking trends
in 2008. The U.S. Federal Bureau of Investigation (FBI) is
identifying a suitable Macanese law enforcement candidate for
the FBI National Training Academy, and the U.S. Internal
Revenue Service has received funding from State/INL to
conduct training on Financial Investigative Techniques for
Corruption and Money Laundering, tentatively scheduled for
early in FY-09.

U.S. Business Expansion in Macau
--------------

13. (SBU) Macau's gross domestic product (GDP) grew by 17.0
percent in 2006 and 27.8 percent in 2007. Since
liberalization of the gaming industry began in 2002, Macau
has benefited from at least US$ 2.2 billion in investment
(the majority of which came from the U.S.),drawing
ever-increasing numbers of visitors and sharply boosting
consumption demand. Other growth areas over the past few
years include finance, insurance, construction and real
estate. Manufacturing has lagged, however, with much of
Macau's production moving to factories in mainland China.
Macau's primary exports remain textiles, garments, toys,
electronics, and footwear, and its main export market is the
U.S. Most of Macau,s imports come from mainland China and
Hong Kong.


14. (SBU) In 2006, the U.S. overtook the PRC as the second
largest investor (after Hong Kong) in Macau, accounting for
18.5 percent of foreign direct investment. In conjunction
with increased investment, U.S. exports to Macau have grown
significantly in recent years. The increasing U.S. business
presence in Macau prompted, with our support, the formation
of a separate American Chamber of Commerce in Macau in 2007.
(The American Chamber Of Commerce in Hong Kong previously
encompassed Macau.) The Consulate General continues to
support the new Chamber's social and business promotion
programs, and to encourage it to promote a positive public
image of American contributions to the Macau community. The
Consulate General meets regularly with the AmCham Macau Board
of Governors to discuss issues of concern in Macau, and has
begun a regular series of open briefings for AmCham Macau
members.

Social Network Analysis
--------------

15. (C) To support our broader engagement in Macau, over the
past year we have greatly expanded our research and analysis
of influential present and future leaders. As part of that
effort, we reviewed large amounts of information from various
sources to produce current assessments and map the influence
networks of leaders in Macau,s government and political,
economic, and cultural circles. We specifically focused on
potential successors to current CE Edmund Ho, as well as
other key figures.

Security & American Citizen Services
--------------

16. (SBU) In addition to exploring establishment of a
consular agency (see para 4 above),we are undertaking the
first comprehensive effort to prepare for future emergencies
involving American citizens in Macau. In December 2007 and
January 2008, Consular officers and LES, over several trips
visited the two major hospitals, the international airport,
ferry terminal, and the largest hotel complexes in Macau.
They met with hospital managers, airport emergency planners
and security and planning officials in the Macau government.
The visits expanded our relationships with the Macau
emergency personnel who will work with us to get information
on, and assistance to, American citizens in the event of a
future mass-casualty incident. We have added this new
comprehensive contact information into our Emergency Action
Plan (EAP). In addition to updating the EAP, we expanded our
roster of Macau wardens and brokered support from the Macau

HONG KONG 00001041 004 OF 004


AmCham to post a link to the Consulate General's website for
warden information on the AmCham web page.

Public Affairs & Outreach
--------------

17. (SBU) Post's Public Affairs Section organized outreach
programs throughout the year, especially targeting youth,
government, academic, women, healthcare professionals and
environmental audiences. In particular, a series of speaking
events conducted by Consulate General staff on "Studying in
the U.S." reached more than 1,500 middle school to
college-age students, including at some of Macau's most
prominent universities (University of Macau, Macau
Polytechnic, and Macau University of Science and Technology).
The American Corner, located at the University of Macau, was
a key venue for outreach and programming to English-speaking
audiences. We have arranged visiting speakers, such as
Professor David Lampton of Johns Hopkins University, to speak
on topics of interest in Macau, and Consulate General
officers also have discussed a wide range of topics at
conferences or other venues.


18. (SBU) Our public affairs section is working with the Hong
Kong America Center and representatives from all four of
Macau's colleges and universities to set up an NGO consortium
of the four universities to promote U.S.-Macau academic
exchange on the model of the Hong Kong America Center. The
proposed Association of Macau-U.S. Academic Exchange (AMUSAE)
is currently in the process of a lengthy bureaucratic and
political review by university, MSARG, and the PRC
Commissioner's Office. Should it be established, AMUSAE
would be able to solicit funds for new academic grants and
receive USG grants for administering Fulbright and other
exchange programs in Macau.
Cunningham