Financial Crime World

Mauritius’ Financial Crime Battle: From Grey List to New Commission

Amidst the crystal-clear waters and sunny shores of Mauritius, a hidden battle against financial crime is underway. This Indian Ocean island nation, known for its paradisiacal beauty, has seen international attention in recent years following its placement on the Financial Action Task Force (FATF) grey list in 2020. However, Mauritius has responded rapidly and effectively, showcasing significant progress towards addressing its vulnerabilities in money laundering and terrorist financing, as evidenced by its removal from the grey list in October 2021.

Financial Crime News is releasing a Mauritius Dashboard for December 2023, providing insights into:

  1. The nature of financial crime threats
  2. Mauritius’ main vulnerabilities
  3. The island nation’s response to these challenges

Mauritius’ Financial Risk Landscape

Mauritius, situated in the southern hemisphere’s Indian Ocean, has earned the nickname of an “island paradise.” Despite its reputation as a tourist hotspot, Mauritius’ financial crime risk score, according to Financial Crime News’ assessment, stands at 26/100, placing it in the “Low” threat category.

Threats & Vulnerabilities

The Mauritian Government’s National Money Laundering and Terrorist Financing Risk Assessment 2019 identified the following key threats and vulnerabilities:

  1. Significant internal and external threats related to:

    • Drug Trafficking
    • Fraud
    • Illegal Bookmaking
    • High Value Larcenies
    • Tax Crimes
    • Corruption

  2. External threats from tax fraud and corruption

  3. Transnational organized crime, particularly drug trafficking

Transnational Organized Crime and Drug Trafficking

Drug trafficking has been a pressing issue in Mauritius. According to the latest Organised Crime Index, Mauritius hosts a pervasive heroin market, with much of the substance being smuggled in from South Africa via Madagascar. Trafficking organizations use planes, fast boats, and commercial ships to distribute illegal drugs, despite police efforts to curb these activities. The failure to effectively address corruption within law enforcement agencies has been a persistent issue.

Sector Vulnerabilities

The following sectors were identified as having varying levels of risk:

  • Gambling
  • Real Estate
  • Jewelry
  • Trust and Company Service Providers
  • Securities and Legal Professions
  • Financial Institutions under FSC supervision
  • Other Financial Institutions under supervision of BoM
  • Insurance sector
  • Accountancy sectors
  • Payment Intermediaries Services
  • Distribution of Financial Products
  • Credit Finance
  • Leasing
  • Treasury Management

The highest vulnerability ratings were attributed to the Gambling, Real Estate, and Jewelry sectors.

Combatting Financial Crimes: Mauritius’ Response

The Mauritian government’s response to these threats has been multifaceted:

  1. Strengthening the Anti-Money Laundering and Counter-Terrorist Financing Framework: After being placed on the FATF grey list, Mauritius has taken significant steps to strengthen its AML/CTF framework. It now has just one “Partially Compliant” rating out of the FATF’s 40 recommendations and no non-compliant ratings.

  2. Establishment of a Financial Crime Commission: In a bid to bolster its efforts to combat financial crimes, the Mauritian government announced the establishment of a Financial Crime Commission in December 2023. This new entity will take over the functions and powers of the Independent Commission Against Corruption, the Asset Recovery Investigation Division of the Financial Intelligence Unit, and the Integrity Reporting Services Agency. The Commission will provide greater oversight and accountability in terms of case investigation and management.

  3. Reintroduction of the Operations Review Committee: To enhance the effectiveness of the Financial Crime Commission, the government is reintroducing the Operations Review Committee, a committee previously established under the Prevention of Corruption Act but later removed.

At Financial Crime News, we’re committed to staying informed about emerging trends and developments in financial crime and regulatory compliance. Our Mauritius Dashboard offers a comprehensive analysis of the financial crime risks, susceptibilities, and response in this beautiful island nation.