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Best Practices for AML/CFT Compliance in Mauritius: A Success Story
Mauritius has made significant progress in strengthening its anti-money laundering and countering the financing of terrorism (AML/CFT) regime, addressing key deficiencies identified by the Eastern and Southern Africa Anti-Money Laundering Group’s Mutual Evaluation Report (MER) in 2018.
National Risk Assessment System
To address these shortcomings, Mauritius launched a National Risk Assessment (NRA) system in 2019 to identify and assess money laundering and terrorist financing risks in the country. The NRA exercise helped understand vulnerabilities in the financial sector and develop strategies to mitigate them effectively.
FATF Grey List and Action Plan
In January 2020, Mauritius was placed on the Financial Action Task Force’s (FATF) Grey list due to strategic deficiencies in its AML/CFT regime. However, this designation presented an opportunity for the country to enhance its AML/CFT capabilities and implement best practices.
MIPA’s Role
The Mauritius Institute of Professional Accountants (MIPA), a regulatory body of the accounting profession, played a crucial role in developing an action plan to address deficiencies. MIPA published “Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Guidelines” in early 2021 to help licensees better understand their AML/CFT obligations.
Awareness Strategy and Outreach Sessions
MIPA developed an awareness strategy and conducted outreach sessions with licensees to educate them on AML/CFT legal obligations, risk management, and compliance. The themes covered during these sessions included:
- National Risk Assessment
- Customer due diligence
- Enhanced due diligence
- Record keeping
- Training requirements
- Targeted financial sanctions
Supervisory Forum and Staff Training
MIPA established an AML/CFT supervisory forum with other relevant authorities to share best practices and lessons learned. This collaboration enabled supervisors to coordinate their efforts more effectively and address common challenges.
In addition, MIPA took steps to enhance its AML/CFT capabilities, including establishing an AML/CFT unit and providing ongoing training to its staff.
Onsite Inspections and Compliance Reporting
MIPA adopted a pragmatic approach to remediation, conducting onsite and offsite inspections to determine reporting entities’ level of compliance with AML/CFT obligations. Despite facing challenges, including resistance from licensees during onsite inspections, MIPA’s efforts ultimately paid off.
Success Story and Future Plans
The country successfully exited the FATF Grey list in 2021 and was rated compliant with 39 of 40 FATF recommendations in 2021. MIPA’s success story serves as a model for other countries looking to strengthen their AML/CFT regimes. The organization plans to conduct thematic reviews on areas where there are recurrent deficiencies and refine its supervisory approach to improve compliance with AML/CFT obligations.
This case study was presented at the October 2022 Professional Accountancy Organization Development & Advisory Group (PAODAG) meeting by Jasbine Heenaye.