Mauritius IFC's commitment in the combat against Money Laundering and the Financing of Terrorism and Proliferation

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) compliance have become the main focus of regulators worldwide in recent years. 

As such, the enforcement of AML/CFT laws and regulations have been stepped up by regulators as evidenced by the increase in regulatory penalties imposed against financial institutions for failure to implement adequate controls to combat Money Laundering (ML) and the Financing of Terrorism (TF).

In Mauritius, likewise, AML/CFT compliance is a permanent issue for regulators - the Financial Services Commission (FSC), the Bank of Mauritius (BOM) and relevant authorities such as the Financial Intelligence Unit (FIU) and the Independent Commission Against Corruption (ICAC) are mandated to fight corruption through investigation, prevention and education to demonstrate that Mauritius IFC is part of the international network in combating ML/TF. 

The objective is to make financial institutions comprehend that it is vital for them to make AML/CFT compliance a top priority.

To this end, Mauritius has through numerous initiatives demonstrated its unflinching commitment to combat ML/TF. Mauritius has ratified and acceded to numerous international conventions, protocols and treaties to express its commitment towards the international community to combat this scourge, amongst others, the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, commonly known as the Vienna Convention and the United Nations Convention against Transnational Organised Crime, also known as the Palermo Convention.

Mauritius has further committed itself to the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation issued, in February 2012, by the Financial Action Task Force and to its Mutual Evaluation procedure.

The various legislations enacted include the following:

• The Financial Intelligence and Anti-Money Laundering Act 2002 (FIAMLA)
• The Prevention of Corruption Act 2002
• The Prevention of Terrorism Act 2002
• Anti-Money Laundering and Countering the Financing of Terrorism Handbook (AML/CFT Handbook)

As part of the FSC initiatives to assist the financial institutions in applying national measures to combat ML/TF, the FSC released an AML/CFT Handbook in January 2020. The aim of the AML/CFT Handbook is to assist financial institutions under its purview to comply with the requirements of the FIAMLA and the FIAML Regulations 2018.

Onsite / Offsite Supervision

Onsite supervision is an important constituent of the supervisory deliverables for the FSC Mauritius. It involves supervisory visits and inspections at licensees’ place of operation. This is key for understanding a licensee’s business operations, risk management and internal controls, and for assessing compliance with its regulatory and licensing obligations.

The FSC also initiated in 2020 an AML/CFT-related Risk Based Supervisory Cycle which resulted in a vast number of onsite inspections for all the activities under its purview in order to reinforce its Risk-Based Supervision Framework. This resulted in an increase in the number of the AML/CFT onsite inspections of its licensees. Following those inspections, breaches were referred for initiation of the enforcement process.

Offsite supervision, on the other hand, forms an integral part of the FSC Mauritius’ supervisory process in ensuring that licensees are complying with applicable laws and regulations. Examination of statutory returns and audited financial statements continue to be an important feature of offsite supervision in ascertaining licensees’ compliance with regulatory and prudential requirements.

Combating Money Laundering and Financing of Terrorism through effective exchange of information

The FSC has the power to exchange information with public sector agencies, international organisations, foreign supervisory institutions or law enforcement agencies.

In addition, several Memoranda of Understanding (MOUs) were signed between the FSC and regulatory bodies (including foreign supervisory bodies) to address the framework for mutual assistance and exchange of information. The main objectives of the MOUs are inter alia to:

• consolidate supervision of cross-border operations of financial institutions;
• define mechanisms to share information in accordance with international standards; and
• reinforce collaboration amongst institutions in the fight against crime, Money Laundering and Financing of Terrorism.