Financial Crime World

Mauritius Faces FATF Scrutiny: Assessing Compliance with Anti-Money Laundering and Counter-Terrorist Financing Measures

Mauritius, a beautiful island nation in the Indian Ocean known for its tourism and Financial Services sector, has recently come under close scrutiny from the Financial Action Task Force (FATF) following the release of the Mauritius Follow-Up Report 2022. The report evaluates Mauritius’ adherence to the FATF Recommendations, revealing various areas where improvements are needed.

FATF Evaluation of Mauritius

  1. Assessing Risk and Applying a Risk-Based Approach (R.1)

    • Mauritian authorities were rated as compliant.

  2. National Cooperation and Coordination (R.2)

    • Mauritius was deemed largely compliant.

  3. Money Laundering Offence (R.3)

    • The country was assessed as compliant, maintaining laws to criminalize money laundering for both predicate offenses.

  4. Confiscation and Provisional Measures (R.4)

    • Mauritius was rated as compliant in seizing and confiscating criminally obtained assets and implementing provisional measures.

  5. Terrorist Financing Offence (R.5)

    • The country was rated compliant.

  6. Targeted Financial Sanctions Related to Terrorism & Proliferation (R.6-7)

    • Mauritius was evaluated as compliant.

  7. Non-Profit Organizations (R.8)

    • The authorities were found to be largely compliant; however, there were calls for further improvements.

  8. Financial Institution Secrecy Laws (R.9)

    • Mauritius was compliant; however, further progress was suggested in terms of transparency and exchange of information with foreign counterparts.

  9. Customer Due Diligence (R.10)

    • Mauritius was rated compliant.

  10. Record Keeping (R.11)

    • The country was found largely compliant, but more effective supervisory measures were needed.

  11. Politically Exposed Persons (R.12)

    • Mauritius was rated compliant, but there was an observation regarding the implementation of a central regulatory body.

  12. Correspondent Banking (R.13)

    • The country was rated compliant, but the FATF stressed the need for strengthening supervision and increasing transparency in correspondent banking relationships.

  13. Other Measures (R.14)

    • Mauritius was evaluated as compliant.

  14. Transparency and Beneficial Ownership of Legal Persons (R.24)

    • The Mauritian government was found to be largely compliant in maintaining a central registry for companies and other legal entities.

  15. Transparency and Beneficial Ownership of Legal Arrangements (R.25)

    • The report indicated that Mauritius was largely compliant in maintaining a central registry for trusts and other legal arrangements.

Areas for Improvement

Despite the compliant status in most categories, Mauritius did face scrutiny in several areas where significant improvements were necessary according to the FATF:

  • Regulation and supervision of financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs, R.26-28).
  • Financial Intelligent Units (R.29).
  • Responsibilities and powers of law enforcement and investigative authorities (R.30-31).
  • Extradition (R.39).

In these areas, Mauritius was rated as requiring significant improvements. Failure to make progress could lead to potential FATF actions such as increased monitoring, mutual evaluations, or even sanctions. The Mauritian authorities have been given until November 2022 to submit a progress report to the FATF.