Financial Crime World

Financial Regulator Warns Institutions: Lack of Compliance Can Lead to Licence Revocation

Port Louis, Mauritius

The Financial Services Commission (FSC) has issued a stern warning to financial institutions in Mauritius, stating that failure to comply with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations can result in licence revocation.

Expectations for Financial Institutions

The FSC’s AML/CFT Handbook outlines the expectations for financial institutions, including:

  • Robust Compliance Systems: Establish a robust compliance system that includes a risk-based approach to prevent and detect money laundering and terrorist financing.
  • Employee Engagement: Ensure all employees understand the importance of AML/CFT compliance and have an open and positive approach to reporting suspicious activity.

Key Areas of Focus

The handbook highlights several key areas where financial institutions must demonstrate compliance, including:

  • Customer Due Diligence: Conduct thorough customer due diligence and identify true identities.
  • Monitoring Business Relationships and Transactions: Monitor business relationships and transactions for suspicious activity.
  • Resources Allocation: Ensure adequate resources are allocated to compliance officers.
  • Accurate Record Keeping: Maintain accurate records and report suspicious transactions.

AML/CFT Control

The FSC emphasizes the importance of a robust approach to AML/CFT control, warning against any reluctance or failure by financial institutions to ask customers non-customary questions in circumstances of unusual activity. The regulator notes that a hierarchical approach within a business can hinder effective systems of control, highlighting the need for employees at all levels to understand and follow policies and procedures.

FATF Recommendations

The FSC has also issued guidance on the Financial Action Task Force (FATF) Recommendations, which provide the global standards for AML/CFT. The regulator warns that failure to comply with these recommendations can result in regulatory action, including licence revocation.

Action Required

Financial institutions are advised to review their AML/CFT systems and controls immediately to ensure compliance with FSC requirements.