Macau seeks curbs on China's UnionPay bank card in casinos: source

Fri May 16, 2014 8:53am EDT
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By James Pomfret and Farah Master

MACAU (Reuters) - Macau authorities have urged banks to restrict the use of a Chinese state-backed bank card which racked up $22.5 billion in transactions last year, a person with direct knowledge of the matter told Reuters, in a bid to curb the increasingly large amounts of money being illegally taken out of China.

Macau is the world's largest gambling market, and a popular destination for Chinese gamers who bet up to millions of yuan at a time. The crackdown follows a Reuters investigative report in March that highlighted the illegal use of UnionPay cards to evade China's strict currency-export controls.

The person, who declined to be identified given the confidentiality of the matter, attended a high-level meeting organized by the Monetary Authority of Macau, or central bank, last Friday during which it laid out guidelines to restrict the use of UnionPay cards at shops selling jewellery and other luxury items located on casino gaming floors.

Banks were also urged to restrict loans or funding to retailers identified by UnionPay as engaging in illegal transactions, the source said.

"We don't know yet whether all the existing stores will be closed, or whether only the newer ones will be closed ... We will only know for sure when they send us their formal guidelines," the source added.

Chinese nationals, who are only allowed to take up to 20,000 yuan, or $3,200, out of China in cash a day, often get around this limit by pretending to purchase expensive items from such stores using their UnionPay cards.

Instead of actually receiving the items, the punters are given hard cash.

The source said the monetary authority didn't specify the exact scope of the restrictions or say whether the guidelines were binding or carried any penalties. Any measures would take effect on July 1, the source added.   Continued...

Chinese visitors walk past a sign for China UnionPay outside a pawnshop in Macau, in this November 20, 2013 file photo. REUTERS/Tyrone Siu/Files