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Mauritius de-listed – the way forward

4 March 2022
– 8 Minute Read


2022 has kicked off on a positive note for Mauritius as it no longer features in the non-compliant jurisdiction lists of any international supervisory bodies.

On 7 January 2022, the European Parliament and the European Council delisted Mauritius from the EU List of High-Risk Third Countries (EU Blacklist) after being satisfied that the country no longer has any strategic deficiencies in its anti-money laundering and combatting the financing of terrorism (AML/CFT) framework. This decision was recently formalised when the EU published an updated list of High-Risk Third Countries. 

Mauritius had previously been listed by the Financial Action Task Force (FATF) as a jurisdiction under increased monitoring and had been included on the FATF Grey List. The country was subsequently listed on the EU Blacklist and thereafter on the UK List of High Risk Third Countries. 


The repercussions of Mauritius being perceived as a country having a high money laundering and terrorism risk profile, have been serious. Doing business, especially with members of the EU, became increasingly difficult, which adversely affected the economy. The impact was especially severe in the global business and the banking sectors.

For instance, the application of enhanced due diligence caused serious delays in payments by banks and in the conclusion of transactions generally. This had a negative impact on trade, increased cross-border transaction costs, and limited the country’s ability to conduct business effectively. In some cases, investors opted to move the domicile of their businesses, while new investors looked for more compliant jurisdictions.


The Government of Mauritius along with stakeholders in the financial system worked relentlessly to implement the FATF recommendations by reinforcing the legislative and regulatory frameworks. The ultimate aim was to have Mauritius removed from the sanction lists and to restore the country’s reputation as a trusted and robust international financial centre. 

Several actions were taken, including the following:

  • The Financial Services Commission (FSC), which regulates the non-bank financial markets, provided guidance on money laundering and terrorist financing risks and obligations to its licensees;
  • The FSC updated its AML/CFT handbook, published an enforcement manual, a settlement framework and an administrative penalties regulatory framework aligned with the AML/CFT international standards; and
  • The FSC applied sanctions and monetary penalties for AML/CFT breaches. 

Following various plenary sessions and an on-site review, the FATF was satisfied of the progress Mauritius had made in re-enforcing its AML/CFT framework.


The stakeholders are now focused on restoring the reputation of Mauritius as a reliable international financial centre, whilst simultaneously working on plans to further develop the financial services sector and offer new services and products. 

Mauritius remains a favoured jurisdiction because of its location which allows it to bring together all African markets and encourage investments across Africa, Asia, Australia and the Middle East.

Other features that distinguish the country are its political stability and highly skilled labour force fluent in both French and English. 

The country’s impetus for change on the legal, corporate and technological fronts is reflected in numerous reforms to key legislation such as the Banking Act, Financial Intelligence and Anti-Money Laundering Act, Financial Services Act, Information and Communication Technologies Act and also through the introduction of a range of innovative products and services. Some examples follow.

Regulatory sandbox authorisation

The regulatory sandbox allows a person or a body corporate to test an innovative financial product or service that is not regulated.

An authorisation from the central bank or the FSC must first be sought. After a test has proven successful, the central bank or the FSC may grant an authorisation or a licence to conduct such activity and may further issue relevant guidelines, instructions or directives.

To obtain an authorisation and a subsequent licence, applications in prescribed forms must be made and specific criteria must be fulfilled. 

This reform has been introduced to encourage innovation in fintech, regtech or other financial products or services. It is undoubtedly a step towards expanding the range of products available and stimulating digital transformation.

Green and blue bonds 

Sustainable investment has been gaining traction as investors have become increasingly conscious of the environmental and social impacts of the projects they finance. Sustainable bonds are financial instruments that support sustainable development by raising capital to finance green or social or sustainability-linked projects.

Blue and green bonds can now be issued and listed on exchanges licensed in Mauritius. Frameworks setting out the requirements and process for issuing and listing such bonds have been devised by the central bank and supplemented by the FSC in line with international practices.

The introduction of these financial products will enhance the competitiveness of Mauritius on an international level and attract investors who are seeking to channel their funds into sustainable projects aimed at addressing environmental and social issues in Africa.

Virtual assets

Virtual assets make payments easier, faster and cheaper and provide alternative methods for those without access to regular financial products.

A new legislative framework, namely the Virtual Asset and Initial Token Offerings Services Act 2021, has recently come into force setting out the requirements for virtual asset service providers to be so licensed as well as their financial and regulatory obligations towards the FSC. For the sound operation of the virtual assets sector, Mauritius has adhered closely to the FATF standards to prevent the misuse of virtual assets for money laundering or for the financing of terrorism.

This demonstrates the country’s aim to re-position itself as a robust financial service provider. 

Variable capital company

The variable capital company (VCC) has gained popularity in other jurisdictions, such as Singapore, because of its flexibility of having the characteristics of a company as well as that of a fund. 

The Government has framed legislation for the incorporation, conversion, structure and operation of VCCs – a draft VCC Bill is in circulation for public comment. 

Noteworthy provisions include the fact that a VCC can operate either as a collective investment scheme or as a closed-end fund. It may also be structured as a single fund or as an umbrella VCC, the latter consisting of either one or more sub-funds or a fund and at least one special purpose sub-fund (SPC). The umbrella VCC may operate as both a collective investment scheme and a closed-end fund at the same time, while the SPC can only operate as an investment holding or special purpose company.

Interestingly, a sub-fund and a SPC may elect to have a separate legal personality from the umbrella VCC such that the assets and liabilities of one sub-fund or SPC are segregated from another. As such, the liabilities of a sub-fund under an umbrella VCC can only be discharged from its assets and not out of the assets of the other sub-funds or SPC.

The introduction of this new corporate vehicle clearly indicates the intent to introduce innovation in the range of products available to investors. 

Special purpose acquisition company

A special purpose acquisition company (SPAC) is a popular investment route for investors looking to raise funds to acquire an existing company. This is done through an initial public offer. The SPAC may then acquire an existing operating company which then becomes a listed company.

This is a welcome addition to the range of products on the financial market.  


The capital market has been transformed through the launch of Afrinex Ltd. Afrinex is a first-of-its-kind, multi-currency and multi-asset universal exchange. It provides the opportunity to operate equity, fixed income and derivatives across asset classes according to the highest regulatory compliance, and serves as the first pan-African exchange in Mauritius with a global reach.

The launch of Afrinex came at an opportune time – shortly after Mauritius had existed the FATF Grey list – enhancing the country’s profile as a robust international financial centre.


The past two years have been challenging for Mauritius on the financial and economic front and the Covid-19 pandemic has only exacerbated matters.

It is worth highlighting that Mauritius was on the FATF Grey List for a shorter time than its counterparts. With the collaboration of the relevant financial institutions (including the Bank of Mauritius, the FSC as well as the FATF and the ESAAMLG) the Government completed its FATF action plan ahead of the timeline provided. In so doing, Mauritius has shown resilience and a strong commitment to becoming a highly compliant jurisdiction.

Now that it is cleared from all international sanction lists, Mauritius is determined to continue its efforts to be perceived as a jurisdiction that is highly compliant with international standards and best practices. Financial players will continue to strive for the effective implementation and application of AML/CFT laws and regulations; will be on the lookout for any AML-CFT risks; and will sanction malpractices. In parallel, the country will keep diversifying its financial services sector to remain competitive on an international level.

Overall, the outlook is positive for Mauritius.