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[h=1]Singapore casino at risk of Beijing crackdown over capital flight through potential misuse of UnionPay network[/h]
Potential misuse of banking network and the violation of China’s currency controls could well lead to Beijing extending its action over capital flight
Beijing’s crackdown on capital flight could be about to extend to Singapore amid concerns that large sums of money may have been funnelled out of the mainland in violation of China’s strict currency controls through casinos in the city state.
As the nation battles to plug holes in a system which is seeing billions haemorrhage from a slowing economy at a time of unprecedented global uncertainty, a potential misuse of the China UnionPay banking network at casinos in Singapore could be contributing significantly to capital flight.
The concerns centre on a casino “resort entertainment” voucher programme which gives UnionPay card holders access to gaming chips – a purchase which a top official at the People’s Bank of China has told the South China Morning Post is outlawed.
When told of the programme by the Post, Xie Zhong, the director of the payment settlement department at the central bank in Beijing, said: “China UnionPay’s bank cards should certainly not be used in casinos.”
The bank oversees the operation of China UnionPay.
The city state’s gaming watchdog, the Singapore Casino Regulatory Authority, declined to comment despite being asked three times to do so by the Post.
The amount of revenue generated by the programme is not known, but it was launched by the Marina Bay Sands casino resort in February 2015, the promotional material says.
“The purpose is to allow members who use China UnionPay, Visa and MasterCard credit or debit cards to make purchases of the resort entertainment vouchers and use it as a mode of payment for gaming chips,” the material reads.
China UnionPay also did not respond to questions about the programme.
Marina Bay Sands defended the programme, saying it complied with terms and conditions of use for China UnionPay cards.
Ron Reese, senior vice-president of global communications and corporate affairs for the Las Vegas Sands Corporation, said: “The resort entertainment voucher programme at Marina Bay Sands was designed to give guests increased flexibility in purchasing a variety of goods and services.
“We are pleased to be part of the UnionPay network, which allows Chinese consumers to purchase goods and services at locations in countries around the world. Marina Bay Sands operates the resorts entertainment voucher programme in accordance with the terms and conditions of China UnionPay cards. We look forward to continuing to offer this amenity.”
Banks assume the ‘burden of proof’ in China’s crackdown on capital flight
Among a raft of measures in November to stem capital flight, China’s central bank ordered lenders to stop issuing credit cards that allow customers to transact purchases in dual currencies.
The move meant credit cards issued on the mainland with Visa or MasterCard must be replaced with those issued by China UnionPay, the country’s dominant currency clearing company, when they expire, a policy that will help Beijing better monitor capital flows across borders.
Prior to that, China UnionPay banned mainlanders using its cards to buy investment-linked insurance products in Hong Kong.
Concerns over the misuse of China UnionPay cards first surfaced in Macau, prompting a major crackdown on illicit cash outflows by Beijing.
A Macau gaming consultant who asked not to be identified said: “No bank in Macau would do the clearing work on such transactions. The monetary authority here would shut it down immediately.”
The new concerns also follow an audit report released in September by the global anti-money laundering and terrorist financing watchdog, the Paris-based Financial Action Task Force, which while giving the city a general pass mark added that: “Singapore’s financial institutions generally demonstrated a reasonably good understanding of money laundering risks impacting Singapore domestic clients, but a less developed understanding of the risk of illicit flows into and out of Singapore.”
Potential misuse of banking network and the violation of China’s currency controls could well lead to Beijing extending its action over capital flight
Beijing’s crackdown on capital flight could be about to extend to Singapore amid concerns that large sums of money may have been funnelled out of the mainland in violation of China’s strict currency controls through casinos in the city state.
As the nation battles to plug holes in a system which is seeing billions haemorrhage from a slowing economy at a time of unprecedented global uncertainty, a potential misuse of the China UnionPay banking network at casinos in Singapore could be contributing significantly to capital flight.
The concerns centre on a casino “resort entertainment” voucher programme which gives UnionPay card holders access to gaming chips – a purchase which a top official at the People’s Bank of China has told the South China Morning Post is outlawed.
When told of the programme by the Post, Xie Zhong, the director of the payment settlement department at the central bank in Beijing, said: “China UnionPay’s bank cards should certainly not be used in casinos.”
The bank oversees the operation of China UnionPay.
The city state’s gaming watchdog, the Singapore Casino Regulatory Authority, declined to comment despite being asked three times to do so by the Post.
The amount of revenue generated by the programme is not known, but it was launched by the Marina Bay Sands casino resort in February 2015, the promotional material says.
“The purpose is to allow members who use China UnionPay, Visa and MasterCard credit or debit cards to make purchases of the resort entertainment vouchers and use it as a mode of payment for gaming chips,” the material reads.
China UnionPay also did not respond to questions about the programme.
Marina Bay Sands defended the programme, saying it complied with terms and conditions of use for China UnionPay cards.
Ron Reese, senior vice-president of global communications and corporate affairs for the Las Vegas Sands Corporation, said: “The resort entertainment voucher programme at Marina Bay Sands was designed to give guests increased flexibility in purchasing a variety of goods and services.
“We are pleased to be part of the UnionPay network, which allows Chinese consumers to purchase goods and services at locations in countries around the world. Marina Bay Sands operates the resorts entertainment voucher programme in accordance with the terms and conditions of China UnionPay cards. We look forward to continuing to offer this amenity.”
Banks assume the ‘burden of proof’ in China’s crackdown on capital flight
Among a raft of measures in November to stem capital flight, China’s central bank ordered lenders to stop issuing credit cards that allow customers to transact purchases in dual currencies.
The move meant credit cards issued on the mainland with Visa or MasterCard must be replaced with those issued by China UnionPay, the country’s dominant currency clearing company, when they expire, a policy that will help Beijing better monitor capital flows across borders.
Prior to that, China UnionPay banned mainlanders using its cards to buy investment-linked insurance products in Hong Kong.
Concerns over the misuse of China UnionPay cards first surfaced in Macau, prompting a major crackdown on illicit cash outflows by Beijing.
A Macau gaming consultant who asked not to be identified said: “No bank in Macau would do the clearing work on such transactions. The monetary authority here would shut it down immediately.”
The new concerns also follow an audit report released in September by the global anti-money laundering and terrorist financing watchdog, the Paris-based Financial Action Task Force, which while giving the city a general pass mark added that: “Singapore’s financial institutions generally demonstrated a reasonably good understanding of money laundering risks impacting Singapore domestic clients, but a less developed understanding of the risk of illicit flows into and out of Singapore.”
