Financial Crime World

EU Labels Mauritius as High-Risk Jurisdiction for Money Laundering, Calls for Action

The European Commission has labeled Mauritius as a jurisdiction with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies, citing concerns about the island nation’s financial integrity. The classification is based on findings by the Financial Action Task Force (FATF), an international standard-setter in the field.

Deficiencies Identified

According to the EC, Mauritius has failed to demonstrate effective supervision of its:

  • Global Business Sector: Insufficient oversight and monitoring of global businesses operating in the country.
  • Designated Non-Financial Businesses and Professions: Inadequate regulation and supervision of non-financial businesses and professions that pose a high risk of money laundering and terrorist financing.
  • Adequate Access to Accurate Ownership Information: Failure to provide timely and accurate information on beneficial ownership.

Additionally, Mauritius has struggled to implement:

  • Risk-Based Approach for Supervising Non-Profit Organizations: Inadequate supervision of non-profit organizations that may be vulnerable to money laundering and terrorist financing.
  • Enforcing Targeted Financial Sanctions: Insufficient enforcement of targeted financial sanctions imposed by the international community.

Consequences for Mauritius’ Financial Services

The listing by the EU will have far-reaching consequences for Mauritius’ financial services and global business sectors, including:

  • Enhanced Due Diligence Measures: Operators in these sectors will face increased scrutiny when conducting transactions with the EU.
  • Stricter Regulations: Financial institutions in the region will need to apply stricter regulations to maintain compliance.

Call to Action

The EC has called on Mauritius to expedite its implementation of an action plan developed with the FATF to address outstanding deficiencies within proposed timeframes. While acknowledging that Mauritius has made a high-level political commitment to address these issues, the commission notes that full compliance with FATF recommendations remains elusive.

Unless Mauritius takes swift and effective action, the country risks being listed as a high-risk jurisdiction by the EU, which could have severe consequences for its financial sector. The EC is urging the island nation to take immediate steps to remedy its AML/CFT deficiencies and restore its financial reputation.