Mauritius Takes Steps to Curb Unlicensed Virtual Asset Service Providers

In a move to strengthen its efforts against money laundering and terrorist financing, Mauritius has issued a communiqué alerting the public and virtual asset service providers (VASPs) that only licensed operators are allowed to provide such services.

Regulatory Measures

The Financial Services Commission (FSC), the country’s financial regulator, has cautioned VASPs to transact only with licensed operators and report any unlicensed individuals providing virtual asset services. The FSC has also required anyone currently carrying out VA-related activities to apply for a relevant license.

• The FSC is implementing a risk-based supervisory approach for financial institutions, which includes VASPs.
• The supervisor is empowered to obtain information from VASPs, search and inspect their premises, inspect records, give directions, and monitor compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) requirements.

Awareness Campaign

Mauritius is implementing a communication and awareness campaign to sensitize the general public and business community about the importance of dealing only with licensed service providers. This includes:

• A dedicated hotline has been set up to report cases of unlicensed VASPs and any other related complaints from the public.
• The country is establishing an Observatory that will continuously monitor the market, identify patterns and transactions, scan and track new entrants, and share information with relevant authorities.
• Mauritius is leveraging social media platforms to raise awareness about VAITOS Act through infographic dissemination.

Challenges and Sanctions

Despite these efforts, it remains unclear whether all unregistered VASPs can be captured. Only seven individuals have been suspected of undertaking business activities requiring a license under the VAITOS Act.

• The country’s legislative framework provides a range of proportionate and dissuasive sanctions for VASPs, their directors, and senior management that fail to comply with AML/CFT requirements.
• Mauritius’ international cooperation framework also applies to all designated entities, including VASPs.

Progress and Future Plans

Mauritius has made significant progress in addressing deficiencies in technical compliance, justifying a re-rating from Partially Compliant (PC) to Largely Compliant with Recommendation 15. The country will continue to inform the ESAAMLG of its progress in improving AML/CFT effectiveness measures.

Technical Compliance Ratings

Recommendations and Corresponding Ratings

Note: Four technical compliance ratings are available: Compliant (C), Largely Compliant (LC), Partially Compliant (PC), and Non-Compliant.