The government of Mauritius passed the Anti-Money Laundering and Combatting the Financing of Terrorism (Miscellaneous Provisions) Act (AML-CFT Act) on 9 July, which amends 19 existing pieces of legislation to align Mauritius with the recommendations of the Financial Action Task Force and the European Commission.
The Financial Action Task Force placed Mauritius on its list of “jurisdictions under increased monitoring”, commonly referred to as the “grey list”, on 21 February. The government gave a high level political commitment to the FATF to implement an Action Plan within agreed timelines and has been taking all necessary measures to honour this commitment.
Under the FATF Action Plan, Mauritius does not have technical compliance issues. The AML/CFT legal framework has been extensively revamped and Mauritius was largely compliant or compliant with 35 out of the 40 FATF Recommendations, as compared to 14 largely compliant or compliant ratings at the time of the publication of its Mutual Evaluation Report in September 2018.
As a consequence of the FATF listing, however, the European Commission also included Mauritius on its list of ‘high-risk third countries’ on 7 May. These are countries that have been identified as having strategic deficiencies in their AML/CFT regimes which pose significant threats to the EU financial system. Subject to approval by the European Parliament and Council, the change will apply on 1 October 2020.
The Mauritian government indicated that it would seek to comply with FATF Recommendations and to exit both the FATF ‘grey list’ and EU ‘high risk’ list swiftly. The new AML-CFT Act introduces the following amendments, among others:
- New companies, limited liability partnerships, limited partnerships and foundations must provide their beneficial ownership information to the Registrar of Companies upon incorporation and registration, and later when making certain mandatory filings. Existing entities will have to provide this information when requested by a competent authority.
- Regulated persons now have only five days from the discovery of a suspicious transaction, or from the reasonable belief that a suspicious transaction has been made, to file a suspicious transaction report to the Financial Intelligence Unit.
- Regulators, notably the Bank of Mauritius, have been given broader powers to supervise and examine the operations and affairs of their licensees. The Registrar of Companies and the Financial Services Commission are making increasingly frequent inspections of regulated entities’ books and records.
- Fines for non-compliance have been increased to a maximum of MUR10 million (USD250,000), with five-year prison sentences for serious offences.