Mauritius Strengthens Its Anti-Money Laundering/ Combating the Financing of Terrorism (AML/ CFT) Framework

Updated On : January 2021

On Feb 2020, the FATF (Financial Action Task Force) identified that Mauritius as a jurisdiction is having Anti money laundering strategic deficiencies and added the country on the list of Jurisdiction under Increased Monitoring. Also, as per the EU (European Union), Mauritius is having AML/ CFT regime strategic deficiencies, under the article nine of EU 4^th Anti-Money laundering directive and have added Mauritius in the list of high-risk third countries.

In response, the parliament of Mauritius has passed the Anti-money laundering and combating of the financing of terrorism (Miscellaneous Provisions) Act 2020. The aim of the act is to bring new changes in the financial services sector in order to meet with the recommended international norms and the best practices of the FATF.

This act amends 19 enactments with a view to reinforce the existing legal provisions to further combat money laundering and the financing of terrorism.

Following are the points that are covered in the act

• Information on beneficial owner
  

  As per the act a legal obligation can be taken if the applicants do not provide information related to incorporation or registration of companies, limited partnerships and foundations, beneficial owners to the respective registrars during incorporation or registration of such entities.

  Now companies have to compulsorily provide the basic information and beneficial ownership information to the competent authority (a public body responsible to combat money laundering /terrorist financing and includes an investigatory authority upon request).

  Failure to access to accurate basic and beneficial ownership details by competent authorities in a timely manner was identified by FATF. This new measure aims to give the authorities an immediate access to update the beneficial ownership information.

• Regulators of banking and non-banking financial institutions
  

  As per the act the regulators of both banking and non-banking financial institutions can carry out on-site inspections and examinations. While conducting the inspections the regulators must consider following factors

  • Money laundering risks and policies
  • Money laundering / terrorism financing risks present in the country
  • Internal controls and procedures associated with a licensee
  • The characteristics of a licensee & the degree of discretion allowed to the licensee under the risk-based approach implemented by the regulators

  The supervisors of the Mauritius global business sector implement risk-based supervision has some shortcomings was identified by FATF. With the new act regulators have mandated to review the assessment of the money laundering or terrorism financing risk profile of a licensee, when there are major events or any developments in the operations and management of the licensee.

• Penalties

  The act with reference to different legislations like Banking Act, 2004, the Financial Intelligence and Anti-Money Laundering Act, 2002 (FIAMLA) and the Prevention of Corruption Act, 2002 (POCA), to provide new severe penalties for non-compliance and breaches of AML/CFT laws which are as follows

  • If any financial institution of BOM (Bank of Mauritius) fails to comply with any guideline, directive or instructions issued by BOM with regards to CDD (Customer due diligence) measures & record-keeping of the CDD documents will be fined MUR 10 million.
  • The FIAMLA has also amended to include a new obligation of any member of a related profession or occupation should provide information to any regulatory body. Such member if convicted for non-compliance of the obligation will have to pay a fine of MUR 1 million and five years of imprisonment or a fine upto MUR 10 million may be fined upon a legal person if found to have committed a corruption offence under the POCA.

  The above changes are taken by regulatory bodies of Mauritius to demonstrate a strong determination of Mauritius to meet the FATF recommendations and are committed to improve the country’s AML/CFT regime.