Financial Crime World

FSC Warns Financial Institutions: Failure to Comply with AML/CFT Regulations May Result in Regulatory Action

Port Louis, Mauritius - The Financial Services Commission (FSC) has issued a stern warning to financial institutions in Mauritius

The FSC has warned that failure to comply with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regulations may result in regulatory action, including revocation of licenses. This warning is based on Section 32A of the Financial Intelligence and Assets Recovery Act (FIAMLA) and Regulation 33 of the FIAML Regulations 2018.

Failure to Comply with AML/CFT Regulations

  • Failure to comply with the minimum requirements of the AML/CFT regulations may be considered as engaging in conduct that is not in the best economic interests of Mauritius or damaging its reputation.
  • This can also indicate a lack of fitness and propriety, which can have serious consequences for financial institutions.

Importance of Effective AML/CFT Policies and Procedures

  • The FSC emphasizes the importance of effective AML/CFT policies and procedures in preventing money laundering and terrorist financing.
  • Financial institutions must establish an open and positive approach to compliance and AML/CFT issues among all employees, and senior management has a responsibility to ensure that systems and controls are appropriately designed and implemented.

Customer Due Diligence (CDD) and Monitoring Transactions

  • The FSC highlights the importance of adopting a robust approach to CDD and monitoring transactions for suspicious activity.
  • Financial institutions must be willing to ask non-customary questions and investigate unusual activity, and must not refrain from asking customers about their business relationships or transactions.

Hierarchical Approach

  • The commission warns that a hierarchical approach within a business can hinder an effective system of AML/CFT control, and financial institutions must recognize and address this issue.
  • Financial institutions must understand, follow, and enforce policies and procedures at all levels of the organization.

Guidance Based on FATF 40 Recommendations

  • The FSC’s guidance is based on the 2012 FATF 40 Recommendations, which are recognized as global standards for AML/CFT.
  • The commission urges financial institutions to take immediate action to ensure that they are compliant with the FIAMLA and FIAML Regulations 2018, and to adopt a robust approach to preventing money laundering and terrorist financing.

Conclusion

“We urge all financial institutions to take these guidelines seriously and to ensure that their systems and controls are designed to prevent money laundering and terrorist financing,” said a spokesperson for the FSC. “We will be conducting onsite visits to assess compliance with the AML/CFT regulations, and we will not hesitate to take regulatory action against any institution that fails to comply.”