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Financial Institutions in Mauritius Must Conduct Compliance Audits Amid FATF Greylisting

The Financial Services Commission (FSC) has recently published an updated handbook for financial institutions in Mauritius, emphasizing the importance of conducting independent Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) audits. This is a timely guidance amid Mauritius’ classification as a greylisted country by the Financial Action Task Force (FATF).

FSC Regulations

In line with FSC regulations, every financial institution in Mauritius must conduct an independent AML/CFT audit of its existing compliance framework to assess whether it meets the requirements of applicable laws, rules, and regulations.

Independent Audit Process

An independent AML/CFT audit is a special assessment conducted by an external professional auditor or firm using best practices. The process involves:

• Evaluating the company’s risk assessment and AML/CFT framework through file testing, transaction testing, and live application of policies and procedures.
• Identifying money laundering and terrorist financing risks faced by the organization.

Financial institutions can conduct independent audits either internally or externally. However, internal auditors must be independent and not involved in the development of risk assessments or establishment of AML/CFT frameworks. External auditors must demonstrate independence from the institution’s business and lack any conflict of interest.

Audit Methodology

The audit methodology typically involves:

• Reviewing an institution’s existing compliance program manual.
• Assessing the adequacy of its risk-assessment procedures.
• Evaluating the effectiveness of its AML/CFT program.

The frequency of the review depends on the institution’s size, nature, complexity, and internal risk assessment, with annual reviews recommended for most entities.

Audit Report

The independent audit report provides helpful recommendations to improve an institution’s AML/CFT program. Compliance audit reports must be issued in a timely manner to the Board of Directors, allowing them to take corrective actions.

Professional Services

HLB Risk & Compliance Consultancy Ltd offers dedicated services to help companies and designated non-financial business professionals conduct independent AML/CFT audits. The firm uses best practices and innovative methodologies to ensure quality, completeness, and reliability.

If you require a quote for an independent audit, please contact HLB Risk & Compliance Consultancy Ltd on legal@hlb-mauritius.com or +230 203 3900.