MAURITIUS: UPDATE ON FATF GREY LIST
Mauritius was added to the EU list of high-risk third countries on 7 May 2020 (access our previous newsflash on this topic here), due to its inclusion on the Financial Action Task Force’s (FATF) list of ‘Jurisdictions under Increased Monitoring’.
The FATF identified Mauritius as having the following strategic deficiencies in its anti-money laundering/ combat the financing of terrorism (AML/CFT) regime:
- deficiencies in demonstrating that the supervisors of its global business sector and Designated Non-Financial Businesses and Professions (DNFBPs) implement risk-based supervision;
- failure to ensure access to accurate basic and beneficial ownership information by competent authorities in a timely manner;
- failure to demonstrate that law enforcement authorities have capacity to conduct money laundering investigations, including parallel financial investigations and complex cases;
- failure in implementing a risk-based approach for the supervision of its non-profit organisation (NPO) sector to prevent abuse for terrorist financing purposes; and
- failure to demonstrate adequate implementation of targeted financial sanctions through outreach and supervision.
The Government has made a high-level political commitment to address these issues by September 2021 at the latest and has taken several steps to resolve them, including:
- providing powers to regulators of DNFBP to supervise and enforce compliance to AML/CFT legislations by members of relevant professions or occupations falling under their purview;
- imposing obligations on institutions to obtain and verify beneficial ownership information and to lodge this information to the registrars in certain circumstances; and
- putting in place procedures and identifying domestic competent authorities responsible for implementing and enforcing targeted financial sanctions.
The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which is the FATF-style regional body for Eastern and Southern Africa and whose purpose is to combat money laundering by implementing the FATF Recommendations published a follow-up report on Mauritius in January 2021. Mauritius has been recognised as having made significant progress in strengthening AML/CFT measures. ESAAMLG also noted that the country is now non-compliant on only one out of the 40 recommendations of the FATF and it is either compliant, largely compliant or partially compliant on the rest of the recommendations.
The country still has to take steps to promote targeted risk-based supervision and monitoring of NPOs and other measures to upgrade the rating for each recommendation to ‘Compliant’.
The Ministry of Financial Services and Good Governance issued a communique on 27 January 2021 to reiterate its commitment to exit the FATF list as soon as possible.
Mauritius continues to battle its way out of the grey list and now looks ahead to the next FATF plenary session to be held at the end of this month during which its second progress report, the ESAAMLG’s follow-up report and the report of the FATF assessment team will be considered.