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Macau regulators clamp down on UnionPay cards amid strict exchange controls

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Macau regulators clamp down on UnionPay cards amid strict exchange controls

Macau regulators warned financial institutions against the illegal use of China Unionpay Co. Ltd. cards to avoid stringent exchange controls, Reuters reported June 7.

The move is part of China's plan to suppress illicit capital flows. It also comes after Macau's public service broadcaster TDM reported pawn shops operating in the autonomous region's casinos had had their UnionPay point-of-sales, or POS, terminals removed.

It was found in 2014 that many Chinese used Unionpay cards to bypass daily cash withdrawal limits of 20,000 yuan for gambling or overseas transfer purposes.

In a June 6 statement, Autoridade MonetÁria De Macau said banks are required to perform ample, and ongoing, due diligence on merchants in order to prevent abuse of POS machines from illegal activities.

The monetary authority added it does not bar lenders from business relationships with merchants of particular industries, but requires them to have appropriate and adequate risk management measures before offering financial services in the course of normal business.

It said only banks, money changers remittance companies and the postal savings office can offer money exchange or remittance services to the public in Macau.

China UnionPay did not comment on the matter, Reuters said.

As of June 7, US$1 was equivalent to 6.39 Chinese yuan.