MAURITIUS: WORKING TOWARDS COMING OFF THE FATF GREY LIST
As mentioned in our earlier newsflash, Mauritius was added by the Financial Action Task Force (FATF) to its list of ‘Jurisdictions under Increased Monitoring’, externally referred to as the ‘Grey List’.
The FAFT identified Mauritius as a jurisdiction having some strategic deficiencies in its anti-money laundering/combating the financing of terrorism (AML/CFT) regime particularly in its regulation of Designated Non-Financial Businesses and Professions (DNFBPs) and non-profit organisations (NPOs) sectors. It was also flagged for shortcomings in demonstrating that the supervisors of the global business sector and DNFBPs implement risk-based supervision.
In order to work its way off the Grey List to the satisfaction of FATF, Mauritius was called upon to implement an action plan, aimed at strengthening the effectiveness of its AML/CFT system and which included, amongst others:
- the implementation of risk-based supervision of the global business and DNFBP sector;
- allowing for timely access to accurate basic and beneficial ownership information by competent authorities; and
- providing training for the law enforcement agencies to conduct parallel financial investigations.
A number of steps have been taken, since then, to implement the action plan and to resolve the technical compliance shortcomings identified by the FATF. Various laws have been amended or enacted to include the FATF recommendations and the country has made key reforms by:
- conducting outreach to promote understanding of AML/CFT risks and obligations;
- developing risk-based supervision plans effectively for the Financial Services Commission (FSC);
- ensuring access to accurate basic and beneficial ownership information by competent authorities in a timely manner; and
- providing training for law enforcement authorities to ensure that they have the capability to conduct money laundering investigations.
Over the past months, regulators in Mauritius have multiplied inspections and enforcement actions in a bid to demonstrate practical adherence to FATF standards. These have included on-site inspections by the FSC and the Attorney General Office, surveys by the Registrar of Associations to identify NPOs at risk and awareness programs by the FSC for its licensees and by the Financial Intelligence Unit for DNFBPs.
The FATF has conveyed in a communication on 25 June 2021, that Mauritius has substantially completed its action plan at a technical level and that the FATF will conduct an onsite inspection in Mauritius, to verify implementation of the reforms outlined in its last progress report submitted in April 2021. The onsite inspection is expected to be the ultimate step prior to a determination in the next FATF plenary scheduled in October 2021.
Although the cost of compliance has palpably increased for industry players which had to cope with rapidly changing standards and requirements, generally the industry has conceded to the change for the sake of the whitelisting imperative. The Ministry of Financial Services and Good Governance issued a communique on 25 June 2021 to reassert the commitment of the Government to continue to take all necessary steps to sustain reforms well beyond the FATF recommendations in order to strengthen the AML/CFT regime.
In the same vein, the Government has also announced a number of measures in its budget speech 2021/2022 to continue on the path of enhancing the AML/CFT legislative framework of the country.
A Financial Crime Commission will be established to better manage in the fight against financial crime and a new Bank of Mauritius Bill and Banking Bill will be introduced reflecting best international practices.