Mauritius Takes Steps to Comply with Anti-Money Laundering Regulations
A Country’s Progress in Implementing AML/CFT Regulations
Mauritius has made significant strides in implementing anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations following a Mutual Evaluation Report (MER) conducted by the Eastern and Southern Africa Anti-Money Laundering Group in 2018. The report identified key deficiencies in Mauritius’ technical compliance with international standards set by the Financial Action Task Force (FATF).
Response to the MER: Launch of the National Risk Assessment
In response to the MER, Mauritius launched its National Risk Assessment (NRA) system in 2019. This exercise revealed a medium-high risk of money laundering, prompting additional measures to address vulnerabilities and mitigate risks.
Enhanced Measures to Address Concerns
However, Mauritius was placed on the FATF Grey list for strategic deficiencies in effectiveness in January 2020, leading to enhanced monitoring and reporting requirements for financial institutions operating in the country. Investors also perceived higher risks associated with money laundering and terrorist financing.
Addressing Concerns: MIPA’s Action Plan
To address these concerns, the Mauritius Institute of Professional Accountants (MIPA) developed an action plan:
- Published “Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Guidelines” in early 2021 to help licensees understand their obligations
- Conducted outreach sessions with licensees to raise awareness of AML/CFT regulations and risk management
Enhancing AML/CFT Supervision
The institute established an AML/CFT supervisory forum, enabling supervisors to share best practices and lessons learned to ensure compliance with AML/CFT obligations. MIPA also enhanced its AML/CFT capabilities:
- Established an AML/CFT unit
- Provided ongoing training to staff
Collaboration and Guidance
The Bank of Mauritius and Financial Services Commission collaborated with MIPA to provide guidance and support for onsite inspections, adopting a risk-based approach to optimize resources. The institute applied proportionate, dissuasive, and effective remedial actions and sanctions to instances of non-compliance, improving the culture of compliance with AML/CFT obligations.
Success Story: Mauritius Exits FATF List
Despite challenges faced during the delisting phase, including resistance from licensees and logistical issues due to COVID-19, MIPA made significant progress in enhancing engagement with reporting entities and promoting a culture of compliance. As a result, Mauritius successfully exited the FATF list in 2021, becoming one of the first countries to do so before the deadline.
Upgrading Compliance Status
Mauritius was also rated compliant with 39 out of 40 FATF recommendations in 2021, with only Recommendation 15 on Virtual Assets and Virtual Assets Service Providers remaining outstanding. The country successfully upgraded from “Partially Compliant” to “Largely Compliant” in 2022.
Conclusion
Mauritius has demonstrated its commitment to implementing AML/CFT regulations by making significant progress in enhancing engagement with reporting entities, promoting a culture of compliance, and upgrading its compliance status. The country’s success story serves as an example for other nations striving to improve their anti-money laundering efforts.